Board of Directors of the
Clean Power Alliance of Southern California
Regular Meeting
Thursday, July 10, 2025
2:00 p.m.
Visit CPA’s YouTube Channel to view a Live Stream of the Meeting www.youtube.com/@CPApublicmeetings
*There may be a streaming delay of up to 90 seconds. This is a view-only live stream.
Clean Power Alliance
Diana Mahmud Board Room
801 S. Grand Ave., Suite 400
Los Angeles, CA 90017
Members of the public may also participate in this meeting at the following locations:
Calabasas City Hall
Council Conference Room
100 Civic Center Way
Calabasas, CA 91301
Ventura County Government Center
Point Mugu 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
357 Van Ness Way, Suite 110
Torrance, CA 90501
Hyatt Regency Chicago
Gallery 4 Boardroom
West Tower, Skyway Level
151 East Wacker Drive
Chicago, IL 60601
City of Claremont
City Yard/Community Services Department
Conference Room
1616 Monte Vista Avenue
Claremont, CA 91711
Camarillo City Hall
Administrative Conference Room
601 Carmen Drive
Camarillo, CA 93010
La Cañada Flintridge City Hall
Rose Conference Room
One Civic Center Drive
La Cañada Flintridge, CA 91011
Moorpark City Hall
Executive Conference Room
323 Science Dr.
Moorpark, CA 93021
Hermosa Beach City Hall
Conference Room, 2nd Floor
1315 Valley Drive
Hermosa Beach, CA 90254
Beverly Hills City Hall
Conference Room, 4th Floor
455 N. Rexford Drive
Beverly Hills, CA 90210
Carson City Hall
Executive Conference Room
701 E. Carson St.
Carson, CA 90745
Courtyard Roseville Galleria Mall
Creekside Boardroom
301 Creekside Ridge Court
Roseville, CA 95678
Alhambra City Hall
Conference Room A
111 S. First St.
Alhambra, CA 91801
Agenda Page 1
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 Board 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 Board at CPA’s Office are requested to complete a comment card and provide it to staff. If you 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 AND PLEDGE OF ALLEGIANCE
ROLL CALL
GENERAL PUBLIC COMMENT
CONSENT AGENDA
1. Approve Minutes from the June 5, 2025, Board of Directors Meeting
2. Adopt Resolution No. 25-07-090 Approving the Load Management Standard Revised Compliance Plan Wherein CPA Proposes to Participate in Southern California Edison’s Expanded Dynamic Rate Pilot to Meet the California Energy Commission’s Load Management Standards Regulatory Requirements
3. Adopt Resolution No. 25-07-091 to Approve Proposed Energy Risk Management Policy Amendments
Agenda Page 2
4. Approve and Authorize the Chief Executive Officer to Execute a Professional Services Agreement with Tenaska Power Services for Scheduling Coordinator Services, Congestion Revenue Right Services, Credit Risk Management, Risk Management, Load Forecasting, and Energy Storage Optimization Services for a Three-Year Initial Term with Two Optional Successive One-Year Terms for a Total Not to Exceed Amount of $7.55 Million for the Total 5 Year Term
5. Approve and Authorize the Chief Executive Officer to Execute Amendment No. 2 to Increase the Contract Value of the Professional Services Agreement with Pastilla, Inc. by $833,608 for a total Not to Exceed Amount of $1.85 Million in FY 2025/26 for Creative Services, Web Development, and Web Maintenance
6. Approve and Authorize the Chief Executive Officer to Execute Amendment No. 3 to the Professional Services Agreement with Bloom Ads Global Media Group to Increase the Contract Value by $596,327 for a total Not to Exceed Amount of $2,655,327 in FY 2025/26 for Media Buying and Related Services
7. Approve Amendment to the Renewable Power Purchase Agreement with ESCA-PLD-SOUTHBAY2, LLC (“Prologis”) for the South Bay 6 Local Rooftop Solar Project and Authorize the Chief Executive Officer to Execute the Amendment Resulting in a Payment to CPA in the Amount of $227,700 and an Extension of the Commercial Online Date to May 30, 2026
8. Receive and File July 2025 Bill Positions Report
9. Receive and File Monthly Community Advisory Committee Report
COMMITTEE CHAIR UPDATES
Director Cedric Hicks, Chair, Legislative & Regulatory Committee Director Susan Santangelo, Chair, Finance Committee
Director Robert Parkhurst, Chair, Energy Planning & Resources Committee
MANAGEMENT REPORT
BOARD MEMBER COMMENTS
REPORT FROM THE CHAIR
ADJOURN – NO MEETING IN AUGUST 2025. NEXT REGULAR MEETING SEPTEMBER 4, 2025
Public Records: Public records that relate to any item on the open session agenda for a regular Board 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 Board. 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 3
Commonly Used Acronyms
BESS Battery Energy Storage System
CAC Community Advisory Committee
CAISO California Independent System Operator
CALCCA California Community Choice Association
CalEVIP California Electric Vehicle Incentive Program
CARB California Air Resources Board
CARE California Alternate Rates for Energy (Low Income Discount Rate) CCA Community Choice Aggregation
CEC California Energy Commission
CPUC California Public Utilities Commission
DA Direct Access (Private Retail Energy Supplier)
DAC Disadvantaged Community (As Defined by Calenviroscreen 3.0) DER Distributed Energy Resources
DR Demand Response
ERMP Energy Risk Management Policy
ERRA Energy Resource Recovery Account (SCE Generation Rate Setting)
ESA Energy Storage Agreement
EVSE Electric Vehicle Supply Equipment (EV Charger)
FERA Family Electric Rate Assistance (Low Income Discount Rate) GHG Greenhouse Gas
IOU Investor Owned Utility
IRP Integrated Resource Plan
JPA Joint Powers Authority
Agenda Page 4
Commonly Used Acronyms
Kwh Kilowatt-Hour (A Measure of Energy Used in A One-Hour Period) Kw Kilowatt = 1,000 Watts (Watt = A Measure of Instantaneous Power) LSE Load Serving Entity
MB Medical Baseline (Discount Rate for Medical Equipment Needs) MW Megawatt = 1,000 Kilowatts
Mwh Megawatt-Hour = 1,000 Kilowatt-Hours
NEM Net Energy Metering (Usually for Customers with Solar) OAT Other Applicable Tariffs
PCIA Power Charge Indifference Adjustment (Can Be Called “Exit Fee”) PCC1 Renewable Energy Generated Inside California
PCC2 Renewable Energy Generated Outside California
PCC3 A REC from A Renewable Resource, Delivered Without Energy PCL Power Content Label
POU Publicly Owned or Municipal Utility
PPA Power Purchase Agreement
PSPS Public Safety Power Shutoff
PV Photovoltaic (Solar) Panels
RA Resource Adequacy
REC Renewable Energy Credit
RPS Renewables Portfolio Standard
T&D Transmission and Distribution
TOU Time Of Use (Used to Refer to Rates that Differ by Time Of Day) WECC Western Electricity Coordinating Council
Agenda Page 5
Staff Report – Agenda Item 1
To: Board of Directors
Subject: Approve Minutes from the June 5, 2025 Board of Directors Meeting Date: July 10, 2025
RECOMMENDATION
Approve.
ATTACHMENT
1. Minutes
Agenda Page 6
Board of Directors Item 1
MINUTES
Board of Directors of the
Clean Power Alliance of Southern California
Regular Meeting
Thursday, June 5, 2025, 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
City of Claremont
Community Services Department
Conference Room
1616 Monte Vista Avenue
Claremont, CA 91711
CALL TO ORDER & ROLL CALL
Chair Klein Lopez called the meeting to order at 2:02pm and Gabriela Monzon, Clerk of the Board, conducted roll call.
PLEDGE OF ALLEGIANCE
Director Cheng led the Pledge of Allegiance.
Roll Call
1 Agoura Hills Deborah Klein Lopez Chair Present
2 Alhambra Jeff Maloney Director Present
3 Arcadia Paul Cheng Director Present
4 Beverly Hills Absent
5 Calabasas Ed Albrecht Director Remote
6 Camarillo Susan Santangelo Director Remote
7 Carson Cedric Hicks Director Remote
8 Claremont Corey Calaycay Director Remote
Agenda Page 7
Board of Directors Item 1
9 Culver City Yasmine-Imani McMorrin Director Present
10 Downey Horacio Ortiz Director Remote
11 Hawaiian Gardens Ramie L. Torres Alternate Remote
12 Hawthorne Absent
13 Hermosa Beach Doug Krauss Alternate Remote
14 La Cañada Flintridge Stephanie Fossan Director Present 15 Los Angeles County Lindsay Horvath Vice Chair Present 16 Lynwood Juan Muñoz-Guevara Director Present
17 Malibu Marianne Riggins Director Remote
18 Manhattan Beach David Lesser Director Remote
19 Monrovia Edward Belden Director Present
20 Moorpark Chris Barrett Director Remote
21 Ojai Michelle Ellison Alternate Remote
22 Oxnard Bert Perello Director Remote
23 Paramount Michelle Muller Alternate Remote
24 Port Hueneme Laura Hernandez Director Present
25 Redondo Beach Brad Waller Director Present
26 Rolling Hills Estates Debby Stegura Director Remote
27 Santa Monica Caroline Torosis Director Present
28 Santa Paula Jenny Crosswhite Director Present
29 Sierra Madre Robert Parkhurst Director Present
30 Simi Valley Rocky Rhodes Director Present
31 South Pasadena Omari Ferguson Director Present
32 Temple City Ed Chen Director Present
33 Thousand Oaks David Newman Director Present
34 City of Ventura Alex Mangone Director Remote
35 Ventura County Vianey Lopez Vice Chair Present
36 West Hollywood Chelsea Byers Alternate Present
37 Westlake Village Kristopher Galvez Alternate Remote
Agenda Page 8
Board of Directors Item 1
38 Whittier Leon Vasquez Alternate Remote
All votes are unanimous unless otherwise stated.
GENERAL PUBLIC COMMENT
There was no public comment.
CONSENT AGENDA
1. Approve Minutes from the May 1, 2025, Board of Directors Meeting
2. Approve and Authorize the Chief Executive Officer to Execute the Professional Services Agreement with ICF Consulting, LLC to Provide Technical Services to Support the Community Electric Vehicle Charging Pathway in the Energized Communities Program for a Three-Year Initial Term with Two Optional Successive One Year Terms, with a Total Not-To-Exceed Amount of $1,200,560
3. Approve and Authorize the Chief Executive Officer to Execute Amendment No. 2 to the Amended and Restated Agreement with Calpine Energy Services Extending the Term to July 31, 2027, with an Option to Extend for an Additional 12-Months until July 31, 2028 Upon Mutual Agreement
4. Appoint Four New Members to the Community Advisory Committee for San Gabriel Valley, Unincorporated Los Angeles County, and the Gateway Cities Regions for the Remainder of the Current Term Ending in April 2026
5. Receive and File CY Q1 Risk Management Team Report
6. Receive and File FY 2024/2025 Q3 Financial Report
7. Receive and File CY Q2 Communications Report
8. Receive and File CY Q2 Member Agency Programs Report
9. Receive and File June 2025 Bill Positions Report
10. Receive and File Monthly Community Advisory Committee Report Motion: Vice Chair Horvath, Los Angeles County
Second: Director Byers, West Hollywood
Vote: The consent agenda was approved by roll call vote
REGULAR AGENDA
11. Adopt Resolution 25-06-084 to Approve New Rates for Phase 1 & 2 Non-Residential Customers, Resolution No. 25-06-085 to Approve New Rates for Phase 3 & 5 Residential Customers, Resolution No. 25-06-086 to Approve New Rates for Phase 4 & 5 Non-Residential Customers, Resolution No. 25-06-087 to Approve New Rates for All Phase 6 Customers, Resolution No. 25-06-088 to Approve New Rates for All Phase 7 Customers, and Resolution No. 25-06-089 to Approve an Amended Peak Management Pricing Tariff
Ted Bardacke, Chief Executive Officer, presented the item. The rates implement the FY 2025/26 rate approach adopted by the Board at its May 2025 meeting. New rates extend and amplify the interim rate reduction that was implemented in March 2025. Potential regulatory changes at the end of the year may require an interim rate adjustment in early 2026.
Vice Chair Horvath expressed support for the proposed rates, stating the approach will create stability for CPA’s financial position and earn the trust of customers with reasonable rates. Chair Klein Lopez thanked staff for working on the rate process and stated her satisfaction that CPA is addressing affordability in electricity rates.
Agenda Page 9
Board of Directors Item 1
Motion: Director Parkhurst, Sierra Madre
Second: Director Byers, West Hollywood
Vote: Item 11 was approved by a roll call vote.
12. Approve the Proposed Fiscal Year 2025/26 Budget as Recommended by the Finance Committee
David McNeil, Chief Financial Officer, presented the item. Mr. McNeil discussed energy costs and operating expenses, including increases in staffing, communications, and customer programs. The budgeted increase in net position will bring CPA’s reserves to 50% by June 30, 2026, and that Days Liquidity On Hand (DLOH) will increase to 189 days. There will be a 17% decrease in net electricity revenue due to factors such as lower rates and customer accounts in arrears. CPA’s financial metrics compare favorably with other CCAs and are consistent with its A- credit rating.
Director Newman acknowledged CPA’s strong financial position, which allowed lowering of electricity prices for customers and the resulting 17% drop in revenue.
Staff clarified for Director Belden that lower revenue will be the result of lower rates, not reduced demand, and that the loss of customers due to the January 2025 wildfires did not greatly impact CPA’s load. Director Crosswhite inquired about DLOH, and staff responded that it’s a calculation of cash and available lines of credit related to expenses, and that it informs credit ratings.
Director Lesser asked about budget impacts related to the federal roll back of the Inflation Reduction Act; staff said there is little impact in the short-term, but long-term, natural gas prices may go up because of a decrease in renewables production, and that would increase overall energy market prices. Also, the tax bill moving through the House and Senate may have negative impacts on energy production overall. Director Santangelo, Chair of the Finance Committee, thanked staff for their work on the budget and stated that the committee approved the draft budget unanimously. Vice Chair Horvath expressed appreciation for CPA’s staff retention efforts and the increase in funding for marketing and communications, which will benefit customers.
Motion: Director Hicks, Carson
Second: Director Muñoz-Guevara, Lynwood
Vote: Item 12 was approved by a roll call vote.
COMMITTEE CHAIR UPDATES
Director Santangelo, Finance Committee, reported that the committee approved Baker Tilly as the auditor for the current year’s budget; the firm has experience with auditing electricity utilities and CCAs.
Director Parkhurst, Energy Committee, reported that the committee reviewed active RFOs.
MANAGEMENT REPORT
Mr. Bardacke discussed the upcoming Board retreat and noted that meeting stipends will be implemented in the new fiscal year. The cities of Cudahy and Fillmore have voted to
Agenda Page 10
Board of Directors Item 1
engage in feasibility studies to join CPA. CPA received a high score in its privacy and IT security audit.
Regarding federal regulations, tax-exempt government debt is intact in the latest round of proposed laws. However, there are CPA battery projects that may be negatively impacted by changes to the Investment Tax Credit. Abrupt removal of tax credits could raise energy prices immediately. Mr. Bardacke described the Foreign Entities of Concern or FEOC policy, which threatens project tax credits.
Staff clarified for the Board that FEOC, if implemented, would impact projects that rely on renewable energy tax credits, and may potentially impact other kinds of energy production.
For renewables, projects could still go forward but they would cost more without tax credits. Director Belden asked about quantifying the increase in costs, and staff responded that each project is unique and cost increases would be difficult to estimate. The bills may still be changed to favor CPA and renewable energy production in general. Lawmakers may also be influenced by the potential loss of jobs across the country.
BOARD MEMBER COMMENTS
Director Byers thanked CPA staff for participating in the West Hollywood Pride event to promote community engagement in clean energy programs.
REPORT FROM THE CHAIR
Chair Klein Lopez encouraged Board members to participate in the upcoming Board retreat.
ADJOURN
Chair Klein Lopez adjourned the meeting at 3:17 p.m.
Agenda Page 11
Staff Report – Agenda Item 2
To: Board of Directors
From: CC Song, Senior Director, Regulatory Affairs
Reviewed By: Matthew Langer, Chief Operating Officer
Approved By: Ted Bardacke, Chief Executive Officer
Subject: Adopt Resolution No. 25-07-090 Approving the Load Management Standard Compliance Plan
Date: July 10, 2025
RECOMMENDATION
Adopt Resolution 25-07-090 Approving the Load Management Standard (“LMS”) Revised Compliance Plan (”Revised Plan”) wherein CPA proposes to participate in Southern California Edison Company’s (”SCE”) Expanded Dynamic Rate Pilot (”SCE Pilot”) to meet the California Energy Commission’s Load Management Standards (LMS) regulatory requirements.
BACKGROUND
In 1979, the CEC established LMS to increase electricity demand flexibility by requiring the creation of residential load control programs, marginal cost pricing, and large commercial and industrial time-of-use rates. As a result, California customers in all sectors have been encouraged to provide basic load shedding for decades.1 In 2023, the CEC revised its LMS regulations with the intention to increase the adoption of marginal cost-based electricity rates to reduce or shift electricity consumption to align 1 Draft Load Management Standards Rulemaking Scoping Memo, January 10, 2022, p. 3, https://efiling.energy.ca.gov/GetDocument.aspx?tn=231432 Agenda Page 12
Board of Directors Item 2
with grid reliability and carbon emission market signals. Marginal cost-based rates are rates that automatically vary on a daily and/or hourly-basis to reflect the actual cost of energy in the California Independent System Operator (“CAISO”) market. The revised LMS regulations require large community choice aggregators (“CCAs”) like CPA to have submitted an LMS Compliance Plan by April 1, 2024. In March 2024, CPA’s Board approved the initial LMS Compliance Plan, which was submitted to the CEC on March 15, 2024.
The revised LMS regulations also require CPA to submit for approval to its rate-approving body (CPA’s Board of Directors) at least one marginal cost-based rate for one customer class by July 2025 (“July 2025 LMS compliance requirement”). After discussions with the CEC staff, CPA and CEC staff agree that the most viable path to satisfying this requirement is allowing CPA’s customers to participate in the SCE Pilot, which is described in more detail below. Pursuant to the direction provided by CEC staff, the Revised Plan contains revisions to the approved LMS Compliance Plan to reflect CPA’s participation in the SCE Pilot.
If approved by the Board, CPA will submit the Revised Plan to the CEC. Assuming CEC approves of CPA's updated LMS Compliance Plan, the Board will be requested to take further action in the fall to enable CPA customers to enroll in the SCE Pilot.
DISCUSSION
The SCE Pilot provides participating customers with a dynamic rate that changes every hour of every day based on CAISO market prices. The SCE Pilot was approved by the CPUC on January 26, 2024. The pilot program duration is from July 2025 through December 2027, although the program start date has been delayed due to implementation issues. CPA customers are expected to begin to be allowed to enroll in in November 2025; enrollment will be voluntary and open to customers on time-of-use rates. Enrolled CPA customers will remain on their Otherwise Applicable Tariffs (“OATs”) (e.g. their current rates) while participating in the SCE Pilot. The SCE Pilot will give enrolled customers access to a monthly “shadow bill” from SCE that calculates what Agenda Page 13
Board of Directors Item 2
their delivery and generation charges would have been if they were on SCE’s dynamic program rates.
Customers participating in the program will receive dynamic rate information through an online portal and can adjust their energy usage manually or through the use of automated technologies. Customers continue to receive and pay their regular monthly OAT bills and will have access to their monthly dynamic rate shadow bills through the same online portal.
After every 12 months of enrollment in the SCE Pilot, and at the conclusion of the SCE Pilot, if a customer’s shadow bill is lower than their OAT bill, the customer will receive a bill credit for the difference between the two bills. If a customer’s shadow bill is higher than their OAT bill, the customers would not be charged the difference, meaning customers can only benefit through program participation and there is no risk of higher electricity bills. For CPA customers, any generation credits earned would be applied to their OAT bill by CPA, while any delivery credits would be applied by SCE. Customers can disenroll from the program at any time without penalty.
CPA plans to cap enrollment for its customers at 7.5 MW, which is 15% of SCE’s approved program capacity of 50 MW, based on CPA’s load share in SCE’s service territory. CPA will coordinate with SCE on customer messaging and will rely on aggregation service providers (ASPs) that SCE has contracted with to market the program to CPA customers. Per CPUC rules, CPA will receive a $20/kW-year incentive payment for load enrolled in the program. This equates to $150,000 per year if CPA’s portion of the program is fully enrolled; this amount which would be used to offset any bill credits provided by CPA to customers through the pilot.
Beyond satisfying the July 2025 LMS compliance requirement, CPA also plans on utilizing the pilot participation to obtain data that may aid in determining whether implementing its own marginal cost-based rates in 2027 to meet LMS program requirements would be cost-effective, technologically feasible, and/or beneficial to Agenda Page 14
Board of Directors Item 2
CPA’s customers. Any future implementation of marginal cost-based rates will depend on technology, costs, anticipated customer adoption, data availability, and whether the results of participating in the SCE Pilot reflect beneficial energy-shifting behavioral responses.
FISCAL IMPACT
Costs related to the SCE Pilot will likely be offset by the $20/kW-month incentive payment paid by the CPUC. Additionally, incentive payments to enrolled customers are likely to be offset by lower costs of procurement when customers reduce usage during the most expensive hours of the day. Although the exact costs of participating in the SCE Pilot are difficult to estimate, staff expect the impact, if any, to the FY 2025-2026 budget to be de minimis.
ATTACHMENTS
1. Resolution 25-07-090, Adopting and Approving the Load Management Standard Compliance Plan
2. Draft of CPA’s Revised LMS Compliance Plan
Agenda Page 15
RESO NO. 25-07-090
RESOLUTION NO. 25-07-090
RESOLUTION OF THE BOARD OF DIRECTORS OF CLEAN
POWER ALLIANCE OF SOUTHERN CALIFORNIA
ADOPTING AND APPROVING THE REVISED LOAD
MANAGEMENT STANDARDS COMPLIANCE PLAN
THE BOARD OF DIRECTORS OF CLEAN POWER ALLIANCE OF SOUTHERN CALIFORNIA HEREBY RESOLVES AS FOLLOWS:
WHEREAS, Clean Power Alliance of Southern California (formerly known as Los Angeles Community Choice Energy Authority) (“Clean Power Alliance” or “CPA”) was formed on June 27, 2017;
WHEREAS, Section 25403.5 of the California Public Resources Code authorizes the California Energy Commission (“CEC”) to adopt rules and regulations relating to electrical load management in each utility service area; WHEREAS, the CEC first adopted load management standards (“LMS”) regulations in 1979 and amended its LMS regulations in January 2023 to require large community choice aggregators (“CCA”) that provide more than 700 GWh of electricity to customers in a calendar year to submit an LMS compliance plan (“Plan”) beginning on April 1, 2024;
WHEREAS, LMS regulations required a CCA’s LMS Plan to specify how the CCA will encourage the use of electrical energy at off-peak hours, control daily and seasonal peak loads to improve electric system efficiency and reliability, lessen or delay the need for new electrical capacity, reduce fossil fuel consumption and greenhouse gas emissions, and explain how the CCA will use marginal cost-based rates to achieve such objectives;
WHEREAS, LMS regulations authorized a CCA Plan to propose, in the alternative, programs that enable automated response to marginal cost signal(s), referred to as load flexibility programs, for each customer class and evaluates the proposed load flexibility programs, based on their cost-effectiveness, equity, technological feasibility, benefits to the grid, and benefits to customers;
WHEREAS, on March 7, 2024 CPA’s Board of Directors approved Resolution No. 24-03-062, approving submission of CPA’s Load Management Standards Plan (“Initial Plan”) to the CEC’s Executive Director for their approval, which was submitted to the CEC on March 15, 2024;
WHEREAS, in March of 2025, CEC Staff began discussions with CPA regarding CPA’s Initial Plan and provided CPA with guidance in developing a Revised Load Management Standards Compliance Plan (“Revised Plan”) that would better meet CEC’s interpretation of the LMS requirements and advised that participating in Southern California Edison Company’s (“SCE’s”) Expanded Dynamic Rate Pilot (“SCE Pilot”) would satisfy the LMS requirements;
Agenda Page 16
RESO NO. 25-07-090
WHEREAS, the Revised Plan proposes to meet the CEC’s LMS requirements by participating in the SCE Pilot because it is a program that will enable automated response to marginal cost signals;
WHEREAS, CPA’s participation in the SCE Pilot will allow CPA’s staff to gather quantitative data to support evaluation of the cost-effectiveness, benefits to customers, and technological feasibility of offering marginal cost-based rates to each customer class after the SCE Pilot’s conclusion;
WHEREAS, the LMS requirements further require large CCAs such as CPA to apply to its Board for approval of at least one marginal cost-based rate, a requirement which CPA can satisfy by obtaining its Board’s approval of CPA participation in the SCE Pilot; and
WHEREAS, the LMS regulations require the CPA Board of Directors to approve the Revised Plan prior to submission of the Revised Plan to the CEC;
NOW, THEREFORE, BE IT DETERMINED, AFFIRMED, AND ORDERED BY
THE BOARD OF DIRECTORS OF THE CLEAN POWER ALLIANCE OF SOUTHERN CALIFORNIA that the attached Revised Plan, presented as Exhibit A, wherein CPA proposes to participate in the SCE Pilot is hereby approved as of July 10, 2025; ADOPTED AND APPROVED this 10th day of July 2025.
____________________________
Deborah Klein Lopez, Chair
ATTEST:
_________________________
Gabriela Monzon, Secretary
Agenda Page 17
RESO NO. 25-07-090
EXHIBIT A
CPA REVISED LOAD MANAGEMENT STANDARDS COMPLIANCE PLAN
(see attached)
Agenda Page 18
801 S. Grand Ave., Suite 400, Los Angeles, CA 90017
cleanpoweralliance.org
Clean Power Alliance of Southern California’s Revised Load Management Standards Compliance Plan as Ordered by §1623.1(a)(1)
Chapter 1: Introduction
1) Executive Summary
The California Energy Commission’s (“CEC”) 2022 Revised Load Management Standards (“LMS”)1 amended its electric load management standards to encourage the use of electrical energy during off-peak hours.2 The amendments, which became effective on April 1, 2023, updated the procedures for the submittal of plans for approval, requests for exemptions from the requirements or delays of compliance with the requirements, and requests for modifications of approved plans.
To accomplish the goals of the LMS, the regulations require California’s large investor own utilities (“IOUs”), large publicly owned utilities (“POUs”), and large community choice aggregators (“CCA”) that provide more than 700 GWh of electricity to customers in any calendar year (“Large CCA(s)”), to either:
(1) develop and propose marginal cost-based rates that change at least hourly3; Or, (2) If an entity determines not to propose new rates because in its evaluation it has found that (a) implementing new rates would not materially reduce peak load, or (b) if the implementation is not technologically feasible or cost-effective, the entity must offer cost-effective load flexibility programs.4 If a Large CCA offers cost-effective load-flexibility programs, such programs should provide at least one option for automating response to the CEC’s Market Informed Demand Automation Server (“MIDAS”) signals for each customer class that the entity’s rate-approving body determines such a program will materially reduce peak load.
Clean Power Alliance of Southern California (“CPA”) is a Large CCA and a load-serving entity (“LSE”) that provides more than 700 GWh of electricity to customers in any calendar year to 33 cities and the counties in Los Angeles and Ventura Counties, representing roughly one million customers. CPA’s initial LMS compliance plan (“Initial CPA Plan”) was approved by its Board of Directors (“Board”) on March 7, 2024. The Initial CPA Plan was then submitted to the CEC’s Executive Director via email and filed in LMS docket 23-LMS-01 on March 15, 2024.
1 California Energy Commission, Title 20, California Code of Regulations, Adopts Section 1623.1, Amends Section 1621 and 1623
2 Title 20, Division 2, Chapter 4, Article 5 of the California Code of Regulations §1621, et seq. (“LMS Regulations”). All section references are to the LMS Regulations unless otherwise specified. 3 Section 1623.1 (b)(2) and Section 1623.1 (b)(4)
4 Section 1623.1(a)(1).(A)-(B)
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2 This CPA Revised Plan (“Revised Plan”) proposes to meet the requirements of the LMS Regulations by participating in the Southern California Edison Company (“SCE”) Expanded Dynamic Rate Pilot (“SCE Pilot”)9 until December 31, 2027, as explained further in Chapter 3, Section 5 to this Revised Plan. CPA’s Board approved this Revised Plan on July 10, 2025 at a duly noticed meeting. CPA submits this Revised Plan to the LMS docket for approval. CPA will also submit a Tier 1 Advice Letter to the California Public Utilities Commission (“CPUC”) to inform the CPUC of CPA’s participation in the SCE Pilot. SCE and CPA currently estimate that SCE can begin enrollment of CCA customers in the SCE Pilot is November 2025.10 All customer classes are eligible to participate in the SCE Pilot. CPA will cap enrollment of CPA customers in the SCE Pilot at 15% of SCE’s 50 megawatt (“MW”) enrollment target (7.5 MWs), in proportion to CPA’s load share ratio within SCE territory. The SCE Pilot dynamic rate is a marginal cost-based rate. At this time, CPA does not have sufficient data to conclude that implementing marginal cost-based rates would be cost-effective, technologically feasible, and/or beneficial to CPA’s customers. Any future implementation of marginal cost-based rates will depend on technology, costs, anticipated customer adoption, data availability, and other factors, including results from CPA’s participation in the SCE Pilot. CPA will continue to engage in good faith efforts to meet the LMS program goals.
2) Introduction
a) CPA Joint Power Authority and Community Choice Aggregation Introduction CPA is a CCA and an LSE that provides more than 700 GWh of electricity service in any calendar year to 35 cities and counties in Los Angeles and Ventura Counties, representing roughly three million residents and businesses.11 CPA was established in 2017 by Los Angeles County, and the cities of Rolling Hills Estates and South Pasadena as a California Joint Powers Authority and the administrator of a CCA program. CPA’s Board members are locally-elected officials who represent and serve CPA’s communities.
CPA purchases electricity (or generation services) for its customers while working in partnership with Southern California Edison (“SCE”), who continues to deliver power and maintain the grid. Since CPA provides the generation services, CPA is only responsible for determining the generation component of the marginal cost-based rate based on evaluation factors prescribed in the 2022 Revised LMS.
Therefore, this Revised Plan only evaluates the generation component of the marginal cost-based rate. b) LMS Summary and Regulations that Large CCAs Must Comply With Load management is defined as “any utility program or activity that is intended to reshape deliberately a utility’s load duration curve.”12 The LMS is intended to support the goals of slowing down rising electricity costs and aiding grid reliability by improving time-of-use efficiency of electricity consumption through increased demand flexibility of the energy system. 9 D.24-01-032, Decision to Expand System Reliability Pilots of Pacific Gas and Electric Company and Southern California Edison Company at p.40
10 Given current implementation delays in the SCE Pilot, pumping and agriculture customers may not be able to enroll in the SCE Pilot until December of 2025.
11 AB 117 (2002) enabled the establishment of CCAs.
12 Public Resources Code (“PRC”) Section 25132
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3 The LMS requires IOUs, POUs, and large CCAs in California to give all customers access to rates and/or programs that provide information needed to optimize customer energy use. Specifically, the amendments require CCAs to develop marginal cost-based rates or public programs structured according to the requirements below:
” . . . The plan shall include consideration of programs and rate structures as specified in Section 1623.1 (b)-(d).
(A) The plan must evaluate cost effectiveness, equity, technological feasibility, benefits to the grid, and benefits to customers of marginal cost-based rates for each customer class.
(B) If after consideration of the factors in Subsection 1623.1(a)(1)(A) the plan does not propose development of marginal cost-based rates, the plan shall propose programs that enable automated response to marginal cost signal(s) for each customer class and evaluate them based on their cost-effectiveness, equity, technological feasibility, benefits to the grid, and benefits to customers.17 (Emphasis added.)
As stated in Chapter 1, Section 2(a) of this document, CPA is only responsible for evaluating the marginal cost-based rate’s generation component. This Revised Plan complies with the requirement provided in California Code of Regulations (“CCR”) Sections 1623.1(a)(1), as explained in Chapter 3, Section 5. c) CPA Plan Administration
i) Board Approval Process
Section 1623.1(a)(1) states that within one year of April 1, 2023, each Large CCA shall submit a compliance plan that describes how the CCA will meet the goals of encouraging the use of electricity during off-peak hours, encouraging the control of daily and seasonal peak loads to improve electric system efficiency and reliability, lessening or delaying the need for new electrical capacity, and reducing fossil fuel consumption and greenhouse gas emissions. The plan must be submitted to the CCAs rate-approving body in a duly noticed meeting and submitted to the CEC within 30 days after adoption of a plan.18 This Revised Plan documents how CPA will meet the goals of the LMS and provides a description of how CPA will comply with each of the CEC regulation elements provided in the subsequent sections.
The Initial CPA Plan was approved by CPA’s Board at a duly noticed meeting on March 7, 2024. This Revised Plan was presented to CPA’s Board and approved at a duly noticed meeting on July 10, 2025. ii) Submission of Plan to the CEC
As required in Section 1623.1(a)(1), CCAs are required to submit a compliance plan that is consistent with Section 1623.1 to its rate-approving body for adoption. The Initial Plan was reviewed and approved by its Board (CPA’s rate-approving body) on March 7, 2024, and submitted on March 15, 2024, to the CEC.
17 Section 1623.1(a)(1).
18 Section 1623.1(a)(3)(A).
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4 In March of 2025, CEC Staff began discussions with CPA regarding its submitted Initial CPA Plan and subsequently provided CPA with assistance in developing this Revised Plan to meet the approval of the CEC’s Executive Director.
This Revised Plan documents how CPA will meet the goals of the LMS and provides a description of how CPA will comply with each of the CEC regulation elements provided in the subsequent sections.
This Revised Plan was presented to CPA’s Board and approved at a duly noticed meeting on July 10, 2025. CPA submits this Revised Plan to the CEC’s LMS docket. iii) Triennial Plan Review
Section 1623.1(a)(1)(C) requires each Large CCA to review its compliance plan at least once every three years. As mentioned previously, CPA submitted its Initial CPA Plan to the CEC on March 15, 2024.
This Revised Plan was submitted to CPA’s Board and approved at a duly noticed meeting on July 10, 2025. CPA submits this Revised Plan to the CEC’s LMS docket. This Revised Plan will be reviewed by CPA at least once every three years following the date of adoption. Any material Plan change or update to the Revised Plan will also be submitted to CPA’s Board for approval and will be subsequently submitted to the CEC.
iv) Annual Reporting
Section 1623.1(a)(1)(C) requires each CCA to submit to the Executive Director of the CEC annual reports demonstrating their implementation of plans. The reports shall be submitted one year after plans are adopted by the CEC and annually thereafter. CPA will submit annual reports beginning one year after this Revised Plan is adopted by the CEC and annually thereafter describing the implementation of this Plan.
Chapter 2: Price Signals Via MIDAS
1) Publication of Machine-Readable Rates in MIDAS Overview21 MIDAS was developed by the CEC to provide access to utilities’ time-varying rates, greenhouse gas emission signals, and California Independent System Operator (“California ISO”) FlexAlerts. MIDAS is the principal tool supporting the implementation of LMS. Section 1623.1(c), as modified by Order NO:
23-0531-10.22 Section 1623.1(c) require Large CCAs to populate their time-dependent rate information into MIDAS no later than three (3) months after April 1, 2023. This section describes CPA’s plan to meet these requirements.
Time-Dependent Rate Submission to MIDAS via the MIDAS API a) Time-Dependent Rate Submission to MIDAS via the MIDAS API 21 Section 1623.1(c)
22 Order No: 23-0531-10, In the matter of: Joint Parties’ Request for Delay of July 1, 2023, MIDAS Rate Upload Deadline, p. 5 Agenda Page 22
5 On June 9, 2023, CPA, through Calpine Energy Solutions (“Calpine”), uploaded CPA’s rates into MIDAS server. Calpine currently has authorization to upload CPA’s time-dependent rates and any time-dependent rate updates to the MIDAS server. This section of the CPA Plan details Calpine’s scope of work in coordination with CPA to meet the compliance requirements under the LMS. i) Existing Rates Uploaded to MIDAS
Please see attached file in Appendix 1.
ii) Proof of Rates Availability on MIDAS
Please see the attached Appendix 2 for CPA’s existing time-dependent rates that have been uploaded into MIDAS.
iii) Composite Rate Calculation and Submission Solution As mentioned previously, CPA only provides generation services to unbundled customers. As such, CPA has uploaded only its time-dependent rates for generation services into MIDAS. SCE is responsible for the transmission and distribution component. The composite rate calculation contains CPA’s customers’ (who are considered unbundled customers) full rate charges and it includes the CCA generation component of the rate and the IOU’s transmission and distribution component of the rate. In the spirit of mutual collaboration, CPA supports further discussions with SCE and the CEC to find a solution regarding how the composite rate calculation will be calculated, who is responsible to see out the calculation, who should report the calculation, and how it would be made available to customers. 2) Future Rate Uploads: Plan and Current Progress of Internal Infrastructure Upgrade for LMS-Compliant Submission of Current and Future Rates Calpine has and will continue to leverage their existing rate infrastructure to upload current active rates and future rates, which meets current compliance standards.
Calpine, or any of CPA’s future billing vendors, will continue to work on CPA’s submission of current rates. In such cases where there have been issues with uploading rates into MIDAS, Calpine (or any future vendor) will communicate with the CEC in order to comply with the rate upload obligation. 3) Plan to Provide Rate Identification Number(s)(“RIN(s)”) on Customer Billing Statements and Online Account Using Both Text and QR Code
a) Implementation Timeline
A testing plan and kick-off meeting with SCE, as CPA’s billing agent, and Calpine, as CPA’s billing vendor, was held on January 24, 2024, where CPA, Calpine, and SCE discussed a path forward to display RIN(s) on customer billing statements using both text and QR codes. SCE plans to implement RIN(s) in their internal system by March 21, 2024, with the expectation that the RIN will appear on customer bills starting April 1, 2024.
b) Billing System Update and Current Progress
Calpine will add the RIN into an existing Electronic Data Interchange (EDI) transaction and send it to SCE anytime Calpine generates a bill. SCE will then take this EDI 810 transaction and create the QR code, which will be shown on customer bills.
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6 c) Proposed Text Design and QR Code Design and Proposed on Bills SCE will provide the QR code for the CCA portion of the bill. The RIN, QR Code, and text will appear on CCA portion of the bill (as requested). A mockup bill that displays the RIN(s) and QR code has been provided by SCE.
d) QR Code Linked Webpage (if any) including timeline for webpage creations and finalization, webpage objectives, proposed contents, and considerations or plan to include LMS compliant programs and or rates available for the customer to encourage enrollment.
CPA will not link the QR code to a webpage. The QR code will only be a text code that contains the customer’s RIN. The QR code can be scanned when setting up new smart appliances or alternatively, the customer can type in their 16-digit RIN. This approach would make it easier for smart devices to find the RIN and connect to Single Statewide RIN Access Tool rather than being directed to a webpage. CPA may reconsider as more progress has been made on the development of the Single Statewide Standard Tool and accordingly will provide a timeline for webpage creation, webpage objectives, proposed contents, and how to include LMS compliant programs or rates to encourage enrollment if CPA decides to link a webpage to the QR code.
4) Plans and Current Participation in the Development of Single Statewide Standard Tool a) Development of Single Statewide Standard Tool
Please refer to the response in Chapter 2, Section (4)(b) of this Revised Plan. b) Implementation of Single Statewide Standard Tool
CPA has been working with the other regulated load serving entities (”LSEs”) on creating the statewide RIN tool pursuant to 20 CCR Section 1623(c). A proposed plan for the tool was submitted to the CEC for review on October 1, 2024. CPA will continue to work with other LSEs and the CEC to implement and maintain the statewide RIN tool in a timely manner subject to the tool’s approval by the Commission.
Chapter 3: Marginal Cost-Based Rates
1) Introduction to Marginal Cost-Based Rates Evaluation and Regulations Section 1623.1(a)(1) requires each Large CCA to evaluate the cost-effectiveness, equity, technological feasibility, benefits to the grid, and benefits to customers of marginal cost-based rates for each customer class. After evaluating marginal cost-based rates, the CCA may instead propose and evaluate specified programs and/or delay or modify compliance with the LMS requirements.25 Section1623.1(b)(2) requires Large CCAs within twenty-seven months of April 1, 2023, or by July 1, 2025, to apply to its rate-approving body for approval of at least one marginal cost-based rate. These 25 See Section 1623.1(a)(2)(A)-(D). A CCA’s rate approving body may approve a plan to delay or modify compliance if the rate approving body determines that the plan demonstrates that compliance with the LMS requirements would not be cost-effective or technologically feasible to implement.
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7 CCAs may also apply for approval of marginal cost-based rates that are offered by the IOUs in whose service areas the CCAs exist in.
Section 1623.1(b)(4) requires each CCA within fifty-one months of April 1, 2023, or by July 1, 2027, to offer to each of its electricity customers voluntary participation in either a marginal-based rate developed according to Section 1623.1(b)(2), if such rate is approved by the CCA’s rate-approving body, or a program identified according to Subsection 1623.1(b)(3).
This Chapter provides an overview of CPA’s current time-dependent rates and addresses the requirement to evaluate the implementation of marginal cost-based rates on the timeframe specified in the LMS.
2) Overview of CPA’s Current Time-Dependent Rates
CPA customers select their rates from three rate options: 100% Green Power (currently with 100% renewable energy content); Clean Power (currently with 50% renewable energy content); and Lean Power (currently with 40% clean energy content). CPA also offers time-of-use (“TOU”) rates, and these TOU rates vary by season and by TOU period.
a) Season
CPA TOU rates reflect two seasonal rate periods: Summer and Winter. Summer is from June 1 through September 30 of each calendar year, and Winter is from October 1 through May 31. b) TOU periods
The majority of CPA TOU rates contain three distinct TOU periods for each season, with a peak period from either 4:00 PM to 9:00 PM or 5:00 PM to 8:00 PM. Summer peak periods are only applicable during non-holiday weekdays while winter peak periods are applicable every day. CPA also offers a TOU rate for lighting customers with a peak period from 8:00 AM to 4:00 PM, and legacy TOU rates with a summer-only peak period from 12:00 PM to 6:00 PM.
c) CPA Rate Classes
Nearly all CPA customers are offered at least one time-dependent rate. CPA has 10 rate classes:
residential, small commercial, medium commercial, large commercial, industrial, pumping and agriculture, electric vehicle, lighting, traffic control, and wireless technology. Except for traffic control and wireless technology customers, all customers have access to TOU rates. Approximately 70% of CPA customers and 83% of CPA load are on TOU rates. In addition to TOU rates, CPA also offers load management programs and peak management pricing to particular customer classes which provide additional price signal mechanisms for enhanced demand flexibility (discussed further in Chapter 5). i) Residential Rates
CPA’s default residential rate is a TOU rate with a peak period from 4:00 PM to 9:00 PM. ii) Commercial, Industrial and Pumping and Agriculture Rates All of CPA’s commercial, industrial, and pumping and agriculture rate offerings are TOU rates.
Default rates have a peak period from 4:00 PM to 9:00 PM. Customers on default commercial, industrial, and agriculture and pumping rates are also eligible to participate in CPA’s Peak Management Pricing
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8 program, which provides an additional hourly price signal to encourage conservation during peak pricing events (discussed further in Chapter 5).
iii) Electric Vehicle Rates
All of CPA’s electric vehicle (“EV”) rate offerings are TOU rates with a peak period from 4:00 PM to 9:00 PM.
iv) Lighting Rates
CPA offers one lighting TOU rate with a peak period from 8:00 AM to 4:00 PM. 3) CPA’s Rate Development Process
a) Board of Directors approval
The setting of all retail rates for power sold by CPA is the responsibility of CPA’s Board. The Board typically adopts annual rate updates in June with an effective date of July 1, and may elect to implement interim rate changes throughout the fiscal year. i) Guiding Board Policy Objectives
CPA’s purpose, as articulated in its Joint Powers Agreement27, includes providing customers with rate options that are lower than, or competitive with, the IOU’s rates; promoting energy efficiency, demand response, and reduced energy consumption; and providing low-income customers with affordable and flexible energy options, including the provision of discounted rates to eligible low-income households. In its annual rate-setting process, CPA’s Board considers CPA’s cost of service, equitability, financial sustainability, affordability, rate stability, and competitiveness when adopting rate changes. ii) Rate Design and Implementation
CPA rate structures mirror SCE generation rate structures (e.g., seasons, TOU periods, demand charges) to minimize customer confusion and align generation and delivery price signals to shift or reduce load. Following adoption by CPA’s Board , CPA’s rates are implemented in collaboration with Calpine, CPA’s billing and data administrator, and SCE, which provides CPA customers with a single monthly bill that includes CPA generation charges along with SCE delivery charges. 4) Marginal Cost-Based Rate Evaluation
In this section, CPA describes its current qualitative evaluation of the possible advantages and drawbacks associated with marginal cost-based rates absent of quantitative data. CPA’s participation in the SCE Pilot will allow CPA’s staff to gather quantitative data to support evaluation of the cost-effectiveness, benefits to customers, and technological feasibility of offering marginal cost-based rates to each customer class after the SCE Pilot’s conclusion.
a) Cost-Effectiveness Evaluation
In this section, CPA provides a qualitative evaluation of the possible advantages and drawbacks associated with marginal cost-based rates. At present, there is not enough information available for CPA to conduct a quantitative assessment of the overall cost-effectiveness of these rates. 27 CPA Amended and Restated Joint Powers Agreement, November 3, 2022, https://files.cleanpoweralliance.org/uploads/2022/12/Amended-and-Restated-JPA-Final-11-03-2022-fully-executed.pdf
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9 i) Estimated Costs
Costs for implementing marginal cost-based rates will include rate design, information technology development and setup, and marketing, education, and outreach (“ME&O”). ii) Rate Design Costs
To ensure that marginal cost-based rate design both enables customer participation and is reflective of CPA’s cost to serve, CPA will likely incur incremental rate design costs related to customer outreach, market research, and pilot development. The outreach costs specifically within this section relate to rate design format. However, there may be some overlap between Rate Design Costs and ME&O Costs detailed below.
iii) Information Technology Costs
The implementation of marginal cost-based rates is expected to require substantial investment in new data management, analytical, billing, and reporting capabilities to handle the significant increase in volume and complexity of marginal cost-based rates that vary on an hourly or sub-hourly basis. iv) Marketing, Education, and Outreach (“ME&O”) Costs
Recruiting and retaining customers on marginal cost-based rates will require substantial investment in ME&O, both directly to customers and through partnerships with automated service providers (“ASPs”), SCE, community-based organizations, and other stakeholders or parties. Education along with rebates or other incentives may be essential to motivate residential and small and medium business customers to install and utilize automated technologies to optimize electricity usage (or dispatch from behind-the-meter generation and storage systems) based on hourly or sub-hourly price signals.
CPA’s prior experience with opt-in programs, particularly novel and complex ones, suggests that customer acquisition costs per kWh of load shifted may be quite high in the early stages of program roll out. (1) Estimated and Potential Benefits
As the cost of electricity service can vary significantly by hour and season, marginal cost-based rates can provide strong price signals to customers and encourage beneficial load shift and economic optimization of electricity demand. The benefits of marginal cost-based rates include:
• Shifting electricity consumption from high market price hours to low market price hours, leading to reduced energy costs for all customers.
• Decreasing electricity usage during peak load demand periods, thereby lessening the requirement for additional generation capacity investments.
These financial benefits may accrue directly to marginal cost-based rate participants and may also result in a lower overall cost of generation service to the benefit of all customers. In addition to the potential financial benefit, the ability to shift electricity demand may also contribute to lower overall greenhouse gas emissions and enhanced air quality.
(2) Rate Design Effectiveness and the Realization of Benefits Effective rate design is critical for the delivery of benefits related to marginal cost-based rates.
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10 Ensuring that marginal cost-based rates both incentivize beneficial load shifting and appropriately reflect the impact to CPA’s cost of service will require insight into the level of customer rate and technology adoption, demand profiles, and price sensitivity. Implementing marginal cost-based rates in the absence of such understanding could lead to ineffective rate design and adverse financial consequences for both participating and non-participating customers.
Cost-effective rate design, customer engagement, and implementation will require additional research, customer feedback, and insight into the following:
Available Technology
Dynamic and highly variable marginal cost-based rates are likely to be most effective when paired with customer technology capable of processing price signals on an hourly or sub-hourly basis and reacting with an automated load response, such as smart thermostats, smart appliances, and electric vehicle supply equipment. In the absence of enabling technology, customers are less likely to respond to these price signals, limiting the benefits of marginal cost-based rates and potentially resulting in higher customer bills.
CPA currently provides load management programs that utilize customer technologies for event-based demand response. However, more information is needed regarding the types of devices utilized among CPA customers and within customer classes, and whether they can process and respond to hourly or sub-hourly price signals.
Customer Adoption
The number of customers interested in participating in marginal cost-based rates is required to evaluate the resulting load response and potential cost reduction. A sufficient level of adoption is needed to ensure that set-up and ongoing costs of implementation are recovered, and that marginal cost-based rates do not adversely impact non-participating customers.
Customer Experience
CPA’s current and planned load management programs are based on demand response events, which occur during times of higher than seasonally projected energy demand. Participating customers may also opt out of demand response events. Marginal cost-based rates will differ from these traditional demand response programs as customers will be provided price signals on an hourly or sub-hourly basis, where more frequent load management decisions may be necessary to lower monthly energy bills. If customers do not have a sufficient understanding of the change from TOU rates to marginal-cost based rates or are unable to modify their electricity demand in response, there is potential for significantly increased customer bills, negative customer experience, and customer opt-outs.
Customer Price Elasticity
Price elasticity refers to the responsiveness of electricity demand in response to changes in price.
Determination of the price elasticity of each customer class will be required to estimate the expected load response and potential cost reduction from the implementation of marginal cost-based rates. While some understanding of customer load shift capability can be obtained from existing load management programs, these programs are limited to demand response events and do not provide insight into the effect of hourly or sub-hourly price signals on customer demand.
Investor-owned Utility Marginal Cost-Based Delivery Rates
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11 As mentioned previously, CPA is a CCA providing generation service to participating communities within the service territory of SCE. CPA customers’ delivery service provider is SCE, which may also offer marginal cost-based rates for delivery. Information regarding the alignment of CPA marginal cost-based generation rates and rate structure with SCEs marginal cost-based delivery rates and rate structure will be necessary to determine the total price signal that is provided to customers as well as the ability of customers and ASPs to integrate and comprehend those signals, which may ultimately impact the expected customer adoption, load response, and potential cost reduction from marginal cost-based rates. (a) Discussion
While marginal cost-based rates hold the potential for enhanced benefits compared to TOU rates and load management programs, CPA does not currently have sufficient information to quantify these benefits or CPA’s ability to realize them. Factors such as available technology, customer adoption and experience, price elasticity, and the alignment with marginal cost-based delivery rates contribute to this uncertainty. The development of marginal cost-based rates is likely to incur substantial setup and ongoing costs. Without an informed rate design and implementation process, the development could result in additional costs borne by customers. Nonetheless, CPA does recognize the potential benefits of marginal cost-based rates and will continue gathering data to support an informed consideration of future marginal cost-based rate offerings by the CPA Board.
b) Equity Evaluation
CPA does not currently have sufficient information to make a quantitative assessment of the potential impact of marginal cost-based rates across various customer classes and segments. The following is a qualitative discussion of the equity considerations for marginal cost-based rates. i) Equitable Access to Direct Benefits
Direct benefit from marginal cost-based rates is derived from the ability of customers to receive and respond to marginal cost-based rates. The following criteria contribute to a customer’s ability to respond to marginal cost-based rates.
ii) Load Flexibility
The degree to which customers can adjust their electricity consumption will significantly influence their capacity to adapt to marginal cost-based rates. Residential customers who spend considerable time at home may possess greater flexibility in modifying their electricity usage compared to those who spend less time at home. Similarly, commercial clients who can freely adjust the timing of their daily activities stand to achieve more significant savings on their bills compared to commercial customers with less flexible operations.
iii) Enabling Technology
Access to enabling customer technology is a critical pathway for customers to directly benefit from marginal cost-based rates. The upfront cost of enabling technology is a barrier to accessing these benefits and may disadvantage low-income customers and communities. For commercial customers, industry-specific technologies may result in different levels of accessibility between customers and within the same customer class.
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12 iv) Educational Tools
A sufficient understanding of the structure of marginal cost-based rates, and the potential impact on energy costs, is critical to maintain a positive customer experience. Access to educational materials and tools will be essential for customers to make an informed decision about the adoption of marginal cost-based rates and how to manage their monthly electricity demand based on hourly or sub-hourly rates.
Customer education may be necessary because marginal cost-based rates that are based on prevailing market energy costs will be subject to hourly or sub-hourly market volatility, where locational marginal price fluctuations may result in more substantial price swings than customers experience under TOU rates. v) Equitable Access to Indirect Benefits
Marginal cost-based rates can lower costs related to generation capacity and market energy purchases, which may provide indirect benefits to non-participating customers. In addition, beneficial load shift has the potential to lower greenhouse gas emissions and enhance air quality. As discussed, more information is required for effective rate design and implementation that would result in indirect financial benefits to all customers, as well as which customers and locations may be impacted by changes in greenhouse gas emissions and air quality.
(1) Discussion
(a) Evaluation Conclusion
At this time CPA is unable to conclude that the implementation of marginal cost-based rates would result in equitable direct and indirect benefits to CPA customers. Additional information on available technology, customer adoption and experience, price elasticity, and the alignment with marginal cost-based delivery rates is required to determine the magnitude of the associated benefits that would be attributed to various customer segments and classes.
c) Technological Feasibility Evaluation
i) CPA’s Current Technology Systems
Meters
The majority of CPA customers have smart meters capable of hourly or 15-minute interval reads, a requirement for implementation of marginal cost-based rates. Customers that do not currently have a smart meter will require a meter upgrade to enable participation. Sub-hourly marginal-cost based rates will require additional investment in smart meters and IT infrastructure to enable participation for most CPA customers as approximately 32% of CPA smart meters can provide 15-minute interval reads.
Access to Real-Time (Dynamic) Hourly Rates
CPA does not currently have the internal capability to develop, maintain, and provide customers and ASPs with access to hourly or sub-hourly dynamic rates. Although CPA’s time-dependent rates are now available through MIDAS, it is not clear what additional internal or external system capabilities will be required to enable uploading and access to rates that change on a day-ahead or real time basis and integration of dynamic generation and delivery rates. CPA will need to either build these capabilities internally or contract with a third-party to develop and maintain rates which integrate with available customer, ASP, and/or statewide tools and technologies (e.g., a statewide pricing machine).
Billing System
CPA’s billing system is not currently equipped to ingest and bill customers based on hourly or sub-hourly rates. The cost and time that will be required by CPA’s billing and data administrator to develop, test, and
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13 implement this capability is currently unknown but is likely substantial. Also unknown at this time are 1) the technical feasibility of processing the significantly higher volume of data within SCE’s current four-day window for turning around bill charges; and 2) the ability to provide bill presentment for unbundled customers that is consistent with bundled customer experience given current limits established by SCE on the quantity and quality of information CPA is able to incorporate into customer bills. Changes in either of these areas may require significant system investments both by CPA and by SCE.
Enrollment
While CPA maintains distinct rates (prices), CPA rate structures mirror those of SCE. For a permanent marginal cost-based rate offering, participating CPA customers would also need to enroll in a marginal cost-based rate with SCE for delivery services.
Customer Educational Tools and Controls
CPA currently works with a vendor to enroll and manage participation of customers in event-based demand response programs that involve automated load shifting (see Chapter 4 for more information).
The programs and technologies in use do not currently provide the capability to ingest and respond to hourly or sub-hourly price signals in real time.
ii) Information Technology Roadmap
CPA’s technology roadmap will be developed in conjunction with developing and implementing one or more marginal cost-based rate pilots as detailed in Chapter 3, Section 5 of this Revised Plan. iii) Enabling Customer Technology
Customers will need smart devices (e.g., smart thermostats, battery energy storage systems, electric vehicle charges, energy management systems, other applicable devices, etc.) that can access hourly or sub-hourly rates and automatically shift load in response to those price signals. Penetration of such technologies is currently limited, especially among residential, small business, and low-income customers.
(1) Discussion
(a) Evaluation Conclusion
CPA and its billing and data administrator currently lack the capability to implement hourly or sub-hourly marginal cost-based rates. CPA anticipates that participating in one or more dynamic rate pilots, as detailed in Chapter 3, Section 5 of this Revised Plan, will provide CPA with data and insights that will help inform the specifications and budget for future internal technology investments and/or vendor agreements.
d) Benefits to Customers
i) Avoided Capacity Needs
Generation providers providing service within the California Independent System Operation (“CAISO”) electricity market must procure sufficient generation capacity to meet peak customer demand and demonstrate resource adequacy. Demand reduction during peak periods can both enhance grid reliability and reduce the need for investments in new generation capacity, which can indirectly benefit all CPA customers.
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14 ii) Avoided Energy Purchase Costs
As a generation service provider, CPA purchases electricity through its long-term and short-term Power Purchase Agreements (“PPAs”), and from the CAISO on behalf of its customers. The ability of marginal cost-based rates to send price signals that shift electricity demand away from higher price hours and towards lower price hours can directly lower energy costs for participating customers, and indirectly benefit all CPA customers.
iii) Avoided GHG Emissions & Environmental Benefits
GHG emissions, primarily carbon dioxide and methane, trap heat in the Earth's atmosphere, contributing to global warming and leading to adverse effects such as more frequent and severe heatwaves and rising sea levels. Thermal generation can also adversely impact air quality in nearby communities.
CPA was recently ranked the number one green power provider in the United States29 and is committed to the reduction of GHG emissions from electricity generation. CPA does not own nor contract with any thermal generation suppliers and therefore does not incur any regulatory costs related to GHG emissions.
However, the potential of marginal cost-based rates to shift electricity demand away from peak periods with higher thermal generation and towards hours with a greater proportion of renewable generation is aligned with CPA’s core objectives and benefits all customers. iv) Customer Bill Impacts
Marginal cost-based rates provide customers with the opportunity to respond to hourly or sub-hourly price signals that lower their energy cost compared with their otherwise applicable electricity rate.
However, even for customers with enabling customer technology, access to educational tools, and load flexibility, there is a risk of increased customer bills. Additionally, an informed and effective rate design will be required to ensure that the implementation of marginal cost-based rates does not result in additional costs borne by non-participating customers.
v) Customer Experience
Marginal cost-based rates change on an hourly or sub-hourly basis, reflecting changes to underlying energy market dynamics are likely to vary to a much greater degree than current TOU rates.
Significant customer education will be required to ensure that customers both understand the structure of marginal cost-based rates and obtain the necessary tools and information to make informed decisions about their electricity usage.
(1) Discussion
(a) Evaluation Conclusion
At this time CPA is unable to conclude that the potential benefits associated with marginal cost-based rates would be realized or quantify the magnitude of those benefits. Additional information on available technology, customer adoption and experience, price elasticity and the alignment with marginal cost-based delivery rates is required for effective rate design that results in the benefits discussed. Chapter 3, Section 5 below outlines CPA’s compliance approach after concluding that additional information is needed to adopt marginal cost-based rates at this time. 29 National Renewable Energy Laboratory, 2022 Utility Green Pricing Programs Rankings, https://www.nrel.gov/analysis/green-power.html
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15 5) CPA’s Compliance Approach: Participating in the SCE Pilot to Obtain Data for Further Cost-Benefit Analysis for Implementing Cost-Based Rates CPA’s participation in the SCE Pilot will satisfy the LMS Regulations and provide CPA with data to more effectively evaluate adoption of marginal cost-based rates. Section 1623.1(a)(1) of the LMS Regulations requires Large CCAs such as CPA to submit a compliance plan that details how Large CCAs must meet certain LMS goals. As described in Chapter 1, Section 2(b) of this Revised Plan, a Large CCA that does not plan to proposed development of marginal cost-based rates may satisfy the Section 1623.1(a)(1) requirement by proposing “programs that enable automated response to marginal cost signal(s) for each customer class and evaluate them based on their cost-effectiveness, equity, technological feasibility, benefits to the grid, and benefits to customers.”31 CPA’s participation in the SCE Pilot satisfies the LMS requirements Section 1623.1(a)(1)(B) because the SCE Pilot is a program that will enable automated response to marginal cost signals and participation in the SCE Pilot will be evaluated by CPA.
Furthermore, Section 1623.1(b)(2) requires Large CCAs such as CPA to apply to its rate-approving body for approval of at least one marginal cost-based rate for any customer class(es).32 CPA satisfied this requirement by presenting to CPA’s Board a marginal cost-based rate in connection with the CPA’s Board’s approval of CPA’s participation in the SCE Pilot.
CPA recognizes the potential of marginal cost-based rates to result in beneficial load shift that benefits both participating and non-participating customers and will continue to gather data to better inform consideration by CPA’s Board of future implementation. a) CPA Will Participate in the SCE Pilot
i) SCE Pilot
Beginning in 2023, SCE implemented a dynamic rate pilot for select customers33 and in June of 202434 the SCE Pilot was to be available for one CCA in its service area35. The SCE Pilot includes both a subscription rate component, based on average customer hourly usage, and an hourly dynamic rate that is billed to incremental usage credited to a reduction in usage and an hourly dynamic rate that is billed to incremental usage or credited to a reduction in usage. CPA has engaged in discussions with SCE on its SCE Pilot since the first quarter of 2024. CPA participation in the SCE Pilot was brought to CPA’s Board for approval on July 10, 2025. This satisfied section 1623.1(a)(1) and Section 1623.1(b)(2) of the LMS Regulations. Given CPA’s Board approval of this Revised Plan, CPA will file a Tier 1 Advice Letter to participate in the SCE Pilot. After the Advice Letter is approved by the CPUC, it is currently estimated that the earliest SCE can begin enrollment of CCA customers in the SCE Pilot is November 2025.36 The SCE Pilot will conclude on December 31, 2027. All customer classes will be eligible to participate in the 31 Section 1623.1(a)(1)(B)
32 Section 1623.1(b)(2)
33 Decision 21-12-015, Phase 2 Decision Directing Pacific Gas and Electric Company, Southern California Edison Company, and San Diego Gas & Electric Company To Take Actions To Prepare For Potential Extreme Weather in the Sumers of 2022 and 2023
34 There is a current delay in the implementation of the SCE dynamic rate pilot. The expected time that unbundled customers participation will begin is November 2025.
35 D.24-01-032, Decision to Expand System Reliability Pilots of Pacific Gas and Electric Company and Southern California Edison Company at p.40
36 Given current implementation delays in the SCE Pilot, pumping and agriculture customers may not be able to enroll in the SCE Pilot until December of 2025.
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16 SCE Pilot. CPA will cap enrollment of CPA customers in the SCE Pilot at 15% of SCE’s Pilot enrollment target of 50 megawatts (i.e., 7.5 megawatts), proportional to CPA’s load share ratio within Southern California Edison’s (SCE) territory. The SCE Pilot rate, designed by SCE, is a marginal cost-based rate. ii) CPA Permanent Marginal Cost-Based Rate
CPA’s participation in the SCE Pilot will provide CPA with additional information and insights into the impact of marginal-cost based rates on customer behavior and CPA’s cost or service, which may enable CPA staff to conduct a more robust cost-benefit analysis on the efficacy of marginal-cost based rates.
Chapter 4 Load Flexibility Programs
1) Load Flexibility Programs
a) LMS Regulation Overview
The LMS Regulations state that if an entity finds that adopting marginal cost-based rates on at least an hourly basis is not cost-effective, equitable, technologically feasible, and does not deliver benefits to the grid and to customers for each customer class,43 then a large CCA can propose programs that enable automated response to marginal cost signal(s) for each customer class and evaluate them based on their cost-effectiveness, equity, technological feasibility, benefits to the grid, and benefits to customers.44 Section 1623.1(b)(3) describes that no later than 18 months after April 1, 2023, or by October 1, 2024, each CCA shall submit to the CEC Executive Director a list of load flexibility programs deemed cost-effective by the CCA.45 This section further states that the portfolio of identified programs must provide at least one option for automating response to MIDAS signals for each customer class that the rate-approving body determines such a program will materially reduce peak load.46 Section 1623.1(b)(4) describes that within 51 months of April 1, 2023, or by July 1, 2027, each CCA shall offer to each of its electricity customers voluntary participation in either a marginal cost-based rate, if such rate is approved by the CCA’s rate-approving body, or a cost-effective program identified according to Section 1623.1(b)(3).47
As described in Chapter 3 of this Revised Plan, CPA will participate in the SCE Pilot to satisfy the compliance obligations in the LMS Regulations. Depending on the results and cost-benefit analysis of CPA’s participation in the SCE Pilot, CPA may or may not elect to use its load flexibility programs to fulfill the LMS Regulations.
b) Overview of CPA’s Current Load Flexibility Programs
The implementation of customer programs that support grid reliability is a priority for CPA. CPA has implemented demand response programs to support the conservation of energy during times of high 43 Section 1623.1(a)(1)(A)
44 Section 1623.1(a)(1)(B)
45 Section 1623.1(b)(3)
46 Section 1623.1(b)(3)(A)
47 Section 1623.1(b)(3)
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17 demand on the grid. Robust demand response programs help contribute to grid resiliency and reliability, provide incentives and savings to customers, lower CPA’s procurement costs, and shift customer usage to less GHG intensive times of day. Furthermore, demand response provides an opportunity for customers to play a role in the operation of the electric grid by reducing their electricity usage during peak demand days when wholesale prices are highest in exchange for financial incentives.
Demand response is also an important tool that realizes the objectives identified in the Resiliency and Grid Management category of the CPA Local Programs for a Clean Energy Future plan.53 This Local Programs plan is the strategic vision for our customer programs and was adopted by CPA’s Board in June 2020, then refreshed in 202354. The Local Programs plan details the programs and services to be implemented, all of which are intended to result in community investment and to support our customers in co-managing their relationship with the energy system. CPA’s programs are designed to bring local benefits to member communities, such as customer cost savings, economic and workforce development, improved air quality and public health, and more resilient communities.
Load flexibility in our service territory is of notable importance and CPA is accounting for new programs to prepare for the future needs in grid management. While our current offerings are event-based demand response, we are reviewing opportunities to support overall daily load management through pricing signals. As the grid conditions continue to change, it is becoming even more important to educate our customers on how to manage their energy usage in a way that is best for them, the grid, and the environment. In the near term, CPA is planning to pilot two new programs: the first which will support residential customers with TOU rate pricing indicators through smart light switches, and the second which will implement managed charging to shift EV charging load from peak times. c) List of CPA’s Current and Planned Program Offerings That Support Load Flexibility Current Residential Programs
CPA considers “Current” programs to be those programs that are currently offered to its customers at the time that the CPA Plan is submitted. While CPA proposes to proceed with the SCE Pilot to meet the LMS requirements, this Revised Plan also includes a list of programs that support load flexibility beyond the SCE Pilot.
Power Response Smart Home
Power Response Smart Home is a demand response program where residents with eligible smart devices receive financial incentives for saving energy during times of high demand. The program is intended to encourage residential homeowners to reduce energy usage during times of higher than seasonally projected energy demand. Eligible devices include ecobee thermostats, Nest thermostats, Sensi thermostats, ChargePoint EV chargers, Wallbox EV chargers, and SolarEdge home battery systems. Customers receive an incentive for enrolling and annual incentives for continued participation. Incentives vary by device enrolled. Working with AutoGrid as the program implementer, CPA automatically manages devices during events to reduce load. 53 CPA Local Programs for Clean Energy Future plan, https://d2hgu8srlfn9ex.cloudfront.net/uploads/2020/06/Local-Programs-for-a-Cleaner-Future-Report.pdf 54 Local Programs for a Clean Energy Future Action Plan, 2023, https://files.cleanpoweralliance.org/uploads/2023/07/CPALocalProgramsMidCycleRefreshActionPlan_062923.pdf
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18 • Types of Hourly MIDAS Signals: None, this program uses hourly day-ahead CAISO pricing signals.
• Target End-Uses/Customers: Residential customers with smart connected devices. • Equipment requirements: Smart connected devices, which currently includes smart thermostats, EV chargers, and home batteries.
• Participating 3rd party Automation Service Providers: Google Nest, ecobee, Emerson Sensi, ChargePoint, Wallbox, and SolarEdge.
• Control Algorithms: Energy Saving Events are called based on day-ahead market pricing triggers. AutoGrid is the program implementer for Power Response. AutoGrid sends dispatch signals to the Original Equipment Manufacturers (“OEMs”) via AutoGrid Flex Distributed Energy Resource Management System (“DERMS”) platform. The OEM communicates to the smart devices to adjust for reduced load or battery discharge. • Enrollment Projections: Current enrollment as of 2/5/2024 for the program is 1,488 households and 1,761 devices, with a forecast of 3,000 devices enrolled by the end of the 2024 calendar year.
• Load Impact Projections: Approximately 1.7 MW of dispatchable capacity is currently enrolled, with a forecast of 2.8 MW by the end of the 2024 calendar year.
Power Response Home
Power Response Home is a demand response program open to all of CPA’s residential customers. The program is intended to encourage residential homeowners to manually reduce energy usage during times of higher than seasonally projected energy demand. Suggestions to reduce energy use during events include thermostat adjustments, turning off lights, delaying running of appliances, and/or unplugging appliances not in use. Participants receive $2/kWh reduced per event as an incentive. An enrollment incentive of $20 is also offered to eligible income-qualified customers on CARE/FERA rates and customers with a service address in a disadvantaged community.
• Types of Hourly MIDAS Signals: None, this program uses hourly day-ahead CAISO pricing signals.
• Target End-Uses/Customers: Residential customers.
• Equipment Requirements: No equipment is needed to participate. • Participating 3rd Party Automation Service Providers: Not applicable. • Control Algorithms: Energy Saving Events are called based on day-ahead market pricing triggers. AutoGrid is the program implementer for Power Response. AutoGrid sends notifications directly to behavioral demand response customers via AutoGrid Flex DERMS platform. Behavioral demand response customers then manually adjust their home system to reduce energy use.
• Enrollment Projections: Current enrollment for the program is 1,150 homes, with a forecast of 3,000 homes enrolled by the end of the 2024 calendar year. • Load Impact Projections: Approximately .35 MW of dispatchable capacity is currently enrolled, with a forecast of .9 MW by the end of the 2024 calendar year.
Power Response Multifamily Community
The Power Response Multifamily Community Program offers an incentivized energy-saving opportunity for multifamily buildings meeting affordable housing eligibility requirements.
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19 The program provides smart connected thermostats and financial incentives to building owners and residents for enrolling and participating in demand response events. Working with AutoGrid as the program implementer, CPA automatically manages devices during events to reduce load. • Types of Hourly MIDAS Signals: None, this program uses hourly day-ahead CAISO pricing signals.
• Target End-Uses/Customers: Affordable multifamily communities and their residents. • Equipment Requirements: Smart connected thermostats, which are provided by CPA and installed by building management.
• Participating 3rd Party Automation Service Providers: Emerson Sensi. • Control Algorithms: Energy Saving Events are called based on day-ahead market pricing triggers. AutoGrid is the program implementer for Power Response. AutoGrid sends dispatch signals to OEMs via AutoGrid Flex DERMS platform. The OEM communicates to the smart devices to adjust for reduced load.
• Enrollment Projections: A forecast of 300 multifamily units to be enrolled by the end of the 2024 calendar year.
• Load Impact Projections: A forecast of 0.3 MW by the end of the 2024 calendar year.
Current Commercial Programs
Power Response Commercial Leaders
The Power Response Commercial Leaders Program incentivizes business and public sector customers for participating in demand response events and reducing their energy use during times of high demand. Participants receive up to $80/kW each year for power reduced during Commercial Energy Saving Events. CPA works directly with interested businesses to create a custom plan to identify a customer plan. This may include manual adjustments to their systems or through smart devices that can be connected to and adjusted automatically. • Types of Hourly MIDAS Signals: None, this program uses hourly day-ahead CAISO pricing signals.
• Target End-Uses/Customers: CPA customers on a business rate, including commercial and public agency customers.
• Equipment Requirements: Equipment is not required, but compatible smart devices and energy management systems may be used if available.
• Participating 3rd party Automation Service Providers: Any compatible connected device or energy management system supported by our program implementer, AutoGrid. • Control Algorithms: Commercial Energy Saving Events are called based on day-ahead market pricing triggers. AutoGrid is the program implementer for Power Response. AutoGrid sends dispatch signals to the OEMs when applicable and notifications directly to sites that are manually adjusting their load via AutoGrid Flex DERMS platform. The OEM communicates to the smart devices to adjust for reduced load, as applicable. • Enrollment Projections: Current enrollment for the program is 1 public agency building, with a forecast of 10-15 buildings enrolled by the end of the 2024 calendar year. • Load Impact Projections: Approximately 11 kW of dispatchable capacity is currently enrolled, with a forecast of 150 kW by the end of the 2024 calendar year.
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20 Peak Management Pricing
Peak Management Pricing is a demand response program that encourages eligible commercial and municipal customers to voluntarily take action to power down appliances, electronics, air conditioning, or other equipment during peak heat days and get summer bill credits in return. Participants receive summer bill credits in exchange for the application of a surcharge on energy consumed during demand response events to encourage curtailment during peak demand days.
• Types of Hourly MIDAS Signals: None, this program uses hourly day-ahead CAISO pricing signals.
• Target End-Uses/Customers: Commercial customers on one of the following rates: TOU-GS-1-E, TOU-GS-2-D, TOU-GS-3-D, TOU-8-D, TOU-PA-2-D, or TOU-PA-3-D. • Equipment Requirements: No equipment is needed to participate. • Participating 3rd Party Automation Service Providers: Not applicable. • Control Algorithms: Events are called by CPA based on hourly day-ahead market pricing triggers.
• Enrollment Projections: Current enrollment for the program is 1 commercial business. • Load Impact Projections: Due to limited enrollment, a forecast is unknown at this time.
Planned Residential Programs
CPA considers “Planned” programs to be those programs that have an established schedule for implementation.
Smart Light Switches
CPA will be launching a pilot in April 2024 with the goal of providing customers with time-based price signals through a color-coded display in the residential units of eligible multifamily communities. Smart light switches are to be offered to multifamily buildings meeting an affordable housing eligibility requirement. The smart light switch plates installed will have embedded color-coded technology that encourages end-users to reduce their bills and carbon emissions when energy on the grid is most expensive, and/or carbon intensive. Signals will be created based on CPA’s time-based electric rate signals and sent to an easy-to-understand informational display. Participating customers will be able to make educated decisions based on these pricing signals that directly impact their energy bill. • Types of Hourly MIDAS Signals: None, this program intends to use time of day pricing signals based on CPA’s rates.
• Target End-Uses/Customers: Affordable multifamily housing residents. • Equipment Requirements: Smart light switches with color-coded signal technology. • Participating 3rd Party Automation Service Providers: Flick Power. • Control Algorithms: Price-based signals will be dispatched daily to all participating residents with a smart light switch. Price signals will be based on CPA’s TOU rates. • Enrollment Projections: 300 multifamily units during the pilot phase in 2024. • Load Impact Projections: As this is a 1-year pilot project, CPA intends to review the data compiled for this first year to review the load impact achieved by issuing price-based signals to residential customers.
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21 Planned Commercial Programs
Additional commercial programs are in the early stages of research and CPA will update the CPA Plan, as appropriate.
2) Evaluation of Programs
As detailed above, CPA has a load flexibility program portfolio offering participation pathways to all CPA customers. The current demand response programs are event-based and use hourly day-ahead price signals from the CAISO to dispatch our programs on high-demand and high-cost days. CPA is also evaluating daily load management programs for grid flexibility, using hourly day-ahead price forecasts and price signals based on CPA’s TOU rates to support daily grid demands. The quantitative benefits of adding a MIDAS signal to CPA’s programs are unknown at this time. CPA is evaluating opportunities to implement daily load management strategies through price signals and will be better equipped to assess the benefits and cost effectiveness of incorporating MIDAS following such pilots. In October 2024, CPA submitted to the CEC a list of load flexibility programs deemed cost-effective by CPA. i) Cost Effectiveness
CPA cannot conclude that the development of new programs that allow for automated responses to marginal cost-based rates would be cost-effective at this time. ii) Equity
CPA cannot conclude that the development of new programs that allow for automated responses to marginal cost-based rates would materially address equity at this time. iii) Technological Feasibility
CPA at this time cannot assess the technological feasibility of incorporating MIDAS signals into our programs following the results of our pilot programs that are testing daily load shifting impacts.
iv) Benefits to the Grid and Customers
CPA at this time cannot assess the expected incremental costs and benefits associated with incorporating more dynamic price signals and/or allowing resources to be dispatched by MIDAS signals.
Chapter 5: Public Information Program
1) Public Information Program
a) Introduction to LMS Regulations in Providing Public Information Campaign Section 1623.1(a)(5) requires CCAs to conduct a public information campaign to inform and educate the affected customers why marginal cost-based rates or customer programs and automation are
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22 needed, how they will be used, and how they will save a customer money.57 Chapter 5 describes how CPA will comply with conducting a public informational campaign to inform and educate customers. b) CPA’s Current Communications Approach
CPA’s current communications strategy when phasing in new rate structures and/or customer programs include several approaches. These approaches include targeting customers already enrolled in CPA customer programs, targeted email and mailers, social media presence and awareness, informational webpages, fact sheets and explainer videos, providing CPA’s member agencies with educational toolkits and outreach to local business chambers. CPA also supports the phasing in of new rates structures and customer programs with a call center to assist with customer inquiries. c) CPA’s Current Outreach and Marketing
As mentioned above CPA utilizes several approaches to communicate new rate structures and/or customer programs. These approaches serve bilaterally to outreach and market new rates or customer programs. In addition, CPA has coordinated and leveraged past statewide educational campaigns, such as the rollout of TOU rates to outreach and market to customers. If such an option is available during the rollout of load flexibility standards, CPA will leverage the existing statewide educational campaigns. d) Plan for Conducting Public Information Program
In implementing the SCE Pilot, CPA will utilize SCE’s ME&O strategies that are funded through the SCE Pilot’s administrative costs, as approved in CPUC’s D.24-01-032. In addition, CPA will incorporate information about the SCE Pilot on its website and in relevant customer program materials, including details that educate customers on the benefits of marginal cost-based rates and customer programs, how they work, and how they can save the customer money. i) Public Information Program
In implementing the SCE Pilot, CPA will utilize SCE’s ME&O strategies that are funded through the SCE Pilot’s administrative costs, as approved in CPUC’s D.24-01-032. In addition, CPA will incorporate information about the SCE Pilot on its website and in relevant customer program materials, including details that educate customers on the benefits of marginal cost-based rates and customer programs, how they work, and how they can save the customer money. ii) Resource Commitment Plan to Design and Implement the Public Information Programs
57 Section 1623.1(a)(5)
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23 CPA will leverage SCE’s approved budget in the SCE Pilot to disseminate necessary information for SCE Pilot participation and enrollment.
Chapter 6: Summary of CPA’s Compliance Plan Approach
Below is a summary of the Revised Plan approach, which was approved by CPA’s Board on July 10, 2025, to meet the LMS Regulations.
1) CPA does not recommend adopting marginal cost-based rates at this time. CPA’s Board instead authorizes CPA to participate in the SCE Pilot until December 31, 2027 to gain insights into cost and benefits of marginal cost-based rates. .
2) CPA submitted to the CEC a list of load flexibility programs deemed cost-effective by CPA on October 1, 2024.
3) CPA will submit annual reports to the CEC demonstrating implementation of plan as required by Section 1623.1(a)(3)(C), as approved by CPA’s Board.
4) CPA’s participation in the SCE Pilot satisfies the requirement to submit at least one marginal cost-based rate to the Board of CPA for approval for any customer class(es) where such rate will materially reduce peak load as required by Section 1623.1(b)(2). 5) CPA will review the plan at least once every three years after the plan is adopted and submit a plan update to the Board of CPA if there is a material change as required by Section 1623.1(a)(1)(C).
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24 Appendix 1
Attachment: CPA’s Existing Rates Uploaded to MIDAS as of February 13, 2024. https://files.cleanpoweralliance.org/uploads/2024/02/CPA-Midas-Rates_2017-2018-vintage.pdf
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25 Appendix 2
Attachment: PDF file for CPA's rates in MIDAS.
https://files.cleanpoweralliance.org/uploads/2024/02/CPA_validation_20240111.pdf
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Staff Report – Agenda Item 3
To: Board of Directors
From: Lyon Hardgrave, Director, Energy Risk Management
Reviewed By: Matt Langer, Chief Operating Officer
Lindsay Descagnia, VP Power Supply
Nancy Whang, General Counsel
Approved By: Ted Bardacke, Chief Executive Officer
David McNeil, Chief Financial Officer
Subject: Energy Risk Management Policy (ERMP) Amendments Date: July 10, 2025
RECOMMENDATION
Adopt Resolution No. 25-07-091 (Attachment 1) to approve proposed ERMP amendments (Attachment 2).
On June 25, 2025, the Energy Resources and Planning Committee (“Energy Committee”) recommended approval of the proposed amendments, with administrative clarifications that have been incorporated. The Finance Committee reviewed and supported the proposed changes to the Minimum Energy Hedge Percentages at its June 25, 2025 meeting.
BACKGROUND
The ERMP governs the framework by which the Board, staff, and consultants conduct power procurement and related business activities for CPA. Nearly all Load Serving Entities have a similar governing document. CPA’s ERMP is based on industry best practices and includes a description of the major risks CPA faces and measures to mitigate those risks, acceptable business practices and authorized transaction types, segregation of duties and delegations of authority, counterparty credit risk management procedures, and CPA’s Energy Risk Hedging Strategy, which sets the minimum and
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Board of Directors Item 3
maximum energy product volumes CPA will procure to meet its mission, risk management objectives, and regulatory requirements.
An overarching goal of the ERMP and associated hedging strategy is to prudently manage CPA’s power supply costs so that it can offer stable and competitive customer rates within a dynamic commodity market. As such, the ERMP evolves as CPA develops further operational experience, its energy portfolio grows, additional risks emerge, and/or new market and regulatory conditions unfold.
The ERMP establishes a staff-level Risk Management Team1 (RMT). Pursuant to Section 8 of the ERMP, the Chief Executive Officer (CEO) in consultation with the RMT is required to review the ERMP and associated procedures on an annual basis to determine if they should be amended, supplemented, or updated to account for changing business conditions, regulatory requirements or to make other administrative revisions.2 If ERMP amendments are warranted, they are reviewed by the Energy Committee and submitted to the Board for approval.
Following extensive research by staff and consultation with the Board, the ERMP was adopted by the Board in July 2018. The Board subsequently approved amendments to the ERMP in July of 2019, 2020, 2021, 2022, 2023 and 2024 pursuant to the process described in Section 8.
This year’s proposed amendments to the ERMP appear as a redline to the current ERMP and are described herein. The proposed amendments reflect the recommendations of staff and incorporate refinements suggested by the Energy Committee to add definitions of Exigent Exclusivity Agreements and Trade Capture to the definitions section of the ERMP.
1 The RMT is currently comprised of the CEO, CFO, COO, and Vice President, Power Supply. It typically meets weekly.
2 https://cleanpoweralliance.org/wp-content/uploads/2019/07/071819_CPA-Board-AgendaPacket_web.pdf https://cleanpoweralliance.org/wp-content/uploads/2020/07/070920-CPA-Board-of-Directors-Agenda-Packet-.pdf https://cleanpoweralliance.org/wp-content/uploads/2021/06/07-01-21-CPA-Board-of-Directors-Agenda-Packet.pdf https://cleanpoweralliance.org/wp-content/uploads/2022/07/07-07-22-CPA-Board-of-Directors-Agenda-Packet.pdf
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Board of Directors Item 3
SUMMARY OF PROPOSED ERMP AMENDMENTS
Proposed amendments to the ERMP include the following:
1. Updates to Minimum and Maximum Energy Hedge Percentages a. Summary of proposed amendments
Amend Appendix B, Section 4.1.1 to:
• Reduce the minimum hedge percentages for the Prompt Quarter5 (PQ) to PQ+3. • Raise the maximum hedge percentages for quarters PQ+7 to PQ+9 to 90%. b. Discussion
The proposed reduction in minimum hedge requirements for the PQ through PQ+3 will provide CPA with the flexibility to further reduce energy hedging costs by reducing the use of standard energy market hedging products. This change is warranted due to reduced market price volatility arising from the increased use of energy storage resources across California and by an increase in dispatchable storage resources in CPA’s portfolio.
These changes are further supported by CPA’s improved financial strength and greater reserves which allow it to absorb short-term market shocks while preserving financial strength. Together, these changes support a more flexible and cost-effective approach to managing energy market risk.
5 Prompt Quarter means the quarter after the current quarter (i.e. on July 10, 2025, the Prompt Quarter is Q4 2025 and Prompt Quarter +1 is Q1 2026).
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Board of Directors Item 3
To complement its portfolio of long-term renewable energy and storage contracts, CPA uses standard energy market hedges. These hedges are commonly traded and represent the only viable complement to CPA’s long-term contracts. While standard energy market hedges reduce the risk of large losses during extreme market events, they are expensive and provide an imperfect match with CPA’s hourly price risk exposure. Standard energy market hedges provide a uniform quantity of energy over specific time periods, generally 7am to 10pm or overnight, weekends, and holidays. Due to high daytime rooftop solar production and higher residential energy consumption in the evenings, during certain periods CPA has excess energy during the day and a shortage of energy during the evening. Purchasing the 7am-10pm product reduces CPA’s price risk exposure during the evening but increases price risk exposure during the day. The cost of industry standard hedges includes administrative charges and profits charged by energy hedge suppliers, typically banks and large energy trading companies.
CPA’s growing fleet of energy storage resources allows it to dispatch energy in the most expensive hour of the day, serving a role similar to that played by standard block hedges but without the added cost and risk of procuring energy during daytime hours when it is not needed. Further, the expanding fleet of batteries across the CAISO system is helping to flatten net load curves (electricity demand net of battery discharging) and prices during the evening peak period. Historically, during the evening peak the most expensive generators (and often the dirtiest) would dispatch electricity to the grid and set the price at levels many times those observed during the day. With the advent of grid scale battery storage, the legacy high marginal cost resources are being used less, which in turn is moderating the severity of daily and seasonal peak pricing events. The flattening of the price curve reduces CPA’s spot market price risk exposure. Battery storage resources, which can charge during the day when prices are low and dispatch electricity in the most expensive hours of the day, can in some cases replace standard energy hedges providing a better and lower cost hedging alternative to standard hedging products.
CPA’s updated modeling confirms these developments. Pursuant to the ERMP, CPA uses a multivariate regression model to analyze energy market risk. This model shows a
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Board of Directors Item 3
drop in the severity of worst-case projections at the proposed minimum hedge percentage and corroborates widely observed evidence that battery storage is helping to reduce price volatility risk.
CPA’s ability to absorb short term market volatility in worst case scenarios is enhanced by CPA’s Reserve levels which have improved substantially over the past several years.
This enhanced financial strength allows CPA to safely lower minimum hedge percentages and reduce costs without compromising fiscal stability. Staff recommend maintaining current energy hedge maximum percentages (except in PQ+7, PQ+8 and PQ+9 where increases are proposed) to preserve flexibility in the event of changing market conditions.
In July 2024, the Board approved amendments to the ERMP that increased the Maximum Hedge % in the second quarter of PQ10-39 to 90%. Energy consumption tends to be at the lowest level of the year during this quarter while solar production is high. Increasing the Maximum Hedge % in this quarter supports CPA’s long-term renewable energy procurement strategy. The proposed increase in the Maximum Hedge % for PQ+7 to PQ+9 eliminates potential policy deviations caused when longer-dated Q2 positions, which have a maximum hedge level of 90%, roll forward into these quarters. Without a change, the drop in the maximum limit from 90% to 78%, for example, would trigger a policy deviation or force unwarranted energy sales to stay under the reduced limit.
Aligning the limits with those already in place for PQ+10 and beyond enables smoother portfolio management.
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Board of Directors Item 3
2. Updates to Resource Adequacy (RA) Maximum Hedge Limits and Clarifying Counting of Storage in RA Positions
a. Summary of proposed amendments
Amend Appendix B, Section 4.1.4 of the ERMP to:
i. Raise the Maximum Hedge Percentage for Resource Adequacy (RA) in Prompt Year (PY) +3 and PY+4.
ii. Clarify how standalone storage resources are counted toward hedge compliance, distinguishing between the PY and future years. iii. Remove reference to a Southern California South-of-Path 26 Flexible RA which is no longer a compliance requirement
b. Discussion
i. RA markets have become more volatile in recent years, driven by scarcity due to the retirement of gas plants and restrictions on imports. This volatility has been compounded by the implementation of an entirely new RA framework, called “Slice of Day” that requires CPA to meet load obligations in twenty-four hours each month, rather than only the peak hour. One way to mitigate volatility and market uncertainty is by procuring more capacity further in advance to limit CPA’s exposure to short-term RA price spikes. The current maximum hedge limits for PY+3 and PY+4 limit CPA’s ability to prudently procure RA earlier for these time periods and take advantage of favorable market conditions.
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Board of Directors Item 3
When cost-effective RA opportunities arise — due to bilateral deal flow or compelling PPAs — the existing policy thresholds prevent additional procurement without triggering policy deviations. Raising the maximum RA hedge limits for these tenors ensures the ERMP supports prudent long-term procurement and allows CPA to take advantage of commercial opportunities without compromising transparency or oversight.
ii. The amendment adds new language clarifying how standalone energy storage is treated for hedge compliance purposes.
Under CPUC RA Program rules, energy storage resources must be paired with an equivalent value of surplus RA during charging hours to count toward RA requirements. CPA has secured numerous long-term storage contracts, but in
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Board of Directors Item 3
some forward years, surplus RA for charging has not yet been fully contracted.
The existing ERMP does not specify how to treat this case.
The amended language establishes a two-tiered approach:
• In the Prompt Year (PY), storage may only count toward hedge compliance if surplus contracted RA is available during charging hours. • In PY+1 and beyond, storage may be counted toward hedge compliance even if surplus charging RA has not yet been secured.
This approach reflects practical procurement timelines and avoids understating CPA’s hedge coverage in out-years due to timing gaps. It allows for a realistic view of forward positions while preserving rigor in the near term. iii. The amendment removes outdated language concerning Southern California South-of-Path 26 Flexible RA which is no longer a requirement under the CPUC’s RA Program. Its removal ensures that the ERMP reflects current regulatory requirements and reduces potential confusion.
Together, these updates improve policy clarity, enhance procurement flexibility, and ensure CPA’s hedge reporting more accurately reflects its actual RA risk profile
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Board of Directors Item 3
3. Reduction in Carbon Free Energy Minimum Hedge Requirement a. Summary of proposed amendments
Amend Appendix B, Section 4.1.3 to remove the minimum hedge requirement for Carbon Free Energy in PY+2.
b. Discussion
Uncertainty surrounding future carbon-free energy needs and evolving regulatory guidance make long-term hedging targets difficult to determine, particularly as CPA’s Lean and Clean Power rate products embed more flexibility between renewable energy and Carbon Free Energy. Removing the minimum hedge requirement for PY+2 provides CPA flexibility to adapt to evolving policy and procurement needs.
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Board of Directors Item 3
4. Clarifying Authority for Exclusivity Agreements
a. Summary of proposed amendments
Amend Section 5.1.3 to explicitly authorize staff to execute Exclusivity Agreements after the Energy Committee approves a project for contract negotiations. It also authorizes staff to enter into an “Exigent Exclusivity Agreement” prior to the Energy Committee’s contract negotiations due to exigent circumstances, such as fast-track negotiations. As amended, Section 5.1.3 requires staff to bring a project subject to an Exigent Exclusivity Agreement to the Energy Committee for contract negotiations approval within 90 days.
b. Discussion
The current ERMP does not explicitly define staff authority to enter into exclusivity agreements when delays can result in missed opportunities to secure strategic project opportunities that require swift engagement. This gap in policy is especially limiting in time-sensitive or fast-track negotiations, where delays in securing exclusivity can jeopardize CPA’s ability to compete for resources.
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Board of Directors Item 3
The proposed amendment formally authorizes staff to enter into Exigent Exclusivity Agreements (as defined in Appendix A to the ERMP) for up to 90 days, enabling CPA to respond during accelerated negotiations. These agreements are binding upon a proposer, in effect preventing thme from negotiating the same project with another party during the term. They do not create a financial obligation on CPA and serve as an important tool in early-stage deal development and due diligence.
To preserve transparency and oversight, any project subject to an Exigent Exclusivity Agreement must be brought to the Energy Committee for approval prior to the conclusion of the exclusivity period to conclude contract negotiations. This approach allows staff to act quickly while maintaining appropriate oversight before concluding contract negotiations.
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Board of Directors Item 3
Addition of Trade Capture and Quality Assurance
a. Summary of proposed amendments
Add new subsection 3.11 requiring the development and implementation of trade capture and quality assurance procedures shown in redline below. As defined in the ERMP, the System of Record is an “information storage system that is the authoritative data source for a given data element or piece of information” as is used to capture CPA’s energy contract and trade data. “Trade Capture,” defined in Appendix A to the ERMP, refers to the process of updating the System of Record with new contract data.
b. Discussion
CPA has implemented internal controls to ensure that all transactions are accurately entered into the System of Record and independently confirmed. Formalizing these expectations in the ERMP improves transparency and internal consistency and reinforces operational risk management practices.
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Board of Directors Item 3
ERMP Acknowledgements
The ERMP requires CPA representatives, including the Board, participating in any activity or transaction within the scope of the ERMP to sign, on an annual basis or upon any revision, an acknowledgment of their responsibilities, duties, obligations, and compliance under the ERMP. In tandem with the amendment to the ERMP, staff will be asking the Board to complete their annual acknowledgment forms in July, which will be emailed to the Directors in a subsequent communication from the Clerk of the Board.
ATTACHMENTS
1. Resolution No. 25-07-091
2. Proposed ERMP Amendments (redline)
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RESO NO. 25-07-091
RESOLUTION NO. 25-07-091
RESOLUTION OF THE BOARD OF DIRECTORS OF CLEAN
POWER ALLIANCE OF SOUTHERN CALIFORNIA
ADOPTING AND APPROVING THE AMENDED ENERGY
RISK MANAGEMENT POLICY
THE BOARD OF DIRECTORS OF CLEAN POWER ALLIANCE OF SOUTHERN CALIFORNIA HEREBY RESOLVES AS FOLLOWS:
WHEREAS, Clean Power Alliance of Southern California (formerly known as Los Angeles Community Choice Energy Authority) (“Clean Power Alliance” or “CPA”) was formed on June 27, 2017;
WHEREAS, on April 5, 2018, the CPA Board of Directors (“Board”) adopted Resolution 18-005 delegating authority to the Executive Director for certain activities related to power procurement;
WHEREAS, on July 12, 2018, the Board adopted Resolution 18-006 approving the Energy Risk Management Policy ("ERMP") which establishes a framework by which the Board, staff, and consultants conduct power procurement and related business activities that may impact the risk profile of CPA;
WHEREAS, the ERMP specifies that CPA will review the policy on an annual basis in order to determine if the ERMP should be amended, supplemented, or updated to account for changing business conditions and/or regulatory requirements; WHEREAS, since July 12, 2018, the Board has approved amendments to the ERMP on an annual basis to account for changing business or regulatory conditions as well as administrative adjustments; and,
WHEREAS, CPA has considered the prevailing business conditions and regulatory environment and determined that refinements or updates to certain functions or activities are necessary or beneficial.
NOW, THEREFORE, BE IT DETERMINED, AFFIRMED, AND ORDERED BY
THE BOARD OF DIRECTORS OF THE CLEAN POWER ALLIANCE OF SOUTHERN CALIFORNIA that the attached ERMP, presented as Exhibit A, as amended therein, is hereby approved as of July 10, 2025;
IT IS FURTHER DETERMINED, AFFIRMED, AND ORDERED, any power procurement activity that falls outside the parameters of the ERMP, as amended herein, shall be brought to the Board for consideration;
IT IS FURTHER DETERMINED, AFFIRMED, AND ORDERED that any and all acts authorized pursuant to this Resolution and performed prior to the passage of this Resolution are hereby ratified and approved;
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RESO NO. 25-07-091
IT IS FURTHER DETERMINED, AFFIRMED, AND ORDERED that this Resolution shall be continuing and remain in full force and effect; and, IT IS FURTHER DETERMINED, AFFIRMED, AND ORDERED that the approval of the ERMP is not a “project” under Section 21065 of the Public Resources Code and under California Environmental Quality Act (“CEQA”) Guidelines Sections 15378(a) and is exempt under CEQA Guidelines Section 15061(b)(3).
ADOPTED AND APPROVED this 10th day of July 2025.
____________________________
Deborah Klein Lopez, Chair
ATTEST:
_________________________
Gabriela Monzon, Secretary
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RESO NO. 25-07-091
EXHIBIT A
ENERGY RISK MANAGEMENT POLICY
(see attached)
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Energy Risk
Management Policy
July 110,
20254
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1 Table of Contents
Section 1: ENERGY RISK MANAGEMENT POLICY OVERVIEW .............................................................................. 4
1.1 Background and Purpose .......................................................................................................................... 4
1.2 Scope ......................................................................................................................................................... 5
1.3 Energy Risk Management Objective ......................................................................................................... 5
1.4 ERMP Administration ................................................................................................................................ 6 Section 2: GOALS AND RISK EXPOSURES ............................................................................................................ 7
2.1 ERMP Goals ............................................................................................................................................... 7
2.2 Risk Exposures ........................................................................................................................................... 7
2.2.1 Customer Opt-Out Risk ...................................................................................................................... 8
2.2.2 Market Risk ........................................................................................................................................ 8
2.2.3 Regulatory and Legislative Risk .......................................................................................................... 9
2.2.4 Volumetric Risk .................................................................................................................................. 9
2.2.5 Model Risk .......................................................................................................................................... 9
2.2.6 Operational Risk ............................................................................................................................... 10
2.2.7 Counterparty Credit Risk .................................................................................................................. 10
2.2.8 Reputation Risk ................................................................................................................................ 10 Section 3: BUSINESS PRACTICES ....................................................................................................................... 11
3.1 General Conduct ..................................................................................................................................... 11
3.2 Trading for Personal Accounts ................................................................................................................ 11
3.3 Adherence to Statutory Requirements ................................................................................................... 11
3.4 Transaction Type ..................................................................................................................................... 12
3.4.1 Exceptions ........................................................................................................................................ 12
3.5 Counterparty Suitability .......................................................................................................................... 13
3.6 System of Record .................................................................................................................................... 13
3.7 Transaction Valuation ............................................................................................................................. 13
3.8 Stress Testing .......................................................................................................................................... 14
3.9 Trading Practices ..................................................................................................................................... 14
3.10 Training ............................................................................................................................................ 15 Agenda Page 61
2 Section 4: ORGANIZATIONAL STRUCTURE AND RESPONSIBILITIES .................................................................. 16
4.1 Board of Directors Responsibilities ......................................................................................................... 16
4.2 Risk Management Team ......................................................................................................................... 16
4.3 Segregation of Duties .............................................................................................................................. 17
4.3.1 Front Office ...................................................................................................................................... 17
4.3.2 Middle Office .................................................................................................................................... 18
4.3.3 Back Office ....................................................................................................................................... 18 Section 5: DELEGATION OF AUTHORITY ........................................................................................................... 20
5.1 Risk Limits................................................................................................................................................ 20
5.1.2 Delegation Authority ........................................................................................................................ 20
5.1.3 Long-Term Procurement .................................................................................................................. 20
5.1.4 Volume Limits .................................................................................................................................. 22
5.1.5 Locational Limits .............................................................................................................................. 22
5.1.6 CAISO Submission Limits .................................................................................................................. 22
5.2 Monitoring, Reporting and Instances of Exceeding Risk Limits .............................................................. 22 Section 6: CREDIT POLICY AND COUNTERPARTY SUITABILITY .......................................................................... 23
6.1 Master Enabling Agreements and Confirmations ................................................................................... 23
6.1.1 Exceptions ........................................................................................................................................ 23
6.2 Counterparty Suitability .......................................................................................................................... 23
6.3 Maximum Credit Limit ............................................................................................................................ 24
6.4 Credit Review Exceptions ........................................................................................................................ 24
6.5 Credit Limit and Monitoring .................................................................................................................... 24
6.6 CPA Credit Support ................................................................................................................................. 25 Section 7: POSITION TRACKING AND MANAGEMENT REPORTING .................................................................. 25 Section 8: ERMP REVISION PROCESS ................................................................................................................ 26
8.1 Acknowledgement of ERMP ................................................................................................................... 26
8.2 ERMP Interpretations ............................................................................................................................. 26 Appendix A: DEFINITIONS ................................................................................................................................ 27 Appendix B: ENERGY RISK HEDGING STRATEGY ............................................................................................... 30 Agenda Page 62
3 1.1 Introduction ............................................................................................................................................ 30
2.1 Governance ............................................................................................................................................. 30
3.1 Hedging Program Goals .......................................................................................................................... 30
4.1 Hedging Targets and Strategies .............................................................................................................. 31
5.1 Hedge Program Metrics .......................................................................................................................... 36
6.1 Reporting Requirements ......................................................................................................................... 36 Appendix C: AUTHORIZED TRANSACTION TYPES .............................................................................................. 37 Appendix D: NEW TRANSACTION TYPE APPROVAL FORM ............................................................................... 39 Appendix E: NOTICE OF CONFLICT OF INTEREST .............................................................................................. 40 Appendix F: CODE OF MARKETING AND TRADING PRACTICES ........................................................................ 41 See next page. ........................................................................................................................................... 41 Agenda Page 63
4 Section 1: ENERGY RISK MANAGEMENT POLICY OVERVIEW
1.1 Background and Purpose
The Clean Power Alliance of Southern California (CPA) is a Joint Powers Authority (JPA) administering a Community Choice Aggregation (CCA) program in Southern California. CPA service territory currently includes 352 jurisdictions – 330 cities and the unincorporated parts of Los Angeles and Ventura Counties.
CPA members presently include the following:
Counties:
Los Angeles
Ventura
Cities:
CPA Service will expand to three additional communities - La Cañada Flintridge, Lynwood, and Port Hueneme – in October, 2025.
CCA, authorized in California under AB 117 and SB 790, allows local governments, including counties and cities, to purchase wholesale power supplies for resale to their residents and businesses as an alternative to electricity provided by an Investor Owned Utility (IOU). For CPA members, that IOU is Southern Agoura Hills Hawthorne Santa Monica
Alhambra Hermosa Beach Santa Paula
Arcadia Manhattan Beach Sierra Madre
Beverly Hills Malibu Simi Valley
Calabasas Monrovia South Pasadena
Camarillo Moorpark Temple City
Carson Ojai Thousand Oaks
Claremont Oxnard Ventura
Culver City Paramount West Hollywood
Downey Redondo Beach Westlake Village
Hawaiian Gardens Rolling Hills Estates Whittier
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5 California Edison (SCE). Electricity procured by CPA to serve customers is delivered over SCE’s transmission and distribution system.
CPA exists to serve its local government members, and the residences and businesses located within their respective communities. CPA’s specific objectives are to provide its customers with a reliable supply of electricity, at competitive electric rates, sourced from a generation portfolio with lower greenhouse gas (GHG) emissions and higher renewable content than the incumbent utility, SCE. CPA also has goals to be a catalyst for local economic development and give its member agencies greater choice in the energy procured for their residents.
To meet these commitments, CPA must procure electric power supplies and operate in the wholesale energy market which exposes CPA, and ultimately the customers that it serves, to various risks. The intent of the Energy Risk Management Policy (ERMP) is to provide CPA, and by extension its customers, with a framework to identify, monitor and manage risks associated with procuring power supplies and operating in wholesale energy markets.
The Energy Risk Management Policy (ERMP), including its appendices, establishes CPA’s Energy Risk Program.
1.2 Scope
Unless otherwise explicitly stated in the ERMP or other policies approved by the CPA Board of Directors (Board), the ERMP applies to all power procurement and related business activities that may impact the risk profile of CPA. The ERMP documents the framework by which CPA staff and consultants will:
Identify and quantify risk
Develop and execute procurement strategies
Develop controls and oversight
Monitor, measure and report on the effectiveness of the ERMP To ensure its successful operation, CPA has partnered with experienced consultants to provide power supply services. Specific to power procurement, CPA has partnered with a third-party Scheduling Coordinator that augments CPA’s internal Front (scheduling), Middle (monitoring) and Back (settlement) Office related activities as discussed at Section 4.3. The Scheduling Coordinator supporting CPA’s power procurement activities will adhere to and be governed by the ERMP in providing these services to CPA. In addition, the Scheduling Coordinator’s activities executed on CPA’s behalf will be governed by its own risk management policies and procedures, and prudent industry practices.
1.3 Energy Risk Management Objective
The objective of the ERMP is to provide a framework for conducting procurement activities that maximize the probability of CPA meeting the goals listed in Section 2.1.
Pursuant to the ERMP, CPA will identify and measure the magnitude of the risks to which it is exposed and that contribute to the potential for not meeting identified goals.
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6 1.4 ERMP Administration
The ERMP has been reviewed and approved by the Board. The Chief Executive Officer in consultation with the Risk Management Team (collectively, the “RMT”), as defined in Section 4.2, and the Board must approve amendments to the ERMP, except for appendices D, E, and F, which may be amended with approval of the Chief Executive Officer, in consultation with the RMT. The Chief Executive Officer must give notice to the Board of any amendment it makes to an appendix or a reference policy or procedure document.
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7 Section 2: GOALS AND RISK EXPOSURES
2.1 ERMP Goals
To help ensure its long-term success, CPA has outlined the following goals:
Build a portfolio of resources with lower GHG emissions and higher renewable content than SCE; Meet reliability requirements established by the State of California, and operate in a manner consistent with Prudent Utility Practice (defined as the practices generally accepted in the utility industry to ensure safe, reliable, compliant and expeditious operations); Maintain competitive retail rates with SCE after adjusting for exit fees (currently the Power Charge Indifference Adjustment or PCIA) and Franchise Fees paid by CPA customers; Emphasize during the initial years of operation the funding of financial reserves to meet the following long-term business objectives:
o Stabilize rates by dampening year-to-year variability in power supply costs; o Maintain an investment-grade credit rating to maximize the ability of CPA to engage in long-term acquisition or development of generation supplies consistent with ERMP goals; and
o Provide a source of equity capital for investment in generation.
The goals outlined above are incorporated into the financial models and metrics that are used to monitor and measure risk and ERMP success. It is important to note that the goals listed above are not intended to be a comprehensive list of goals for CPA. Rather, the above reflect the overarching goals critical to CPA’s long-term financial success and that will guide the ERMP.
2.2 Risk Exposures
For the purpose of the ERMP, risk exposure is assessed on all transactions (energy, environmental attributes, and capacity) as well as the risk exposure of open positions and the impacts of these uncertainties on CPA’s load obligations.
CPA faces a range of risks during launch and ongoing operation including:
Customer opt-out risk
Market risk
Regulatory risk
Volumetric risk
Model risk
Operational risk
Counterparty credit risk
Reputation risk
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8 2.2.1 Customer Opt‐Out Risk
Customer opt-out risk may be realized by any condition or event that creates uncertainty within, or a diminution of, CPA’s customer base. Customer opt-out risk is manifested in two separate ways.
First, the ability of customers to return to bundled service from SCE creates uncertainty in CPA’s revenue stream, which is critical for funding ERMP goals and achieving the investment grade credit rating needed to successfully operate over the long-term.
Second, customer opt-out risk can potentially challenge the ability of CPA to prudently plan for, and cost-effectively implement, long-term resource commitments made on behalf of its member communities and the customers it serves.
CPA will manage customer opt-out risk through the following means:
Implement a key accounts program and maintain strong relationships with the local community including elected leaders, stakeholders and all of the customers CPA serves; Actively monitor and advocate for the interests of CPA and its customers in SCE ratemaking proceedings, California Public Utilities Commission (CPUC) proceedings that potentially affect exit fees paid by CPA customers, as well as all regulatory and legislative proceedings where an adverse outcome may challenge the ability of CPA to deliver on customer commitments; Regularly monitor and report actual and projected financial results including probability-based and stress-tested financial results assuming a range of possible future outcomes with respect to:
o Future SCE generation and PCIA rates;
o Future market costs for energy, environmental attributes and capacity; and o Anticipated or threatened regulatory actions, when appropriate. Adopt, implement and update, as needed, a formal Energy Risk Hedging Strategy (Appendix B) describing the strategy that CPA will follow for engaging in procurement activities; and Evaluate expansion of CPA’s customers base through incorporation of other eligible communities into the CCA.
2.2.2 Market Risk
Market risk is the uncertainty of CPA’s financial performance due to variable commodity market prices (market price risk) and uncertain price relationships (basis risk). Variability in market prices creates uncertainty in CPA’s procurement costs, which has a direct impact on customer rates. CPA will manage market risk through:
Regular measurement;
Execution of approved procurement;
Hedging and Congestion Revenue Right strategies; and
Use of the Limit Structure set forth in the ERMP (see limits in Section 5.1.2 and Appendix B).
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9 2.2.3 Regulatory and Legislative Risk
CPA and other CCAs are subject to an evolving legal and regulatory landscape. Additionally, CCAs are in direct competition with California’s IOUs in supplying retail electricity and the IOUs face the risk of stranded investments in generating assets and power purchase agreements procured in the past to serve now departing CCA loads. The manner in which such stranded costs of these legacy power supplies are allocated to departing CCA loads is subject to change based on various proceedings at the CPUC. The outcome of such proceedings will directly affect the cost of power for CPA’s customers, as well as impact the rate competitiveness of CPA.
In addition to exit fees, potential regulatory and/or legislative changes could affect the ability of CPA to exercise local control over the manner and means of procuring power supplies to serve its customers.
CPA will manage regulatory and legislative risks by:
• Regularly monitor and analyze legislative and regulatory proceedings impacting CCAs; and Actively participate in, and advocate for, the interests of CPA and its customers during regulatory and legislative proceedings.
2.2.4 Volumetric Risk
Volumetric risk reflects the potential uncertainty in the quantity of different power supply products (e.g., renewable energy, Carbon Free Energy and capacity) required to meet the needs of CPA customers. This uncertainty can lead to adverse financial outcomes, as well as create potential for CPA to fail to meet reliability or renewable energy compliance requirements established by the State of California and/or the CPA Board. Customer load is subject to fluctuation due to customer opt-outs or departures, temperature deviation from normal, unforeseen changes in the growth of behind the meter generation by CPA customers, unanticipated energy efficiency gains, new or improved technologies, as well as local, state and national economic conditions. CPA will manage volumetric risk by taking steps to:
Implement robust short- and long-term load and generation supply forecast methodologies, including regular monitoring of forecast accuracy through time and refining such forecasts, including by incorporating CPA’s actual load data into forecasts as such data becomes available; Account for volumetric uncertainty in load and/or generation supply in in the Energy Risk Hedging Strategy;
Monitor trends in customer onsite generation, economic shifts, and other factors that affect electricity customer consumption and composition; and
Proactively engage with customers in developing distributed energy resources and behind-the-meter generation and energy efficiency programs so as to better forecast changes in load.
2.2.5 Model Risk
Model risk has potential for an inaccurate or incomplete representation of CPA’s actual or forecast financial performance due to deficiencies in models and/or information systems used to capture all transactions. CPA will manage model risk by:
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10 RMT ratification of models used to forecast financial performance, net positions and/or measure risk;
Ongoing review of model outputs;
A requirement to record all procurement transactions in a single tTrade cCapture system; and Ongoing update and improvement of models as additional information and expertise is acquired and industry best practices evolve.
2.2.6 Operational Risk
Operational risk is the uncertainty of CPA’s financial performance due to weaknesses in the quality, scope, content, or execution of human resources, technical resources, and/or operating procedures within CPA.
Operational risk can also be exacerbated by fraudulent actions by employees or third parties or inadequate or ineffective controls. CPA will manage operational risk through:
The controls set forth in the ERMP;
RMT oversight of procurement activity;
Timely and effective reporting to the Chief Executive Officer in consultation with the RMT, and the Board;
Implementation of a compliance training program for CPA staff; Ongoing CPA and Scheduling Coordinator staff education/training and participation in industry forums; and
Annual audits to test compliance with the ERMP.
2.2.7 Counterparty Credit Risk
Counterparty credit risk is the potential that a counterparty will fail to perform or meet its obligations in accordance with terms agreed to under contract. CPA’s exposure to counterparty credit risk is controlled by the limit controls set forth in the Credit Policy described in Section 6.
2.2.8 Reputation Risk
Reputation risk is the potential that CPA’s reputation is harmed, causing customers to opt-out of CPA service and migrate back to SCE. Reputational risk is also the potential that energy market participants view CPA as an untrustworthy business partner, thus reducing the pool of potential counterparties and/or having counterparties apply a CPA-specific risk premium to pricing. Reputational risk is managed through:
Implementation of and adherence to the ERMP;
Engaging in ethical, transparent and honest business practices during trading activities; and Establishment and adherence to industry best practices including both those adopted by other CCAs, as well as those adopted by traditional municipal electric utilities.
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11 Section 3: BUSINESS PRACTICES
3.1 General Conduct
It is the policy of CPA that all Board members, staff, and consultants (collectively referred to “CPA Representatives”), adhere to standards of integrity, ethics, conflicts of interest, compliance with statutory law and regulations and other applicable CPA standards of personal conduct while employed by or affiliated with CPA. Towards this end, all persons performing marketing and trading functions on behalf of CPA shall be subject to, read, understand, and abide by the provisions contained in the CPA Code of Marketing and Trading Practices (see Appendix F).
3.2 Trading for Personal Accounts
All CPA Representatives participating in any transaction or activity within the coverage of the ERMP are required to comply with the CPA Conflict of Interest Code approved by the Fair Political Practices Commission and are obligated to give notice in writing to CPA of any legal, financial or personal interest such person has in any counterparty that seeks to do business with CPA, and to identify any real or potential conflict of interest such person has or may have with regard to any existing or potential contract or transaction with CPA, within 48-hours of becoming aware of the conflict of interest. Written notice should be submitted to the Chief Executive Officer substantially in the form of the letter notification shown in Appendix E. This written notice obligation shall be in addition to the regulations or requirements of the Fair Political Practices Commission (e.g., Statement of Economic Interests, Form 700) and any policy adopted by the CPA Board of Directors, including but not limited to the Vendor Communication Policy No. 2019-10.
Further, all persons are prohibited from personally participating in any transaction or similar activity that is within the coverage of the ERMP, or prohibited by California Government Code Section 1090, and that is directly or indirectly related to the trading of electricity and/or environmental attributes as a commodity.
If there is any doubt as to whether a prohibited condition exists, then it is the CPA Representative’s responsibility to discuss the possible prohibited condition with CPA General Counsel.
3.3 Adherence to Statutory Requirements
All CPA Representatives are required to comply with rules promulgated by the State of California, CPUC, California Energy Commission, Federal Energy Regulatory Commission (FERC), Commodity Futures Trading Commission (CFTC), and other regulatory agencies.
Congress, FERC and CFTC have enacted laws and regulations that prohibit, among other things, any action or course of conduct that actually or potentially operates as a fraud or deceit upon any person in connection with the purchase or sale of electric energy or transmission services. These laws also prohibit any person or entity from making any untrue statement of fact or omitting a material fact where the omission would make a statement misleading. Violation of these laws can lead to both civil and criminal actions against the individual involved, as well as CPA. The ERMP is intended to comply with these laws, regulations and rules and to avoid improper conduct on the part of anyone employed by CPA. These procedures may be modified from time to time based on legal requirements, auditor recommendations, Agenda Page 71
12 and other considerations.
In the event of an investigation or inquiry by a regulatory agency, CPA will provide legal counsel to employees provided the subject of the investigation is within the employee’s course and scope of employment. However, CPA reserves the right to refrain from providing legal counsel if it reasonably appears to the CPA General Counsel and Chief Executive Officer that the employee was either not acting in good faith or was acting outside the course and scope of his or her employment.
CPA employees are prohibited from working for another power supplier, CCA or utility while they are simultaneously employed by CPA unless an exception is authorized by the Board.
3.4 Transaction Type
Authorized transaction types are listed in Appendix C. Each approved transaction type that is listed is included to either meet a mandatory procurement obligation required of all Load Serving Entities (LSE) serving retail loads in California; and/or alternatively, the approved product is needed for CPA to meet an identified ERMP goal. Major transaction types include:
Resource Adequacy Capacity is a mandatory procurement obligation that ensures adequate generation supplies are available on a planning basis to reliably meet the requirements of electric consumers in the California Independent System Operator (CAISO) balance authority; Portfolio Content Category 1 (PCC1) and Portfolio Content Category 2 (PCC2) renewable energy must be procured by CPA to comply with the state of California’s Renewable Portfolio Standard, as required by SB 350. CPA has made a voluntary decision to purchase incremental quantities of PCC1 and/or PCC2 renewable energy to exceed the renewable portfolio content of the incumbent utility;
Carbon Free Energy is a voluntary purchase of specified source energy from large hydroelectric generation than enables CPA to provide its customers with electricity sourced from generators producing low GHG emissions so that member agencies can meet their climate action plans and CPA can contribute to combatting climate change;
Physical Energy products are a voluntary purchase made by CPA to provide cost certainty and rate stability for customers; and
The CAISO is the largest grid operator in the state of California and CPA members lie within its balancing area. CAISO operates Day-Ahead, Fifteen Minute and Real-Time Markets and other ancillary markets necessary for reliable operation of the grid. CPA is required to participate in CAISO markets. Acquisition of the CAISO products listed in Appendix C either result from mandatory participation in CAISO’s markets, or are useful for managing short-term market risks associated with CAISO’s markets.
The strategy for using and procuring the approved products is described in further detail in the Energy Risk Hedging Strategy.
3.4.1 Exceptions
New transaction types may provide CPA with additional flexibility and opportunity but may also introduce new risks. Therefore, transaction types not included in Appendix C must be approved by the RMT and the Agenda Page 72
13 Board prior to execution using the process defined below.
When seeking approval for a new transaction type, a New Transaction Type Approval Form, as shown in Appendix D, is to be drafted describing all significant elements of the proposed transaction. The proposal write-up will, at a minimum, include:
A description of the benefit to CPA, including the purpose, function and expected impact on costs (i.e.; decrease costs, manage volatility, control variances, etc.); Identification of the in-house and/or external expertise that will manage and support the new or non-standard transaction type;
Assessment of the transaction’s risks, including any material legal, tax or regulatory issues; How the exposures to the risks above will be managed by the Limit Structure; Proposed valuation methodology (including pricing model, where appropriate); Proposed reporting requirements, including any changes to existing procedures and system requirements necessary to support the new transaction type; Proposed accounting methodology; and
Proposed work flows/methodology (including systems).
It is the responsibility of the Middle Office to ensure that relevant departments have reviewed the proposed transaction type and that material issues are resolved prior to submittal to the Board for approval. If the transaction type is approved, Appendix C to the ERMP will be updated to reflect its addition.
3.5 Counterparty Suitability
All counterparties with whom CPA transacts must be reviewed for creditworthiness and assigned a Credit Limit as described in Section 6.
3.6 System of Record
Since information systems play a vital role for CPA’s trading and risk management abilities, CPA shall maintain and secure a System of Record. CPA’s transaction and contract data are also stored in its Scheduling Coordinator’s energy trading and risk management system.
CPA’s Technology and Data and Systems group supports the security, integrity, and recoverability of the System of Record. The Scheduling Coordinator has assigned a Database Administrator (DBA) that is charged with database security and maintenance for the Scheduling Coordinator’s transaction database.
For data recoverability, transaction data stored in the System of Record is replicated daily to ensure data redundancy and is backed-up via cloud-based applications.
All transaction records will be maintained in US dollars and will be separately recorded and categorized by type of transaction and other characteristics, in line with standard industry practice. This System of Record shall be auditable and audited as appropriate.
3.7 Transaction Valuation
Transaction valuation and mark-to-market (valuing of an asset based on its current market price) reporting of positions shall be based on independent, publicly available, market-observed prices (replacement costs) Agenda Page 73
14 whenever possible. In the event there are not market-observed prices, the value of CPA’s transactions shall follow a notional value calculation (the total nominal dollar value of a transaction over its full duration) or other methodology approved as part of the new product approval process.
All transactions and open positions will be valued daily.
3.8 Stress Testing
In addition to limiting and measuring risk using the methods described herein, stress testing shall also be used to examine performance of the CPA portfolio under potential adverse conditions. Stress testing is used to understand the potential variability in CPA’s projected procurement costs and resulting impacts on customer rates and CPA’s competitive positioning associated with low probability events. The Middle Office will perform stress-testing of the portfolio as directed by the RMT.
3.9 Trading Practices
As previously noted, CPA exists to serve its customers. The scope of its wholesale market operations is limited to that which is required to meet the power supply obligations of its customers consistent with ERMP goals. It is the expressed intent of the ERMP to prohibit wholesale market activities that result in procurement of any power supply product beyond that which is required to meet an identifiable need of CPA customers. The purchase or sale of any power supply product beyond what is reasonably anticipated to be needed to meet the requirements of CPA customers is a speculative transaction and is prohibited.
In the course of developing operating plans and conducting procurement activities, CPA recognizes that staff must employ reasonable expertise and judgment, and it is not the intent of the ERMP to restrain the legitimate application of analysis and market expertise in executing procurement strategies intended to minimize costs or maximize the value of generation within the constraints of the ERMP. If any questions arise as to whether a proposed transaction(s) constitutes speculation, the RMT shall review the transaction(s) to determine whether the transaction(s) would constitute speculation and shall document its findings. As used here, “speculation” means the act of trading an asset with the expectation of realizing financial gain resulting from a change in price in the asset being transacted.
Staff and consultants engaged in procurement activities will also observe the following practices:
Persons shall conduct business in good faith and in accordance with all applicable laws, regulations, tariffs and rules;
Persons shall not arrange or execute wash trades (i.e., offsetting transactions where no financial risk is taken);
Persons shall not disseminate known false or misleading information or engage in transactions to exploit such information;
Persons shall not game or otherwise interfere with the operation of a well-functioning competitive market;
Persons shall not collude with other market participants; and Persons shall immediately report any known or suspected violation of the ERMP.
Agenda Page 74
15 3.10 Training
CPA recognizes the importance of ongoing education to manage risk and to contribute to ERMP success.
Towards this end, CPA will observe the following practices:
All employees executing procurement transactions on behalf of CPA must receive appropriate training in the attributes of each product type that they transact, how the product furthers the portfolio objectives of CPA, and how the risk profile of CPA is impacted by procurement of each product;
All employees executing procurement activities shall complete required and available energy market compliance training as determined by the Chief Operating Officer once per calendar year and acknowledge receipt of said training in writing;
The Human Resources Department shall maintain records of each employee’s training status.
3.11 Trade Capture and Quality Assurance
To manage operational risk related to Trade Capture and execution, the Risk Management Team (RMT) shall develop and implement internal Trade Capture procedures. These procedures will ensure that all transactions are accurately recorded in the System of Record in a timely manner and independently confirmed by the Middle Office.
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16 Section 4: ORGANIZATIONAL STRUCTURE AND RESPONSIBILITIES
4.1 Board of Directors Responsibilities
The Board has the responsibility to review and approve the ERMP. With this approval, the Board acknowledges responsibility for understanding the risks CPA is exposed to through its CCA activity and how the policies outlined in the ERMP help CPA manage the associated risks. The Board is also responsible to:
Provide strategic direction to CPA;
Consider transactions beyond authorities delegated to the Chief Executive Officer in consultation with the RMT;
Consider changes to the Energy Risk Hedging Strategy (see Appendix B); and Consider new transaction types not currently listed in the ERMP (see Appendix C).
4.2 Risk Management Team
The RMT is responsible for implementing, maintaining and overseeing compliance with the ERMP and for maintaining the Energy Risk Hedging Strategy. The members of the RMT consist of the Chief Executive Officer, the Chief Operating Officer, the Chief Financial Officer, and the Vice President of Power Supply. A minimum of three (3) RMT members are required in order for an action or approval to be effective. In the event of any Vacancy, the RMT may (i) appoint interim RMT member(s) or (ii) operate the RMT with the remaining RMT member(s), until such time as the Vacancy is filled or the reason for the Vacancy no longer exists.
The primary goal of the RMT is to ensure that the procurement activities of CPA are executed within the guidelines of the ERMP and are consistent with Board directives. The RMT shall consider and propose changes to the ERMP when conditions dictate.
Pursuant to direction and delegation from the Board of Directors and the limitations specified by this ERMP, the Chief Executive Officer, in consultation with the RMT, maintains authority over procurement activities for CPA. This authority includes, but is not limited to, taking any or all actions necessary to ensure compliance with the ERMP.
The RMT responsibilities may include, but are not limited to:
Maintain the Energy Risk Hedging Strategy and ensure that all procurement strategies and related protocols are consistent with the ERMP;
Review financial and risk models and subsequent changes; Establish counterparty Credit Limits;
Review initial counterparty credit review models and methods for setting and monitoring Credit Limits and subsequent changes;
Review reports as described in the ERMP;
Meet to review actual and projected financial results and potential risks; Keep apprised of any change in the environment in which CPA operates that has a material effect upon the risk profile of CPA;
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17 Review summaries of limit violations and recommend corrective actions, if necessary; and Review the effectiveness of CPA’s energy risk measurement methods.
4.3 Segregation of Duties
CPA shall work to maintain a segregation of duties, also referred to as “separation of function,” to help manage and control the risks outlined in the ERMP. Individuals responsible for legally binding CPA to a transaction will not also perform confirmation or settlement functions without supplemental, transparent, and auditable controls. CPA also will leverage the organizational structure of the Scheduling Coordinator’s Middle and Back offices to help maintain a segregation of duties. The Front, Middle and Back Office responsibilities for CPA are described below.
4.3.1 Front Office
The Front Office is headed by the Vice President, Power Supply. The Front Office has overall responsibility for (1) managing all activities related to procuring and delivering resources needed to serve CPA load, (2) analyzing fundamentals affecting load and supply factors that determine CPA’s net position, and (3) transacting within the limits of the ERMP and associated policies to balance loads and resources and maximize the value of CPA assets through the exercise of approved optimization strategies. Other duties associated with these responsibilities include:
Assist in the development and analysis of risk management hedging products and strategies, and bring recommendations to the RMT;
Prepare a monthly operating plan for the prompt month (the month following the current month) that gives direction to the Day-Ahead and Real-Time Market trading and scheduling staff regarding the bidding and scheduling of CPA’s resource portfolio in the CAISO market; Calculate and maintain the net forward positions (a forecast of the anticipated electric demands compared to existing resource commitments) of CPA for all power products (energy, renewable energy, Carbon Free Energy and Resource Adequacy Capacity); Develop, price and negotiate hedging products;
Oversee scheduling of load and resources into CAISO;
Keep accurate records of all executed transactions;
Manage and facilitate the transaction execution process for power supply transactions through coordination of the following activities:
o Notify Front Office personnel of any anticipated unique physical delivery or scheduling issues;
o Work with Middle Office personnel and legal counsel to establish a contract, evaluate counterparty creditworthiness and secure additional credit from the counterparty, if necessary;
o Work with Middle Office, as needed, to perform an analysis of the potential transaction to evaluate the effect on CPA’s portfolio risks;
o Notify Back Office of terms and conditions affecting settlement to ensure that the necessary settlement procedures are in place.
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18 4.3.2 Middle Office
The Middle Office functions are the responsibility of the Chief Financial Officer. The Middle Office provides market and credit risk oversight, has responsibility for development of risk management policies and procedures, monitors compliance with the same, and keeps management and the Board informed on risk management issues. CPA will maintain its Middle Office functions independent from the front and back office functions.
Middle Office responsibilities include the following:
Create and ensure compliance with policies outlining standard procedures for conducting business;
Oversee short-term and long-term load forecasting;
Estimate and publish daily forward monthly power curves and weekly publish natural gas price curves for a minimum of the balance of the current year through the next calendar year; Verify the net forward positions of CPA for all power products; Ensure that CPA adheres to all risk policies and procedures; Implement and enforce credit policies and limits;
Confirm all transactions conform to commercial terms and alert Front Office to discrepancies;
Ensure all trades have been entered into the System of Record as well as the Scheduling Coordinator’s transaction data management system;
Ensure that all CAISO Day-Ahead, Fifteen Minute and Real-Time Market delivery volumes and prices are entered into a transaction database;
Review models and methodologies and recommend RMT approval, as needed; Mark unrealized and realized gains and losses associated with CPA hedge activity. Development and maintain financial and energy risk management models as directed by the RMT Develop and maintain load forecasting models and perform long term load forecasts as directed by RMT
4.3.3 Back Office
The Back Office functions are the responsibility of the Chief Financial Officer. It provides support with a wide range of administrative activities necessary to execute and settle transactions and to support the risk control efforts (e.g., transaction entry and/or checking, data collection, billing, etc.) consistent with the ERMP. Through its partnership with the Scheduling Coordinator, CPA will maintain its Back Office functions independent from the Front and Middle Office functions.
Back Office responsibilities include the following:
Ensuring timely and accurate financial reporting;
Maintaining a system of financial controls and business processes that control financial risk; Maintaining the overall financial security of transactions undertaken on behalf of CPA; Carrying out month-end checkout of all transactions each month; and Agenda Page 78
19 Validation and prompt payment of energy related invoices payable by CPA and resolving disputes with counterparties;
Generation and prompt collection of energy related invoices payable by counterparties Agenda Page 79
20 Section 5: DELEGATION OF AUTHORITY
5.1 Risk Limits
The following limits apply to all CPA procurement activities. These limits are Board-approved and define the limits that CPA must operate within. The metrics and management of risk within these limits is further described in the Energy Risk Hedging Strategy.
5.1.2 Delegation Authority
Through its approval of the ERMP, the Board has delegated operations and oversight to the Chief Executive Officer, in consultation with the RMT, as outlined through the ERMP. Specifically, to facilitate daily operations of the CCA, the Board has delegated transaction execution authorities shown in the table below.
Table 5.1.2.*
Position Transaction Type Term
Limit
Maturity
Limit
Counterparty
Limit
Notional
Value Limit
(per
transaction)
Notional
Value
Limit
(annual)
Chief Executive
Officer in
consultation
with the RMT
Tolling Agreements 3 years 3 years
Pursuant to
Credit Policy
in Section 6
of this Policy
Within hedge limits
approved in the Energy
Risk Hedging Strategy in
Appendix B of this Policy.
New Build 5 years 7 years
Any transactions
other than Tolling
Agreements or New
Build
10 years 10 years
*
See Appendix A for definitions of “Tolling Agreement,” Term Limit,” “Maturity Limit,” and “New Build.” For operational flexibility, the Chief Executive Officer will have the authority to delegate transaction execution authority to either the Chief Operating Officer, or Vice President, Power Supply, as needed. Any delegation will be documented in writing using the form in Appendix G.
For a transaction to be valid, it must conform to each of the limits specified in Table 5.1.2, above.
These limits will be applied to wholesale power procurement outside of transactions directly executed with the CAISO. These limits provide CPA the needed authority to manage risks as they arise. Transactions falling outside the delegations above require Board approval prior to execution.
Transactions with CAISO and CAISO administrative fees are excluded from this table. CAISO transactions are limited to those required for scheduling contracts in the CAISO market and for balancing CPA’s load and resources.
5.1.3 Long‐Term Procurement
Long-term procurement, defined as transactions greater than the Limits specified in Table 5.1.2 will be subject to Board approval. Long-term contracts are procured through solicitations, bilateral negotiations, or regulatory proceedings, with oversight including shortlist approvals or procurement recommendations, Agenda Page 80
21 provided by the Energy Resources & Planning Committee of the Board.
All long-term contracts are evaluated using standard evaluation criteria, including economic value over the life of the contract and any additional evaluation criteria established by the Energy Resources & Planning Committee and consistent with Board policy directives. Proposals received in solicitations, including all pricing and other confidential submission information, are reviewed by an RFO Review Team comprised of the Chief Executive Officer, additional Staff members as determined by the Chief Executive Officer, and a subset of Board members serving on the Energy Resources and Planning Committee, unless otherwise determined appropriate by the Chief Executive Officer and General Counsel in consultation with the Board Chair and Chair of the Energy Resources and Planning Committee. Proposals, either from solicitations, bilateral negotiations, or regulatory proceedings, are evaluated by the Energy Resources & Planning Committee and approved for to enter into contract negotiations, which includes but is not limited to entering into Exclusivity Agreements. In the event of exigent circumstances, such as fast- track negotiations, staff are authorized to enter into Exigent Exclusivity Agreements for up to a total of 90 days prior to the Energy Resources & Planning Committee’s approval to enter into contract negotiations. On or before the conclusion of the term of the Exigent Exclusivity Agreement a project subject to an Exigent Exclusivity Agreement may either (i) be brought to the Energy Committee for approval to enter into contract negotiations or (ii) terminate pursuant to the provisions of the Exigent Exclusivity Agreement, whichever is earliest. Final awards are then presented for Board consideration in accordance with applicable law.1
Any amendments to a Board-approved long-term contract that make material changes to the terms of the contract including, but not limited to, (a) price increase, (b) volume change greater than 10%, (c) capacity change greater than 10%, (d) extension of the guaranteed commercial operation date (i) greater than 3 months or (ii) when liquidated damages are not paid for the length of an extension up to 12 months, counterparty security requirements, or other amendments that would result in a downgrade of impact the evaluation criteria upon which a project was approved (collectively “Material Changes”) must be also approved the Board.
Any changes that are not Material Changes are minor, non-core and administrative in nature, or arising from the counterparties effectuating or clarifying their understanding of the obligations related to the project under normal course of business, including but not limited to guaranteed commercial operation date extension of 3 months or less, or 12 months or less when liquidated damages are paid for the length of the extension, implementing project financing, consent to collateral assignment, assignments, changes to progress reporting forms, insurance obligations, or termination, may be approved and executed by the Chief Executive Officer or Chief Operating Officer. The Chief Executive Officer will provide a monthly report to the Board on any agreements or amendments executed pursuant to this delegation.
All procurement executed under the delegation above must align with CPA’s underlying risk exposure (i.e., load requirements, locational and temporal) that is being hedged consistent with the Energy Risk Hedging Strategy. The RMT will consider risks associated with executed or planned long-term procurement within its evaluation of overall portfolio risk and procurement decision-making. 1 Awards will be presented without market sensitive information (i.e., pricing or other sensitive commercial terms) for Board consideration in accordance with applicable law.
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22 5.1.4 Volume Limits
Transactions should not be executed that exceed CPA’s energy, capacity, or renewable or Carbon Free Energy requirements. If there is an adjustment to CPA requirements resulting in the volume of existing transactions exceeding CPA’s requirements, the RMT will determine the most favorable strategy to appropriately rebalance the portfolio.
An exception to the above limits may be made by the RMT if executing a transaction exceeding load will minimize costs or is necessary to ensure compliance. For example, procuring RA for the entire year could cause CPA to hold excess RA in certain months. Such a transaction would be acceptable if a lower cost alternative transaction or set of transactions that more closely matches monthly needs is unavailable.
5.1.5 Locational Limits
The delivery location for all transactions must support the requirements of CPA’s source or sink locations.
5.1.6 CAISO Submission Limits
CPA shall bid at least 80% of its forecast load requirements in the Day-Ahead Market and bids shall not exceed 100% of forecast load requirements.
CPA shall offer no more than 100% of the forecasted generation capability in the Day-Ahead Market. CPA shall follow CAISO protocols for all activity within CAISO.
5.2 Monitoring, Reporting and Instances of Exceeding Risk Limits The Middle Office is responsible for monitoring and reporting compliance with all limits within the ERMP.
If a limit or control is violated, the Middle Office will send notification to the trader responsible for the violation and the RMT. The RMT will discuss the cause and potential remediation of the exceedance to determine next steps for curing the exceedance.
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23 Section 6: CREDIT POLICY AND COUNTERPARTY SUITABILITY Prior to execution of any transaction other than for long term procurement transactions governed by Section 5.1.3, the Front Office will verify that CPA has executed a master agreement with the counterparty, that the counterparty has been evaluated for creditworthiness, and that an approved Credit Limit has been established. No transactions described in this section may be executed without first ensuring the transaction falls within the unutilized Credit Limit for the counterparty or has been approved on an exception basis by the Chief Financial Officer.
6.1 Master Enabling Agreements and Confirmations
Transactions are governed by master agreements, the forms of which must be prepared by CPA General Counsel and approved by the Board. No transactions may be executed without a fully executed master agreement being on file. Written confirmations of each transaction will contain standard commercial terms and provisions. Material modifications or additions to standard commercial terms in confirmations require approval by legal counsel. Modifications to standard credit terms in confirmations or enabling agreements require approval by CFO.
It is CPA’s policy to confirm all transactions in writing. All confirmations received from counterparties will be matched against trades in the System of Record. Any discrepancies between a confirmation and the System of Record may be handled by the Front Office representative that executed the transaction, or if necessary, a Middle Office representative will seek resolution with the counterparty. All confirmations will be kept on file.
6.1.1 Exceptions
It is standard industry practice to not provide written confirmation of certain short-term transactions with a term of one day or less. Additionally, CPA may agree with certain counterparties to alternative methods for confirming certain transactions. Transactions executed in a recorded telephone conversation or recorded instant message in which the offer and acceptance shall constitute the agreement of the parties must be confirmed in writing after-the-fact, with notice being provided to the counterparty within 72 hours.
6.2 Counterparty Suitability
All counterparties shall be evaluated for creditworthiness by the Middle Office prior to execution of any transaction and no less than annually thereafter. Additionally, counterparties shall be reviewed if a change has occurred, or is perceived to have occurred, in market conditions or in a company’s management or Agenda Page 83
24 financial condition. This evaluation, including any recommended increase or decrease to a Credit Limit, shall be documented in writing and include all information supporting such evaluation in a credit file for the counterparty.
Counterparty Credit Limits, and credit and payment terms will be recommended by the Middle Office for approval by the RMT consistent with CPA’s Credit Protocols. The Middle Office will undertake credit analysis that shall include, at a minimum, an evaluation of current audited financial statements or other supplementary data and consider factors such as:
Liquidity
Leverage (debt)
Profitability
Net worth
Cash flow
Proposed collateral and other contract terms
Counterparty’s senior unsecured or corporate credit rating will be obtained from one of the nationally recognized rating agencies (S&P, Moody’s, and/or Fitch) if available. Trade and banking references, and any other pertinent information, may also be used in the review process.
When establishing credit and payment terms, RMT will consider the Credit Limit of the counterparty, current exposure to the counterparty, the product type and tenor of existing and/or future transactions, notional value of proposed or future transactions with the counterparty and the availability/scarcity and commercial significance of the product being traded. A counterparty may choose to provide a guarantee from a third party, provided the third party satisfies the criteria for a Credit Limit as outlined herein.
6.3 Maximum Credit Limit
Each new counterparty Credit Limit or increase to an existing limit will be reviewed by the RMT. The maximum amount of any Credit Limit extended to a counterparty shall not exceed $50,000,000 unless approved in writing by the Board.
6.4 Credit Review Exceptions
Counterparties not subject to the above credit review criteria include those associated with Day-Ahead and current day purchases where risks associated with market movements are minimal.
6.5 Credit Limit and Monitoring
The Middle Office will monitor the current credit exposure for each counterparty with whom CPA transacts and include such information in the Current Counterparty Credit Risk Report. This report will be submitted to the RMT for review pursuant to the reporting requirements outlined in Section 7.
Current credit exposure is a measure of the known exposures and composed of two primary exposures – (1) realized exposure, and (2) forward exposure. Realized exposure, a payable or receivable amount owed between counterparties, is a measurement of cash flow for billed and unbilled transactions. Forward exposure is a measure of current unrealized exposure and includes the measure of a counterparty’s incentive to fulfill contractual obligations. Forward exposure measures the risk associated with having a Agenda Page 84
25 payment default or the need to replace a transaction in the event of delivery default.
6.6 CPA Credit Support
Counterparties may require CPA to post a form of credit support, such as cash or a letter of credit. The Middle Office will ensure that any CPA credit support requirements are evaluated and approved within the context of the overall transaction approval as specified herein.
Section 7: POSITION TRACKING AND MANAGEMENT REPORTING
A vital element in the ERMP is the regular identification, measurement and communication of risk. To effectively communicate risk, all risk management activities must be monitored on a frequent basis using risk measurement methodologies that quantify the risks associated with CPA’s procurement-related business activities and performance relative to identified goals.
Minimum reporting requirements are shown below. The reports outlined below will be presented to the RMT, except reports to the Board. Reports will be generated weekly unless otherwise noted. Financial Model Forecast
Latest projected financial performance, marked to current market prices, and shown relative to CPA’s financial goals.
Net Position Report
Latest forward net position report, by product type (energy, PCC1, PCC2, Carbon Free Energy and RA capacity) for the current and prompt year.
Counterparty Credit Exposure
Current counterparty credit exposure compared against limits approved by CPA, as well as the limit assigned to CPA by the counterparty.
Monthly Risk Analysis
Cash flow forecasting and stress testing of financial forecasts relative to financial goals. Gross margin at risk reporting. Additional discussion of the specific gross margin at risk reporting and its application is provided in the Energy Risk Hedging Strategy. Monthly Transaction Reporting
The following transactions executed under the authority delegated in Section 5.1.2 will be reported monthly to the Board: (i) Any Tolling Agreement; (ii) any transaction with a Term greater than five years.
Quarterly Board Reporting
Update on activities, projected financial performance, and general market outlook to be presented quarterly at Board meetings, communicated in a way to ensure CPA confidentiality and market sensitive data is not released.
Agenda Page 85
26 Section 8: ERMP REVISION PROCESS
The ERMP will evolve over time as market and business factors change. At least on an annual basis, the Chief Executive Officer, in consultation with the RMT, will review the ERMP and associated procedures to determine if they should be amended, supplemented, or updated to account for changing business conditions and/or regulatory requirements. If an amendment is warranted, the ERMP amendment will be submitted to the Board for approval. Changes to ERMP appendices may be approved and implemented by the Chief Executive Officer, in consultation with the RMT, with the exception of Appendices B and C, which will require Board approval.
8.1 Acknowledgement of ERMP
All CPA Representatives participating in any activity or transaction within the scope of the ERMP or in the case of a consultant, an executive of the consultant or a delegated representative authorized to bind the consultant with regard to ERMP obligations shall sign, on an annual basis or upon any revision, a statement approved by the Chief Executive Officer, in consultation with RMT, that such CPA Representative has:
Read the ERMP;
Understands the terms and agreements of said ERMP;
Will comply with said ERMP;
If an employee, understands that any violation of said ERMP shall subject the employee to discipline up to and including termination of employment; If a consultant, understands that any violation of said ERMP may be grounds for consultant contract termination; and
If a Board member, understands that any violation of said ERMP shall subject the Board member to action by the Board.
8.2 ERMP Interpretations
Questions about the interpretation of any matters of the ERMP should be referred to the Director, Energy Market Risk Management.
All legal matters stemming from the ERMP will be referred to CPA counsel.
Agenda Page 86
27 Appendix A: DEFINITIONS
Back Office: That part of a trading organization which handles transaction accounting, confirmations, management reporting, and working capital management.
CAISO: California Independent System Operator. CAISO operates a California bulk power transmission grid, administers the State’s wholesale electricity markets, and provides reliability planning and generation dispatch.
Calendar Quarter: A three-month period that commences on January 1, April 1, July 1 or October 1 and ends on March 31, June 30, September 30 or December 31, respectively.
Calendar Year: A 12-month period that commences on January 1 and ends on December 31.
Carbon Free Energy: Energy that is generated from a specific zero carbon emitting generating asset. It is commonly used to note energy from large hydroelectric or nuclear generation that while non-carbon emitting, is not an RPS-eligible generation source. Sometimes referred to as specified source energy.
CCA: Community Choice Aggregator. CCAs allow local government agencies such as cities and/or counties to purchase and/or develop generation supplies on behalf of their residents, businesses and municipal accounts.
CFTC: Commodity Futures Trading Commission. The CFTC is a U.S. federal agency that is responsible for regulating commodity futures and swap markets. Its goals include the promotion of competitive and efficient futures markets and the protection of investors and market participants against manipulation, abusive trade practices and fraud.
Congestion Revenue Right: A point-to-point financial instrument in the Day-Ahead Energy Market that entitles the holder to receive compensation for or requires the holder to pay certain congestion related transmission charges that arise when the transmission system is congested.
Credit Limit: The maximum amount of financial exposure one party is willing to extend to another.
Day-Ahead Market: The short-term forward market conducted by an Organized Market prior to the operating day. It is intended to efficiently allocate transmission capacity and facilitate purchases and sales of energy and scheduling of bilateral transactions.
Exclusivity Agreements: An agreement between CPA and a proposer approved by Energy Resources & Planning Committee to enter into contract negotiations, which secures the obligations of the proposer during an established negotiating period
Exigent Exclusivity Agreements: An agreement between CPA and a proposer entered into prior to the Energy Resources & Planning Committee’s contract negotiations approval due to exigent circumstances, such as fast-track negotiations. This agreement secures the obligations of the proposer during an established negotiating period
FERC: Federal Energy Regulatory Commission. FERC is a federal agency that regulates the interstate transmission of electricity, natural gas and oil. FERC also reviews proposals to build liquefied natural gas terminals, interstate natural gas pipelines, as well as licenses hydroelectric generation projects.
Front Office: That part of a trading organization which solicits customer business, services existing customers, executes trades and ensures the physical delivery of commodities.
Franchise Fee: A franchise fee is a percentage of gross receipts that an IOU pays cities and counties for the right to use public streets to provide gas and electric service. The franchise fee surcharge is a percentage of the transmission (transportation) and generation costs to customers choosing to buy Agenda Page 87
28 their energy from third parties. IOUs collect the surcharges and pass them through to cities and counties.
IOU: An Investor Owned Utility (IOU) is a business organization providing electrical and/or natural gas services to both retail and wholesale consumers and is managed as a private enterprise.
Limit Structure: A set of constraints that are intended to limit procurement activities.
Maturity Limit: The maximum time period between transaction execution date and the date of the final delivery of the contracted product.
Middle Office: That part of a trading organization that measures and reports on market risks, develops risk management policies and monitors compliance with those policies, manages contract administration and credit, and keeps management and the Board informed on risk management issues.
New Build: The development and construction of a new generating or storage facility or an expansion, upgrade, or redevelopment of an existing facility where incremental capacity is offered.
PCIA: Power Cost Indifference Adjustment or successor. The PCIA is intended to compensate IOUs for their stranded costs when a bundled customer departs and begins taking generation services from a CCA.
Portfolio Content Category 1 (PCC1) Renewable Energy: Energy and bundled Renewable Energy Credits that is simultaneously procured from an RPS-Eligible Facility that is directly interconnected to the distribution or transmission grid within a California balancing authority area (CBA); or that is not directly interconnected to a CBA but is delivered to a CBA without substituting electricity from another source.
Portfolio Content Category 2 (PCC2) Renewable Energy: Energy and bundled Renewable Energy Credits that is simultaneously purchased from an RPS-Eligible Facility, but the energy is firmed and shaped with substitute electricity scheduled into a CBA within the same calendar year as the renewable energy is generated.
Portfolio Content Category 3 (PCC3) Renewable Energy: Renewable Energy Credits from RPS-eligible facilities that do not meet the definition of PCC1 or PCC2.
Prompt Quarter (PQ): The Calendar Quarter beginning immediately after the current Calendar Quarter.
PQ + n is the nth Calendar Quarter following Prompt Quarter.
Prompt Year (PY): The Calendar Year beginning immediately after the current Calendar Year.. PY + n is the nth Calendar Year following Prompt Year.
Real-Time Market: The real-time market is a spot market in which LSEs can buy power to meet the last few increments of demand not covered in their day ahead schedules, up to 75 minutes before the start of the trading hour.
Resource Adequacy Capacity: A capacity product whereby a Seller commits to a must offer obligation of its generator in the CAISO market and on behalf of a specified Load Serving Entity.
RPS-Eligible Facility: Defined under CA Public Utilities Code § 399.11 et seq. and CA Public Resources Code § 25740 et seq. as an electrical generating facility using technologies such as biomass, solar thermal, photovoltaic, wind, geothermal, fuel cells using renewable fuels, small hydroelectric generation of 30 megawatts or less, ocean wave, ocean thermal, or tidal current.
Settlement: Settlement is the process by which counterparties agree on the dollar value and quantity of a commodity exchanged between them during a particular time interval.
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29 Stress testing: Stress testing is the process of simulating different financial outcomes to assess potential impacts on projected financial results. Stress testing typically evaluates the effect of negative events to help inform what actions may be taken to lessen the negative consequences should such an event occur.
System of Record (SOR): An information storage system that is the authoritative data source for a given data element or piece of information.
Term Limit: The total duration of the contract counted as the maximum time period between the beginning flow date of contracted product deliveries and the ending flow date of contracted product deliveries, inclusive.
Tolling Agreement: An agreement between a power buyer and a power generator, under which the buyer supplies the fuel, either physically or financially, and receives an amount of power generated based on an assumed conversion rate at an agreed cost. Typically used for generation facilities powered by natural gas and excludes battery storage.
Trade Capture: means the process of updating the System of Record with new contract data.
Vacancy: A vacancy exists in the case of death, incapacity, illness, an excused absence, family emergency, jury duty, religious observance, vacation, resignation or termination of employment from CPA, a material change in a member’s job duties or responsibilities, conflict of interest, or an unavoidable absence.
Agenda Page 89
30 Appendix B: ENERGY RISK HEDGING STRATEGY
1.1 Introduction
CPA is routinely exposed to commodity price risk and volume variability risk in the normal conduct of serving the power supply requirements of its customers.
This Energy Risk Hedging Strategy (ERHS) describes the strategy and framework that CPA will use to hedge the power supply requirements of its customers. Specific focus is on procurement of the following market-based products:
Fixed Priced Energy
Portfolio Content Category 1 Renewable Energy
Portfolio Content Category 2 Renewable Energy
Carbon Free Energy
Resource Adequacy Capacity
In addition to market-based transactions entered into pursuant to this ERHS, CPA will also enter into longer-term power purchase agreements (PPAs) pursuant to statutory requirements (e.g., SB 350 mandate to, by 2021, procure a minimum of 65 percent of RPS requirements under a 10-year or longer power purchase agreement), as well as voluntary long-term resource acquisition decisions made independently by CPA pursuant to its Integrated Resource Plan or other approved Board-approved strategies. Long-term Power Purchase Agreements (PPAs) will count as hedges as described later in this ERHS.
2.1 Governance
This ERHS shall be updated, as necessary, from time to time and governed by the Energy Risk Management Policy (ERMP) approved by the CPA Board of Directors.
3.1 Hedging Program Goals
The overall goal of the ERHS is to identify exposure to commodity prices, quantify the financial impact variability in commodity prices, load requirements and generation output may have on the ability of CPA to meet its financial program goals, and manage the associated risk.
The primary goals that guide this ERHS are:
Acquire a portfolio of resources with lower greenhouse gas emissions and higher renewable content than SCE;
Meet reliability requirements established by the state of California, and operate in a manner consistent with prudent utility practice;
Maintain competitive retail rates with SCE after adjusting for exit fees (currently the Power Charge Indifference Adjustment or PCIA) and Franchise Fees paid by CPA customers; Build financial reserves to ensure the CPA’s long-term financial objectives are achieved.
All hedging activities will be conducted to achieve results consistent with the above goals and to meet the Agenda Page 90
31 power supply requirements of CPA’s customers. Any transaction that cannot be directly linked to a requirement of serving CPA’s customers, or that serves to reduce risk is prohibited.
4.1Hedging Targets and Strategies
4.1.1 Fixed Price Energy
Fixed Price Energy purchases allow for suppliers to deliver energy – for which CPA will receive energy market revenues – to CPA at a fixed price. They are used to manage the electricity commodity price risk that the CPA faces as a Load Serving Entity. Specific to CPA’s customers, Fixed Price Energy hedges are used to provide cost certainty and rate stability.
When assessing its requirements for Fixed Price Energy, CPA will use an econometric model to forecast hourly energy requirements and monthly peak demand by customer load class. The model will use historical data to estimate relationships between energy consumption and economic, demographic and/or weather variables. The model will be refined through time as additional load and other data is acquired. CPA employs Fixed Price Block Energy contracts, which provide for suppliers to deliver a predetermined volume of energy at a constant delivery rate. As CPA enters into long- term, fixed price contracts for renewable and/or carbon-free energy, these will likewise hedge CPA’s market risk and, subsequently, reduce the required volume of Fixed Price Block Energy purchases. Long term contracting has the further effect of increasing the hedge percentage in the second calendar quarter of the year above the hedge percentage in other quarters because energy consumption is lowest in the second quarter. Adjustments to the Maximum Hedge percentage in the second quarter, as described in the following paragraph, addresses this dynamic.
CPA will observe the following schedule when hedging its Fixed Price Energy Requirements for the first, third and fourth calendar quarters of each calendar year. The following schedule will also apply to the second calendar quarter, provided that 20% is added to the Maximum Hedge Percentage in prompt quarters +10-39, raising the limit from 70% to 90%. The Minimum and Maximum Hedge Percentage represent the Fixed Price Energy planned or under contract divided by forecasted load.
Agenda Page 91
32 Quarter
Minimum
Hedge %
Maximum Hedge
%
Prompt Q (PQ) 7585% 110%*
PQ + 1 7280% 110%*
PQ + 2 6874% 110%*
PQ + 3 669% 110%*
PQ + 4 63% 105%*
PQ + 5 58% 99%
PQ + 6 52% 93%
PQ + 7 47% 8790%
PQ + 8 41% 8290%
PQ + 9 36% 76%90
PQ + 10 – 39 (Q1) 30% 70%
PQ + 10 – 39 (Q2) 30% 90%
PQ + 10 – 39 (Q3) 30% 70%
PQ + 10 – 39 (Q4) 30% 70%
* Maximum hedge percentages allow for a planning margin to accommodate volumetric uncertainty associated with electric consumption and generation Energy hedging compliance will be measured within 5 days prior to the first day of each quarter (e.g., on a date between September 26th and September 30th , 2024, CPA will have hedged 85 to 110 percent of its projected energy requirements for Q4 2024 and 80 to 110 percent of requirements for Q1 2025).
The minimum hedge level will be achieved by implementing a time-driven programmatic strategy. Time-driven programmatic hedges are executed at a predetermined rate pursuant to a time schedule and without regard for market conditions. The purpose of these hedging transactions is to achieve a reduction in variability in power supply costs by gradually increasing the amount of energy hedged as the actual date of consumption approaches. Time-driven strategies avoid the inherent impossibility of trying to consistently and accurately “time the market” to purchase energy at least cost when making hedging decisions. Additionally, a load serving entity the size of CPA needs to spread its procurement efforts over time to effectively manage the potential negative price impacts of procuring a large volume of energy, over a short period of time, in an illiquid market.
Hedging decisions to reach targets between the minimum and maximum hedge levels will be based on price-driven or opportunistic strategies. The purpose of price-driven or opportunistic strategies is to capitalize on market opportunities when conditions are favorable. CPA will base its decision to execute opportunistic hedges on the anticipated impact to projected power supply costs and the resulting reduction in risk.
Opportunistic hedges may be executed when energy price levels are favorable to lowering the cost of power relative to established program goals and financial projections; alternatively, opportunistic hedges Agenda Page 92
33 can be executed in adverse market conditions relative to financial goals in order to reduce the potential negative impact of continued upward trending commodity prices relative to established goals.
In executing this ERHS, Fixed-Price Energy hedges may be modified, repositioned, sold or unwound for the purpose of maintaining hedge coverage that matches changes in forecast electric load. This includes the ability of the CPA to use liquid market products to hedge average loads over a defined time period and then later modify its hedges to more precisely match load.
4.1.2 Renewable Energy
In order to cost-effectively meet its GHG-reduction and renewable energy goals, CPA intends to meet a growing share of its energy supply requirements with renewable energy, a large portion of which will be Product Content Category 1 (PCC1) renewable energy. PCC1 renewable energy is sourced from a renewable generator that is either directly interconnected to the California Independent System Operator (CAISO) or another California Balancing Authority or directly scheduled into CAISO without use of substitute energy. CPA shall diversify its renewable energy portfolio further by incorporating Portfolio Content Category 2 (PCC2) renewable energy purchases. PCC2 renewable energy is sourced from renewable generators located outside the state of California- where that generation is “firmed and shaped” for delivery into California. PCC2 purchases are typically less expensive and shorter in term than PCC1, so they provide a cost-effective and flexible method of augmenting CPA’s renewable energy purchases to meet renewable portfolio content commitments to customers. However, not all PCC2 renewable energy is emissions-free; therefore, CPA must assess the value of PCC2s against its respective emissions intensity. In addition, RPS compliance rules set minimum requirements for PCC1 and PCC2 as a percentage of the total RPS compliance portfolio, which CPA will abide by in its procurement of both products.
In order to manage price risk of long-term renewable energy, and to allow CPA to prudently and methodically build a portfolio of long-term assets, CPA intends to meet its renewable energy targets with a blend of short and long-term contracts. CPA intends to fully comply with long-term contracting requirements mandated by SB 350; therefore, executed and planned long-term renewable contracts will be reflected in CPA’s renewable energy positions.
Agenda Page 93
34 CPA shall observe the following schedule while hedging its renewable energy requirements. This hedge schedule shall be measured within 5 days prior to the first day of each quarter for the Current Calendar Year, and within 5 days prior to December 1 of each year for the following ten Calendar Years.
Time Period Minimum Hedge % Maximum Hedge %
Current Calendar Year 90 110*
Prompt Calendar Year 80 110*
PY + 1 50 105*
PY + 2 50 100
PY + 3 50 95
PY + 4 – 9 50 95
* Maximum hedge percentages allow for a planning margin to accommodate volumetric uncertainty associated with electric consumption and generation
4.1.3 Carbon Free Energy
In pursuit of its GHG-reduction objections, CPA shall augment its renewable energy purchases outlined above with energy purchases from carbon-free energy generating facilities, which are typically hydro-electric resources located in California that are too large to qualify as Eligible Renewable Resources (30 MW or greater) or located outside of California. Similar to PCC2 renewable energy contracts, carbon-free energy purchases are typically short-term, most frequently one to three years in length.
CPA may have the opportunity to receive free carbon free allocations from SCE. Hedging activity should consider these allocations and expected allocations should be included in the hedging percentage.
CPA will observe the following schedule when hedging its Carbon-Free renewable energy requirements.
This hedge schedule shall be measured within 5 days prior to the first day of each quarter for the Current Calendar Year, and within 5 days prior to December 1 of each year for the following ten Calendar Years.
Time Period Minimum Hedge % Maximum Hedge %
Current Calendar Year 85 110*
Prompt Calendar Year 75 110*
PY + 1 50 110*
PY + 2 250 100
PY + 3 0 75
PY + 4 – 9 0 75
* Maximum hedge percentages allow for a planning margin to accommodate volumetric uncertainty associated with electric consumption and generation In setting the above targets, it is important to note that the purchase of Carbon Free Energy is a voluntary requirement set by the CPA Board to exceed SCE’s GHG emissions goals. In determining the total volume of Carbon Free Energy to be hedged, the CPA Board may elect to increase or reduce the total quantity of Carbon Free Energy included in CPA’s portfolio as it seeks to balance multiple program objectives, including financial goals such as targets for financial reserves and retail rates.
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35 4.1.4 Resource Adequacy Capacity
As a Load-Serving Entity (LSE) in California, CPA is required to demonstrate both annually and monthly that it has secured sufficient energy capacity to provide for its share of California’s energy load; this capacity is referred to as Resource Adequacy (RA). CPA has RA requirements for Southern California (“South of Path 26 System”), a portion of which must be Flexible RA. Flexible RA requirements ensure resources are available on the grid to provide ancillary services such as ramping and regulation.
RA is typically transacted via contracts that vary in length, and it is currently bought and sold via a bilateral market, which not only provides cost-effective contracting opportunities but also proves at times to be fragmented and volatile. It is the goal of CPA to meet all RA requirements, including flex, and system products.
CPA will observe the following schedule when hedging its RA requirements. The hedge schedule shall be measured for the system RA product for the RA Net Peak Hour that CPA is required to procure within 5 days prior to December 1 of each year for the Prompt Calendar year and the nine subsequent calendar years where the RA Net Peak Hour represents the hour of the calendar year in which the CPA’s hourly RA under contract minus its RA requirement is the smallest measured in MW.
Time Period Minimum Hedge %
(applicable to all hours)
Maximum Hedge %
(applicable to RA Net Peak Hour
only)2
Prompt Calendar Year 90 105*
PY + 1 50 95
PY + 2 35 90
PY + 3 35 8090
PY + 4 35 90
PY + 54 – 9 35 80
* Maximum hedge percentages allow for a planning margin to accommodate volumetric uncertainty associated with electric consumption and generation For the purposes of calculating compliance with the minimum hedge target in years beyond the prompt year, CPA may consider standalone storage resources for which sufficient hourly surplus RA has not yet been procured for the portfolio during the battery’s expected charging window. 2 Due to the variable nature of CPA’s RA requirements, hours other than the RA Net Peak Hours may exceed the applicable Maximum Hedge %.
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36 4.1.5 Congestion Revenue Rights (CRRs)
As a CAISO market participant, CPA has congestion risk associated with serving its customer load. CPA manages congestion risks by preferring day ahead scheduling of energy delivered at SP-15, and by resource assessment and selection consistent with this Policy. Once energy is procured, CPA manages congestion risk through the prudent management of CRRs, which are financial instruments used to hedge against transmission congestion costs encountered in the CAISO day-ahead market. The RMT is responsible for overseeing the management of CRRs and CRR trading. The CRR portfolio will be managed by CPA's Front Office with support from CPA’s Scheduling Coordinator. CRRs are transacted to effectively manage portfolio congestion risk. Trading of CRRs for speculative purposes is not permitted.
5.1Hedge Program Metrics
The success of the Energy Risk Hedging Strategy will be measured by realizing power supply costs in line with the budgeted power supply costs used to set customer rates, as well as by reducing CPA’s exposure to commodity price risk.
Current projected power supply costs will be compared to budgeted power supply costs where budgeted costs will be based on the assumptions used at the time customer generation rates are set. Current power supply costs shall use all fixed priced contracts executed as of the date of the report. All open positions will be marked to market and compared to the budgeted power supply costs.
The Front and Middle Office will use a variety of industry standard metrics to evaluate open positions and potential hedge transactions. RMT will review these metrics when making price-driven or opportunistic hedging decisions to ensure that the transactions are consistent with the goals of the Energy Risk Hedging Strategy. These metrics will be updated and reported on a monthly basis.
6.1Reporting Requirements
The following reporting is required to manage the hedge program and to ensure its success:
Net position report for each product
Current projected power supply costs compared to budget Gross margin at Risk
GHG intensity
Agenda Page 96
37 Appendix C: AUTHORIZED TRANSACTION TYPES
All transaction types listed below must be executed within the limits set forth in the ERMP. Definitions for each product are provided in Appendix A.
CAISO Market Products
o Day-Ahead Market Energy (Energy purchased from the CAISO Day-Ahead Market.) o Real-Time Market Energy (Energy purchased from the CAISO in the Real-Time Market) o Congestion Revenue Rights (A point-to-point financial instrument in the Day-Ahead Energy Market that entitles the holder to receive compensation for or requires the holder to pay certain congestion related transmission charges that arise when the transmission system is congested.)
o Convergence Bids (Financial positions, either demand or supply, taken in the Day-ahead Market and liquidated in the Real-Time Market.)
o Inter-Scheduling Coordinator Trades (A trade between two Scheduling Coordinators that is a settlement service that CAISO offers to parties of a bilateral contract as a means of offsetting CAISO settlement charges against bilateral contractual payment responsibilities.) Physical Energy Products
o Short-Term Energy (Energy traded in the CAISO market or bilaterally for a duration less than one year.)
o Long-Term Energy (Energy traded in the CAISO market or bilaterally for a duration greater than one year.)
o Physical Over-the-Counter (OTC) Options (Call options that give the buyer the right, but not the obligation, to buy an underlying power product at agreed upon terms as detailed in a confirmation agreement; or put options that give the seller the right, but not the obligation, to sell an underlying power product at agreed upon terms as detailed in a confirmation letter.) Resource Adequacy Capacity (A capacity product whereby a Seller commits to a must offer obligation of its generator in the CAISO market and on behalf of a specified Load Serving Entity.) Import Capability Rights (Entitles an LSE to count Resource Adequacy products at a specified import location toward its Resource Adequacy Requirements.) Physical Environmental Products
o PCC1, PCC2 and PCC3 Renewable Energy (see definition in Appendix A)3 o Carbon Free Energy (see definition in Appendix A)
o California Air Resource Board Allowances (An allowance is a tradeable permit issued by the California Air Resource Board to emit one metric ton of a carbon dioxide equivalent greenhouse gas emissions.)
Financial Hedging Products
o Futures Contracts (A contract to buy or sell a commodity (electricity) at a predetermined price at a specified time in the future. Futures Contracts are standardized for quality and quantity to facilitate trading on a futures exchange (e.g., Intercontinental Exchange).) 3 Clean Power Alliance’s Joint Power’s Agreement discourages the purchase and use of PCC3 products. PCC3 products will only be acquired under exceptional circumstances requiring the use of this product to achieve the agency’s environmental and financial goals.
Agenda Page 97
38 o Swaps (Financial contracts in which one party agrees to pay a cash flow calculated by multiplying a fixed volume by a fixed price (fixed price payer) and the other party agrees to pay a cash flow calculated by multiplying the same fixed volume times a market reference index price (floating price payer). At settlement, the party owing the higher amount pays the net difference. Swaps are transacted in over-the-counter markets.) o Call and Put Options (Call options give the buyer the right, but not the obligation, to purchase energy or other instruments. Put options give the buyer the right, but not the obligation, to sell energy or other instruments.)
o Options on Swaps (Swaptions) (call options give the buyer the right, but not the obligation, to enter into a swap transaction as the fixed price payer. A put option gives the buyer the right, but not the obligation, to enter into a swap transaction as the floating priced payer.) Transmission (The reservation and transmission of capacity and energy between two points on a transmission provider’s system.)
Tolling Agreements An agreement between a power buyer and a power generator, under which the buyer supplies the fuel, either physically or financially, and receives an amount of power generated based on an assumed conversion rate at an agreed cost. Typically used for generation facilities powered by natural gas and excludes battery storage.
Agenda Page 98
39 Appendix D: NEW TRANSACTION TYPE APPROVAL FORM
New Transaction Type Approval Form
Prepared By:
Date:
New Transaction Type Name:
Business Rationale and Risk Assessment:
Product description – including the purpose, function, expected impact on net revenues (i.e., increase, manage volatility, control variances, etc.) and/or benefit to CPA Identification of the in-house or external expertise that will be relied upon to manage and support the new or non-standard transaction
Assessment of the transaction’s risks, including any material legal, tax or regulatory issues How the exposures to the risks above will be managed by the limit structure Proposed valuation methodology (including pricing model, where appropriate) Proposed reporting requirements, including any changes to existing procedures and system requirements necessary to support the new product
Proposed accounting methodology
Proposed Middle Office work flows/methodology, including systems Brief description of the responsibilities of various departments within CPA who will have any manner of contact with the new or non-standard transaction Reviewed by:
Vice President, Power Supply Date
Chief Operating Officer Date
Chief Executive Officer Date
Agenda Page 99
Appendix E: NOTICE OF CONFLICT OF INTEREST
To: [insert title]
Declaration of Conflict of Interest
I understand that I am obligated to give notice in writing to Clean Power Alliance of any interest or relationship that I may have in any counterparty that seeks to do business with Clean Power Alliance, and to identify any real or potential conflict of interest such counterparty has or may have with regard to any existing or potential contract or transaction with Clean Power Alliance, within 48-hours of becoming aware of the conflict of interest.
I would like to declare the following existing/potential conflict of interest situation arising from the discharge of my duties concerning Clean Power Alliance activities covered by the scope of the ERMP:
a) Persons/companies with whom/which I have official dealings and/or private interests:
b) Brief description of my duties which involved the persons/companies mentioned in item a) above.
Position and Name:
Signature:
Date:
Agenda Page 100
Appendix F: CODE OF MARKETING AND TRADING PRACTICES
See next page.
Agenda Page 101
CPA Code of Marketing and Trading Practices, Version 1.1 (updated July 18, 2019)
Clean Power Alliance of
Southern California
Code of Marketing and Trading Practices
July 12, 2018
Definitions
Marketing and Trading Employee – Any employee, contractor, consultant, or agent of CPA who engages in procurement activity.
Scope of Code
This Code of Marketing and Trading Practices (the “Code”) applies to all CPA Marketing and Trading Employees.
Each person subject to this Code is required to read, understand, and abide by the provisions contained in this Code.
Purpose
In addition to demonstrating CPA’s commitment to ethical business practices, this Code is designed to ensure that CPA complies with its obligations under state and federal laws, rules and regulations promulgated by various governmental agencies, and applicable policies adopted by CPA. This Code defines and affirms the values and principles that CPA’s Marketing and Trading Employees must follow in conducting their business activities. The Code is intended to complement the other policies, procedures and processes of CPA and to guide traders and marketers as they negotiate transactions, arrange for transmission, and manage risk.
Compliance with the Code allows CPA to assure its counterparties, potential customers, regulators, and the public that its business activities are, and will continue to be, conducted with integrity and unlawful/unethical trading practices will not be tolerated.
Questions about compliance with industry and company regulations as well as with this Code should be referred to CPA’s General Counsel.
Policy
CPA’s Marketing and Trading Employees shall:
1. Conduct business in good faith and in accordance with all applicable laws, regulations, tariffs and rules.
2. Endeavor to always act in the best interests of CPA’s customers.
3. Not disseminate, cause to be disseminated or facilitate the dissemination of known false or misleading information, or engage in transactions in order to exploit known false or misleading information.
4. Engage only in transactions with legitimate business purposes.
5. Not knowingly arrange or execute wash trades.
6. Not engage in any activity with the intent to alter any market price or otherwise interfere with the normal operation of a well -functioning competitive market.
7. Not engage in price reporting or furnishing transaction prices to any entity that collects prices to be used in the calculation of a price index or for distribution to subscribers, without prior written approval of CPA’s General Counsel.
8. Not collude with other market participants to: (i) affect the price of any commodity; (ii) allocate territories, customers or products; or (iii) otherwise restrain competition.
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CPA Code of Marketing and Trading Practices, Version 1.1 (updated July 18, 2019)
9. Not engage in transactions for commodities or services without the intention of providing those specific commodities or services.
10. Not reserve service, attempt to reserve service, access information, or attempt to access information from any transmission service provider except through means available to all eligible customers.
11. Successfully complete yearly CPA compliance training.
12. Comply with requirements that trading and marketing activities are recorded and retained.
13. Cooperate with any audit or investigation into trading and marketing activities.
Duty to Report Violations and Non-Retaliation Clause
A Marketing and Trading Employee who believes that a violation of the Code has occurred is required to promptly notify CPA’s Chief Operating Officer. CPA shall make every effort to ensure the confidentiality of the reporting Marketing and Trading Employee. If the reporting Marketing and Trading Employee is a CPA employee, CPA shall not discharge, suspend, demote, harass, layoff, deny a promotion, or take any other retaliatory action against that employee solely as a result of the act of reporting a suspected violation of the code. This in no way affects CPA’s rights as an employer with respect to all other issues. CPA will monitor and follow up to ensure that employees who have reported alleged violations have not been subject to retaliation.
Disciplinary Action
Any failure to abide by this Code, including the Duty to Report Violations, will result in disciplinary action. All potential violations are handled on a case-by-case basis and will result in a full review by, at minimum, the following individuals: the CPA employee’s immediate supervisor and CPA’s General Counsel. Factors that are considered in setting the disciplinary action plan include but are not limited to: source of violation discovery (self-reported, peer-reported, reported by a third party, via internal procedures, or the result of an audit), intent (accidental or intentional), type and magnitude of risk that the CPA employee exposed CPA to (financial, reputation, etc.), and frequency of the violation (first offense or history of multiple offenses).The disciplinary actions taken may involve demotion, loss of compensation (suspension without pay), and termination of employment.
I have read CPA’s Code of Marketing and Trading Practices, understand its requirements, and agree to abide by its provisions.
Signature Printed Name Date
Agenda Page 103
CPA Code of Marketing and Trading Practices, Version 1.1 (updated July 18, 2019)
Appendix G: CEO SIGNING AUTHORITY DELEGATION FORM
Signing Authority Delegated To:
Effective Date:
Expiration Date:
Product:
CPA Buys/Sells
Delivery and Maturity Term:
Maximum Volume (per transaction):
Maximum Price:
Maximum Notional (cumulative):
CEO and RMT Reporting – specify
intended date of report, data to be
reported, and frequency (required):
Other Notes/Guidelines:
Chief Executive Officer approval signature:
Agenda Page 104
Staff Report – Agenda Item 4
To: Board of Directors
From: Clarissa Chan, Senior Manager, Market Operations
Reviewed by: Lindsay Descagnia, Vice President, Power Supply Matthew Langer, Chief Operating Officer
Nancy Whang, General Counsel
Approved By: Ted Bardacke, Chief Executive Officer
Subject: Scheduling Coordinator Professional Services Agreement with Tenaska Power Services
Date: July 10, 2025
RECOMMENDATION
Approve and authorize the Chief Executive Officer to execute a Professional Services Agreement with Tenaska Power Services (TPS) for Scheduling Coordinator (SC) Services, Congestion Revenue Right (CRR) Services, Credit Risk Management, Risk Management, Load Forecasting, and Energy Storage Optimization Services for a three-year initial term with two optional successive one-year terms for a total not to exceed amount of $7.55 million for the total 5 year term (or approximately $1.5 million per year1).
BACKGROUND
A Scheduling Coordinator (SC) is an intermediary for buyers and sellers transacting in the California Independent System Operator (CAISO) marketplace. Specifically, SCs are entities certified by CAISO to submit bids to purchase energy, capacity, ancillary services, or other CAISO market products on behalf of load serving entities (LSEs) and generation 1 Total contract fees will be dependent on the number of generating resources in CPA’s portfolio, as described further in the Term and Pricing Section.
Agenda Page 105
Board of Directors Item 4
resource owners or off-takers. SCs also schedule and dispatch resources and fulfill contractual and financial obligations associated with CAISO settlement processes.
In July 2020, the Board authorized execution of a three-year agreement with two (2) optional one-year renewals with TPS for SC, middle office services and CRR portfolio management. The agreement was the result of a competitive Request for Proposals (RFP) process that included 7 bidders. CPA has exercised both one-year renewals; the current contract with TPS expires on December 31 of this year.
DISCUSSION
Solicitation
In anticipation of the expiration of the TPS agreement at the end of the current calendar year, on March 12, 2025 CPA issued an RFP for CAISO SC Services, CRR Services, Credit Risk Management, Risk Management, Load Forecasting, and Energy Storage Optimization Services (“2025 SC RFP”). Minimum experience and qualifications included:
• CAISO SC certification
• Qualifications and experience providing SC services for LSEs with loads greater than 1,000 GWh per year in CAISO
• Qualifications and experience providing SC services for generating assets including intermittent renewable and standalone and co-located energy storage resources.
• Qualifications and experience onboarding standalone and co-located energy storage resources through the CAISO New Resource Implementation (NRI) process.
• Qualifications and experience validating and monitoring CAISO outages for standalone and co-located energy storage resources.
Evaluation
CPA received proposals from three potential bidders in response to the 2025 SC RFP.
Agenda Page 106
Board of Directors Item 4
Proposals contained cost estimates ranging from $500k to $2.8MM3 annually, with additional fees for incremental portfolio growth. Based on staff’s review and evaluation, CPA shortlisted two proposals that satisfied the minimum qualifications and experience specified in the solicitation. CPA staff interviewed the two short-listed bidders.
Staff recommend TPS for the contract award based on its demonstrated readiness to support CPA’s growing operational complexity and evolving market needs. TPS’ proposal and interview reflected a clear understanding of CPA’s expansion with scalable services aligned with CPA’s portfolio growth over the next five years. TPS demonstrated active engagement in upcoming CAISO market changes, with system updates and preparation for simulation testing already underway. TPS’ approach to data access, offering direct application programming interface and database connectivity, supports CPA’s move toward real-time analytics. TPS’ experience bringing new BESS assets online and operating them reinforces their readiness to meet CPA’s needs today and in the future.
TPS’s pricing was in the median range amongst the proposals and was just 2.1% higher than the current 5-year-old contract while offering an increased level of service. The other proposals did not offer a comparable level of service and did not demonstrate the ability to fully deliver on the requested scope of services, and therefore, did not offer the Best Value to CPA.
TPS, a subsidiary of Tenaska, is a FERC-certified power marketing company established in 1997. TPS has served as a registered SC in the CAISO market since 2012 and is the current SC service provider for CPA. In addition to CPA, TPS currently supports three other Community Choice Aggregators in California, each with loads greater than 1,000 GWhs annually in the CAISO market. TPS brings broad experience across all generation technologies operating on the California grid, including various configurations of energy storage resources. The company has also demonstrated significant expertise in 3 The wide price range reflects differences in service levels, scope, and the varying costs of sublicensing. The lower-cost $500k proposal was not selected due to limited readiness for upcoming CAISO changes, concerns about experience with battery storage operations, and outdated data delivery methods.
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Board of Directors Item 4
onboarding storage assets, having successfully integrated 2,400 MWs of energy storage through the CAISO NRI process and over 50,000 MWs of renewable generation across the country.
Contract Overview
Scope of Services
The Scope of Services for the contract includes the following tasks:
• Scheduling Coordinator services, including all CAISO and Western Energy Coordinating Council (WECC) scheduling functions for CPA in Day-Ahead and Real-Time markets on a 24/7, 365 days per year basis including:
o Submittal of demand bids to CAISO markets based off daily forecasting o Submittal of supply bids and schedules to CAISO markets o Energy storage bidding optimization
o Resource management and outage scheduling
o New resource onboarding including facilitating assets through the CAISO NRI process
o Settlement validation and reporting
o Performance reporting and data
• CRR Services through congestion analytics and performance monitoring • Credit Risk Management through credit monitoring and reporting • Risk Management through portfolio risk analytics and financial modeling support • Load Forecasting Services
Terms and Pricing
The initial term of the agreement will commence on January 1, 2026 and continue through December 31, 2029. After the initial term, CPA has the option for two (2), one year renewal terms at the same price. Pricing is divided into annual fixed fees and monthly variable fees based on the number of generating and/or storage resources in CPA’s portfolio according to the chart below.
Agenda Page 108
Board of Directors Item 4
3 For variable fees, CPA assumes three additional resources will come online in 2027 and one more in 2029. Costs will vary based on the actual number of resources.
Under the current contract with TPS that expires at the end of the calendar year, CPA pays $861,300 annually in fixed fees. Variable monthly per resource fees are the same under the new proposed contract as they are under the current contract.
Other Key Contract Terms
• Termination – CPA has the right to terminate the agreement if TPS is providing unsatisfactory performance. Additionally, CPA has the right to terminate individual services, excluding SC services, if CPA decides to bring the services in house. • Performance Assurance – TPS is required to post a $1 million letter of credit to support its obligations under the agreement.
FISCAL IMPACT
The cost of the contract is incorporated into the FY 2025-26 budget. Costs for subsequent years will be included in future budget proposals.
ATTACHMENT
1. Scheduling Coordinator Agreement with Tenaska Power Services Services
Initial Term
(Yr 1)
Initial Term
(Yr 2)
Initial Term
(Yr 3)
Renewal
Term (Yr 4)
Renewal
Term (Yr 5)
SC Services for included resources $ 600,000 $ 600,000 $ 600,000 $ 600,000 $ 600,000 CRR Services $ 60,000 $ 60,000 $ 60,000 $ 60,000 $ 60,000 Credit Risk $ 90,000 $ 90,000 $ 90,000 $ 90,000 $ 90,000 Risk Management $ 90,000 $ 90,000 $ 90,000 $ 90,000 $ 90,000 Load Forecasting $ 39,300 $ 39,300 $ 39,300 $ 39,300 $ 39,300 Fixed-Price Fees Total $ 879,300 $ 879,300 $ 879,300 $ 879,300 $ 879,300 SC Services for additional resources
($2,500 per month per resource) $ 480,000 $ 570,000 $ 570,000 $ 600,000 $ 600,000 SCME/rsrc id
($500 per month per resource) $ 66,000 $ 66,000 $ 66,000 $ 66,000 $ 66,000 $ 1,425,300 $1,515,300 $1,515,300 $1,545,300 $1,545,300 TPS
Fixed-Price Fees Variable Fees
3 Total
$7,546,500
Agenda Page 109
Scheduling Coordinator Agreement – Page 1
SCHEDULING COORDINATOR AGREEMENT
This Scheduling Coordinator Agreement (“Agreement”) is made and entered into on January 1, 2026 (“Effective Date”), by and between CLEAN POWER ALLIANCE OF SOUTHERN CALIFORNIA, a California joint powers authority organized under the laws of the State of California (“CPA”) and TENASKA POWER SERVICES CO, a Nebraska corporation (“TPS”). CPA and TPS are sometimes individually referred to as a “Party” and collectively as “Parties.”
RECITALS
WHEREAS, TPS and CPA entered into that certain Amended and Restated Scheduling Coordinator Agreement dated June 21, 2024 (“Original Agreement”); WHEREAS, CPA serves customer load, and owns, controls and/or has power purchase agreements (“PPAs”) with generating facilities located within the CAISO market and which are described in Exhibit A of this Agreement (collectively, the “Resource”), and has requirements to fulfill as a community choice aggregation program (the “Project”); WHEREAS, TPS is in the business of providing Scheduling Coordinator services including scheduling Energy, load, Capacity, Ancillary Services, and managing Congestion Revenue Rights from electric generating facilities through the markets operated by CAISO; WHEREAS, TPS desires to perform certain Scheduling Coordinator services for the Resource and other services required by CPA as part of its Project on the terms and conditions as set forth in this Agreement;
WHEREAS, CPA desires to retain TPS to perform certain Scheduling Coordinator services for the Resource and Services, as defined below.
NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the Parties hereto hereby agree as follows:
AGREEMENT
1. Designation.
No Party will be an agent, partner, joint venturer, or legal representative of any other Party for any purpose whatsoever, and no Party is authorized to assume or create any obligation, liability, or responsibility, expressed or implied, on behalf of or in the name of any other Party, or to bind any other Party to any Third Party in any manner whatsoever; provided, however, that during the Term of this Agreement CPA authorizes TPS to act, and TPS agrees to act, as CPA’s Scheduling Coordinator in accordance with the terms of this Agreement, the Governing Rules, and Prudent Industry Practice.
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The relationship of CPA with TPS as set forth in this Agreement is one of an independent contractor.
2. Scope of Services and Term.
2.1 General Scope of Services. TPS promises and agrees to furnish to CPA all services, and incidental and customary work necessary to fully and adequately provide Scheduling Coordinator services, Congestion Revenue Rights management, and Middle Office services necessary for the Resource and Project(“Services”), which Services are more particularly described in Exhibit B. All Services shall be subject to, and performed in accordance with, this Agreement, the schedules and/or exhibits attached hereto, and all applicable Governing Rules and Applicable Laws.
2.2 Term. This Agreement shall be effective on the Effective Date. All Services and the obligation to pay fees under this Agreement shall be effective as of the Commencement Date unless provided otherwise in this Agreement. This Agreement shall have a primary term beginning on the Commencement Date and expiring at 11:59:59 PM EPT on December 31, 2029 (“Initial Term”). At the end of the Initial Term, the Parties may renew this Agreement for successive one (1) year terms for a maximum of two years (each, a “Renewal Term”), unless either Party provides six (6) Month prior written notice of its intent not to renew the term of the Agreement (“Renewal Notice”). TPS shall provide the Services within the term of this Agreement and shall meet all other established schedules and deadlines during the Renewal Notice period set forth above.
Notwithstanding the foregoing, this Agreement shall terminate as of the date that CAISO has confirmed that its systems no longer reflect TPS as the representative of the CPA SCID.
2.3 Authorized Early Termination Provisions. CPA may terminate this Agreement prior to the expiration of the Term without cost or penalty, other than the obligation to pay TPS any Service Fees due for Services prior to the termination date, under the following two circumstances:
(a) Early Termination Related to Unsatisfactory Performance. If on two or more occasions within a Calendar Quarter, CPA experiences an Event of Unsatisfactory Performance, CPA may notify TPS of its dissatisfaction detailing the events or circumstances giving rise to its dissatisfaction, the steps proposed for TPS to avoid any future Events, and require TPS to provide CPA with a plan for improving TPS's performance which specifically addresses steps TPS will take to avoid future Events ("Performance Improvement Plan"). TPS shall have ten (10) calendar days to submit a Performance Improvement Plan to CPA for CPA’s reasonable approval and acceptance. If CPA is not reasonably satisfied that the proposed Performance Improvement Plan will remedy the causes of the Events of Unsatisfactory Performance, the Parties shall meet and confer and mutually agree upon changes to the Performance Improvement Plan. Upon CPA approval of the Performance Improvement Plan, TPS shall promptly commence implementation of the Performance Improvement Plan and complete implementation within sixty (60) days to CPA’s reasonable satisfaction. If the Performance Improvement Plan has failed to materially improve the TPS performance level and remove CPA's cause for dissatisfaction, CPA may terminate this Agreement by sending TPS ten (10) days written notice of termination. If CPA has not acted to notify TPS of an Event giving
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rise to its dissatisfaction within one hundred twenty (120) calendar days after the discovery of the Event, then CPA shall have waived any claim of dissatisfaction based on such Event, and shall be barred from using such Event as a cause for termination.
(b) Limited Termination of Selected Services. In the event CPA decides to perform for itself certain of the Services performed by TPS under this Agreement, CPA may send TPS a ninety (90) day notice of termination of the particular Service or Services which CPA has determined to perform for itself without TPS assistance, and TPS shall cease performing such Services on the first day after such ninety (90) day notice period which is the first of a Month; provided, however, that CPA may not terminate the Services identified in Exhibit B under Sections A1 through A10.
3. Responsibilities of TPS.
3.1 Schedule of Services. TPS shall perform the Services expeditiously, within the Term of this Agreement, and in accordance with the terms of Exhibit B. TPS represents and warrants that it has the professional and technical personnel required to perform the Services in conformance with such conditions.
4. Performance Obligations.
4.1 CPA SCID. CPA represents and warrants that it is a registered Scheduling Coordinator at CAISO and has its own SCID to be used for this Project and Services, or will achieve such status by the Commencement Date, with the assistance of TPS as described in Exhibit B. CPA will maintain its SCID throughout the Term of this Agreement. Under this SCID, CPA will be receiving payments from and making payments to CAISO. CPA maintaining its own SCID through the Term of this Agreement is a condition precedent to TPS’s obligation to provide the Services listed in Exhibit B. TPS will manage CPA’s SCID as CPA’s agent; provided however, CPA must inform TPS of any Transaction sufficiently in advance of any applicable CAISO deadline for scheduling Transactions.
4.2 Information and Assistance. CPA shall provide such information and assistance as is reasonably required for TPS to provide the Services. If CPA fails to provide TPS with such requested information or assistance, then TPS shall continue to provide in a timely manner any such portion(s) of the affected Services that TPS can reasonably provide to the extent possible in the absence of such information or assistance.
4.3 Commencement. Upon execution of this Agreement, CPA and TPS shall use commercially reasonable efforts to complete and submit any and all documentation and fulfill any other steps required by CAISO, authorizing TPS to represent the CPA SCID in order to provide Services in accordance with the terms herein and applicable Governing Rules. TPS’s obligations to perform Services under this Agreement shall not commence until the Commencement Date.
4.4 CPA’s Representative. CPA shall designate in Exhibit D at least one representative (“CPA’s Representative(s)”). CPA’s Representative(s) shall be authorized and empowered to act for and on behalf of CPA as to all obligations of CPA hereunder. CPA may change CPA’s Representative(s) from time-to-time. TPS shall be entitled to rely upon, and CPA shall be bound
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by, the oral and written communications, directions, requests and decisions made by CPA’s Representative(s) with regard to this Agreement.
4.5 TPS’s Representative. TPS shall designate in Exhibit D at least one representative (“TPS’s Representative(s)”). TPS’s Representative(s) shall be authorized and empowered to act for and on behalf of TPS as to all obligations of TPS hereunder. TPS may change TPS’s Representative(s) from time-to-time. CPA shall be entitled to rely upon, and TPS shall be bound by, the oral and written communications, directions, requests and decisions made by TPS’s Representative(s) with regard to this Agreement.
4.6 Coordination of Services. TPS agrees to work closely with CPA staff in the performance of Services and shall be available to CPA’s staff, consultants and other staff at all reasonable times, and as defined in Exhibit B.
4.7 Standard of Performance Obligations. TPS shall perform the Services in good faith and in a good, workmanlike and commercially reasonable manner, employing commercially reasonable efforts to provide the Services in a timely and accurate manner, and in accordance with (i) Prudent Industry Practice, acting as if it were managing the Resource for its own account (recognizing that TPS has no control or decision-making authority over the Resource), (ii) instructions from CPA, (iii) all Applicable Laws, including the Governing Rules, (iv) the terms of this Agreement, and (v) CPA risk management policies and protocols, including, but not limited to, policies and protocols relating to the management of energy risks, CRRs and counterparty credit, and customer data and privacy, as those policies and protocols may be amended by CPA from time to time. CPA will provide TPS with written copies of such policies and protocols, and any amendments thereto, and will train TPS personnel in the administration and application of such policies and protocols. CPA will have knowledgeable personnel available to answer questions TPS personnel may have concerning the interpretation and application of such policies and protocols to particular circumstances.
4.8 Laws and Regulations. The Parties shall keep fully informed of and in compliance with all Applicable Laws and Governing Rules that in any manner affect the performance of the Project or the Services, and shall give all notices required by law.
4.9 Exclusivity. For the CPA SCID, subject to the other terms and conditions of this Agreement, CPA grants TPS the exclusive right to:
(a) act as CPA’s provider of Services as follows:
(i) to act as representative for CPA’s SCID for the Resource and load designated in Exhibit A,
(ii) CPA will cause all Transactions to be scheduled through and with TPS, and (iii) CPA will not schedule CPA’s Transactions directly with CAISO, or through any other Person except TPS, as long as there is no Force Majeure event or Event of Default with respect to TPS;
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(b) serve as representative for CPA’s SCID for the purpose of representing CPA in communications and Transactions with CAISO;
(c) schedule the Products on behalf of CPA’s SCID per CPA’s instructions as described in this Agreement; and
(d) administer the purchase or sale of Products from the CPA SCID into CAISO, and arrange for sales to and purchases from other Third Parties in accordance with the terms and conditions of this Agreement and the Governing Rules.
Nothing in this section shall limit CPA’s right to purchase and settle Transactions outside the CAISO or to have Transactions scheduled by Third Parties (where CPA is not Scheduling Coordinator) and/or traded to CPA’s SCID via an Inter-SC Trade.
4.10 Other Obligations. CPA retains all other rights, obligations and responsibilities CPA may have under the Governing Rules not specifically designated in this Agreement to be performed solely by TPS as representative of the CPA SCID.
4.11 Performance Assurance: Within thirty (30) days of the Effective Date of this Agreement, TPS will post a Letter of Credit in the amount of one million dollars ($1,000,000).
CPA may draw on the Letter of Credit to cover unpaid amounts, including damages, for which CPA has invoiced TPS and TPS has failed to pay within twenty (20) days of receiving such invoice, subject to any applicable cure period. In the event of a dispute as to whether such amounts are due, CPA may draw upon the Letter of Credit after a final and non-appealable determination by a jurisdictional court that such amounts are due; provided, however, that if the Letter of Credit is due to expire in twenty (20) Business Days or less and such final and non-appealable determination has not been received, CPA may draw on the Letter of Credit for the amounts in dispute; provided further, however, in the event the Letter of Credit is renewed by the expiration date stated therein, CPA shall refund the drawn amounts to TPS. In the event the Letter of Credit is drawn upon, TPS shall replenish the Letter of Credit up to the one million dollar ($1,000,000) amount within five (5) Business Days of such draw.
5. Equipment and Data Transmission.
5.1 Data Transmission. The Parties will work with the owners or operators of contracted generation resources to ensure that TPS may receive or access telemetered data for these resources. In the event additional communications services or equipment are required for TPS to obtain such data, CPA will either acquire such equipment for TPS or reimburse TPS for its authorized Reimbursable Amounts.
6. Fees, Payments and Security.
6.1. Compensation. TPS shall receive compensation, including authorized Reimbursable Amounts, for Services rendered under this Agreement, beginning on or after the Commencement Date, and at the rates set forth in Exhibit C.
6.2 Payment of Compensation. TPS shall submit to CPA a monthly itemized invoice which shall include all authorized Reimbursable Amounts and fees related to Services performed during the
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previous Month no later than thirty (30) days after the previous Month. CPA shall, within twenty (20) days of receiving such invoice, review the invoice and pay all undisputed charges thereon.
7. Settlements, Reimbursable Amounts, and Accounting Records.
7.1 Reimbursable Amounts. In order for any amount to qualify as a Reimbursable Amount, TPS shall provide prior notice to CPA of the rationale for and the amounts of the proposed costs, including documentation as CPA may reasonably require to verify the reasonableness of and need for the costs, and TPS shall not incur such costs unless CPA has authorized the costs in writing.
CPA shall reimburse TPS for all Reimbursable Amounts for up to one hundred thousand dollars ($100,000.00) over the Term of the Agreement (“Reimbursable Amount Limit”). TPS shall notify CPA when the Reimbursable Amount Limit is within twenty thousand dollars ($20,000) of being reached. CPA shall either authorize TPS to exceed the Reimbursable Amount Limit or TPS will cancel any Third Party contracts or Services that had been previously approved by CPA. With regard to Third Party contracts or Services that had been previously approved by CPA and which cannot reasonably be performed by TPS due to the lack of authorization to exceed the Reimbursement Amount Limit, CPA agrees that CPA will assume responsibility for contracting with such Third Parties directly or will perform such Services internally, and TPS shall no longer have responsibility for incurring such Third Party expenses.
7.2 No Liability for CAISO Payments. TPS shall have no obligation to make payments to CAISO on CPA’s behalf. CPA shall be responsible for any payment obligations to CAISO.
7.3 Audit and Invoice Adjustments.
(a) Each Party has the right, at its sole expense and during normal working hours and upon reasonable written notice to the other Party, to examine copies of the relevant portions of the records as necessary to verify the accuracy of any invoice, charge, or computation made pursuant to this Agreement. If any such examination reveals any inaccuracy in any invoice, the necessary adjustments in such invoice and associated payments will be promptly made together with interest at the Interest Rate, if applicable, from the original date of payment. (b) No adjustment for any invoice or payment will be made unless objection to its accuracy is made prior to the lapse of two (2) years from the date that such invoice was delivered.
No adjustment will be made to invoices or summaries related to CAISO settlement statements that CAISO has deemed final under the Governing Rules. In addition, adjustments to any invoice may be made up to four (4) years from the date that the particular Services were completed to adjust for (a) corrections made by CAISO to prior CAISO statements and (b) tax claims.
(c) This Section 7.3 of this Agreement survives any termination of the Agreement for a period of four (4) years from the date of such termination for the purpose of the right to examine records and such invoice and payment objections and corrections.
8. Intellectual Property and Confidentiality.
CPA owns all right, title and interest in and to all CPA Materials. Upon the expiration of this Agreement, or in the event of termination, CPA Materials and all CPA customer data, in
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whatever form and in any state of completion, shall remain the property of CPA and shall be promptly returned to CPA; provided however, notwithstanding the other terms of this Agreement related to the return or destruction of Confidential Information (which shall include the CPA Materials), the receiving Party is not obligated to remove the Confidential Information from its backed-up electronic records outside of normally scheduled retention policies, provided receiving Party does not make use of the Confidential Information. CPA Materials shall mean any and all data, materials, or writings gathered or created by TPS or transmitted to TPS specifically for CPA in the performance of the Services pursuant to this Agreement (“CPA Materials”).
For the avoidance of doubt, TPS’s intellectual property, including, but not limited to, TPS’s trademarks, service marks, trade names and other designations, web site(s), web design(s), internal systems, computer systems, programs, software (including software code), ideas, know-how, work product, copyrights, patents, trade secrets and other proprietary and/or intellectual property shall remain the exclusive property of TPS.
9. Confidentiality.
(A) Subject to the remaining provisions of this Section, each Party agrees, for itself, its Affiliates, and its Representatives, to keep confidential this Agreement’s terms and conditions, all negotiations concerning this Agreement, and all other information furnished by either Party related to schedules, Services and Transactions under this Agreement unless the information (i) is required to be disclosed to effect the requested Transaction or to enforce a Party’s rights under the Agreement, (ii) is required to be disclosed by lenders, insurers, or underwriters in connection with financing, or (iii) is required to be disclosed pursuant to Applicable Law including the California Public Records Act or the Governing Rules ("Confidential Information"). This confidentiality obligation will expire three (3) years past the expiration or termination of this Agreement. (B) Subject to Section 9 (A) of this Agreement, the receiving Party, its Affiliates, and its Representatives must not disclose any Confidential Information to any Third Party without the prior written consent of the disclosing Party unless requested or required by an agency, court, or other governing body, or as permitted in accordance hereof. In the event of an authorized disclosure, the disclosing Party must require such Third Party to agree to treat the Confidential Information in accordance with this Agreement.
(C) In the event any Party is requested or required to disclose such Confidential Information by law or by a court, agency, or other governing body having or purporting to have jurisdiction over the Party, to the extent permitted by law such Party must notify the other Party prior to any disclosure but no later than three (3) Business Days of receipt of the request and shall use reasonable efforts not to disclose any Confidential Information so as to allow the other Party to contest such disclosure before the governing body or to seek appropriate protection from further disclosure.
Each Party shall reasonably cooperate with the other when one Party seeks to contest such disclosure.
(D) The Parties agree that disclosure of Confidential Information in breach of the confidentiality provisions of this Agreement constitutes an irreparable injury and that injunctive relief is an appropriate remedy to prevent the unwarranted disclosure of any Confidential Information.
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(E) The confidentiality provisions of this Agreement will not apply to any information (i) the receiving Party developed independently without using the Confidential Information, (ii) that was in the public domain at the time of its disclosure, (iii) which passes into the public domain by acts other than the acts of or caused by the Party receiving said Confidential Information, or (iv) is disclosed to the receiving Party by a Third Party, provided that the receiving Party does not know (or has no reasonable basis to know) that the information was received or disclosed unlawfully.
10. Insurance.
All required insurance coverages shall be substantiated with a certificate of insurance and must be signed by the insurer or its representative evidencing such insurance to CPA. The general liability policy shall be endorsed naming Clean Power Alliance of Southern California and its employees, officers and agents as additional insureds to the extent of TPS’ indemnity obligations herein. Such additional insured endorsement may be provided by a blanket additional insured endorsement. The certificate(s) of insurance shall be furnished to CPA prior to the Commencement Date. Each certificate shall provide for thirty (30) days advance written notice to CPA of any cancellation or reduction in coverage, except for non-payment of premium which shall be ten (10) days prior notice. In the event TPS’ insurer will not provide such notice, TPS shall provide such notice to CPA. Said coverage shall remain in force through the life of this Agreement and shall be payable on a per occurrence or claims-made basis.
Failure to provide and maintain the insurance required by this Agreement will constitute a material breach of the Agreement. In addition to any other available remedies, CPA may suspend payment to the Consultant for any services provided during any time that insurance was not in effect and until such time as the Consultant provides adequate evidence that Consultant has obtained the required coverage.
10.1. General Liability
TPS shall maintain a commercial general liability insurance policy in an amount of no less than two million dollars ($2,000,000) with a five million dollar ($5,000,000) aggregate limit. Such requirement for general liability insurance may be met through any combination of primary and excess policies. CPA shall be named as an additional insured on the commercial general liability policy.
11. Dispute Resolution.
11.1. In the event of any claim, controversy or dispute between the Parties arising out of or relating to or in connection with this Agreement (“Dispute”), a Party (the “Notifying Party”) may deliver to the other Party (the “Recipient Party”) notice of the Dispute with a detailed written description of the underlying circumstances of such Dispute (a “Dispute Notice”) and the requested remedy or relief.
11.2. Following delivery of the Dispute Notice, representatives of the Parties shall meet and confer as often as they deem reasonably necessary for a thirty (30) day period and engage in good faith negotiations to resolve the Dispute to the satisfaction of each Party.
11.3. In the event a Dispute is not resolved pursuant to the procedures set forth in this section by the expiration of the thirty (30) day period, then either Party may pursue any legal remedy available.
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12. Indemnification, Liabilities, and Warranty Disclaimer.
12.1 INDEMNITIES. EACH PARTY UNDERSTANDS AND AGREES THAT IT
SHALL DEFEND, RELEASE, INDEMNIFY, AND HOLD THE OTHER PARTY (INCLUDING SUCH PARTY’S OWNERS, AFFILIATES, AND REPRESENTATIVES) HARMLESS FROM
ALL THIRD PARTY LIABILITIES, COSTS, CLAIMS, LOSSES, OR CAUSES OF ACTION
ARISING FROM (A) PERSONAL INJURY, (B) PROPERTY LOSS, (C) PROPERTY DAMAGE,
OR (D) DEATH, HOWEVER CAUSED, AND RELATED TO ANY EVENT, CIRCUMSTANCE,
ACT OR INCIDENT FIRST OCCURRING OR EXISTING DURING THE PERIOD OF TIME
WHEN CONTROL AND TITLE TO ANY PRODUCT IS VESTED IN SUCH INDEMNIFYING PARTY.
12.2 LIMITATION OF LIABILITY. EXCEPT AS SPECIFICALLY PROVIDED IN
THIS AGREEMENT, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR
ANY CONSEQUENTIAL, INDIRECT, PUNITIVE, LOST PROFIT, LOST OPPORTUNITY, OR
EXEMPLARY DAMAGES FOR ANY CLAIM OR CAUSE OF ACTION RELATED TO THIS
AGREEMENT, WHETHER ARISING FROM BREACH OF CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY), STATUTE, OR OTHERWISE.
MOREOVER, NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, UNLESS THE CLAIMS OR OBLIGATIONS ARE CAUSED BY TPS’
WILLFUL MISCONDUCT OR GROSS NEGLIGENCE, THE LIABILITY OF TPS TO CPA FOR
ANY OBLIGATIONS, INCLUDING INDEMNITIES, UNDER THIS AGREEMENT SHALL BE
LIMITED IN AGGREGATE TO ONE MILLION TWO HUNDRED THOUSAND DOLLARS ($1,200,000.00) PROVIDED THAT NOTHING CONTAINED IN THIS SECTION 12.2 CHANGES THE OBLIGATIONS SET FORTH IN SECTION 4.11.
12.3 WARRANTY DISCLAIMER. EXCEPT FOR THE EXPRESS WARRANTIES
SET FORTH IN THIS AGREEMENT, TPS DOES NOT MAKE, AND HEREBY DISCLAIMS,
ANY AND ALL OTHER EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT
LIMITED TO WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, NON-INFRINGEMENT AND TITLE, AND ANY WARRANTIES ARISING FROM
A COURSE OF DEALING, USAGE, OR TRADE PRACTICE (OTHER THAN PRUDENT OPERATING PRACTICE). SOME OF THE SERVICES WILL BE PROVIDED THROUGH
COMPUTER HARDWARE, SOFTWARE SYSTEMS, AND TELECOMMUNICATIONS
SYSTEMS LICENSED FROM THIRD PARTIES, AND TPS RELIES UPON CONTINUING
UNINTERRUPTED ELECTRONIC AND TELEPHONE SERVICE FROM THIRD PARTY UTILITIES AT TPS’ SITE. TPS CANNOT CONTROL THE PRODUCTS AND SERVICES OF SUCH THIRD PARTIES. ACCORDINGLY, TPS DOES NOT WARRANT THAT THE
SERVICES WILL BE UNINTERRUPTED, ERROR-FREE OR COMPLETELY SECURE
WHEN RELYING UPON THE COMPUTER HARDWARE, SOFTWARE SYSTEMS,
ELECTRICITY SERVICE, AND TELECOMMUNICATIONS SYSTEMS AND SERVICES OF THIRD PARTIES.
12.4 ADDITIONAL INDEMNITIES. AN INDEMNIFYING PARTY’S INDEMNITY
OBLIGATIONS, AND ANY WAIVERS AND RELEASES OF CLAIMS IN THIS AGREEMENT
WILL EXTEND TO THE INDEMNIFIED PARTY, ITS AFFILIATED COMPANIES,
INCLUDING ANY ENTITY CONTROLLING, UNDER THE CONTROL OF, OR UNDER
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COMMON CONTROL WITH SUCH PARTY, AND TO THE RESPECTIVE OFFICERS,
DIRECTORS, EMPLOYEES, OWNERS, SHAREHOLDERS AND INSURERS OF EACH THEREOF.
13. Defaults and Remedies.
13.1 Events of Default. A Party will be in default under this Agreement upon the occurrence of any one or more of the following events (an “Event of Default”):
(a) the failure by a Party to make a timely payment of any amounts due or provide required credit support to the other Party under this Agreement; (b) the failure of a Party to perform its obligations under this Agreement; which failure causes CAISO to suspend or disqualify the Resource or the Scheduling Coordinator from market participation;
(c) the failure by a Party to materially perform any other provision of this Agreement, which failure is not excused by its terms;
(d) the appointment (voluntary or involuntary) of a receiver or liquidator or trustee of such Party or of any of the property of such Party by order of a court of competent jurisdiction;
(e) the filing of a petition or consent seeking relief or assisting in seeking relief in a proceeding under any of the provisions of federal or state bankruptcy or insolvency laws, as any such laws now exist or as those laws may be amended, or the filing of an answer admitting the material allegations of a petition filed against it in such proceeding; the general assignment by a Party for the benefit of its creditors; or the admission by a Party in writing of its inability to pay its debts generally as they become due; and/or (f) Any violation of Exhibit E that occurs twice or more in any single calendar year.
13.2 Rights of Non-Defaulting Party. If an Event of Default shall have occurred and be continuing with respect to a Party (the “Defaulting Party”), the Party not in default (“Non-Defaulting Party”) shall have the right to take any one or more, or all of the following actions:
(a) upon the occurrence of an Event of Default specified under Section 13.1(a) or
13.1(b), to terminate this Agreement, after giving the Defaulting Party written notice setting forth a description of the Event of Default and providing five (5) Business Days in which to cure the Event of Default;
(b) upon the occurrence of an Event of Default specified under Section 13.1(c), to terminate this Agreement after giving the defaulting Party written notice setting forth a description of the Event of Default and providing fifteen (15) days in which to cure the Event of Default;
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(c) upon the occurrence of any Event of Default as specified in Section 13.1(c), to suspend performance after giving the defaulting Party written notice setting forth a description of the Event of Default, and providing five (5) Business Days in which to cure the Event of Default;
(d) upon the occurrence of an Event of Default specified in Sections 13.1 (d), (e) or (f) to terminate this Agreement immediately; provided that with regard to 13.1(d) or (e), CPA may cure the default by providing performance assurance as reasonably requested by TPS for fulfillment of CPA’s payment obligations to TPS and show evidence that it has agreed in the bankruptcy proceeding to assume performance of the Agreement. (e) to pursue collection of actual damages and seek any other remedy at law or in equity (except to the extent limited by, or waived under, this Agreement); and/or
(f) to pursue any other remedy provided under this Agreement.
14. Governing Rules.
14.1 Governing Rules. Both Parties agree to abide by all rules, market guides, tariffs, protocols, business practice manuals, and any applicable rules or directives of CAISO, transmission service provider, market monitor, any reliability entity, NERC, or any of their successors, and CPA’s Board of Directors, as may be amended from time to time provided CPA’s Board of Directors rules are provided to TPS (collectively “Governing Rules”). For purposes of determining responsibility and rights of the Parties at any given time, in addition to the terms and conditions of this Agreement, the Governing Rules which are in effect at the time of performance or non-performance of an action, subject to the continuation of any grandfathered provisions, will govern with respect to that action. In the event of a conflict between the Governing Rules and the terms and conditions set forth in this Agreement, the Governing Rules will prevail.
14.2 NERC Compliance. TPS will use commercially reasonable efforts to assist CPA in any audit of CPA initiated by a regional reliability coordinator, or NERC including preparation of responses to the regional reliability coordinator or NERC data requests related to NERC standards for which TPS has information useful to CPA for the demonstration of compliance. Nothing contained in this Agreement will be construed to make TPS a GO, GOP, or any similar entity, or to make TPS subject to any classification under applicable NERC rules as a result of TPS’s execution of this Agreement or TPS’s performance of the Services or otherwise. As between the Parties, CPA will be responsible for meeting any GO, GOP, or LSE requirements or for arranging for a party other than TPS to assume that responsibility. In the event NERC, a regional reliability entity, or other party seeks to designate TPS in any of these categories, CPA will defend and indemnify TPS from such designation, and cause itself or a Third Party to accept such designation in lieu of TPS.
14.3 Compliance with Laws. TPS and CPA will at all times comply in all material aspects with all Governing Rules and Applicable Laws. In the event that actions or omissions of one Party (“Responsible Party”) cause the other Party (“Affected Party”) to (A) be materially non-compliant with the Governing Rules or Applicable Laws, or (B) have assessed or brought against it any fines, penalties, reprimands, censures, sanctions, assessments, or other material adverse actions by
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CAISO, market monitor, or any other regulatory authority (“Assessments”) (which, for the avoidance of doubt, will not include ordinary course settlement charges or penalties, such as imbalance penalties or charges, mismatched schedule charges, uninstructed deviation charges, or late fees), then, in addition to any other rights or remedies under this Agreement (including the right, if any, to indemnification against such Assessments), the Affected Party may exercise any or all of the following:
(a) may give written notice to the Responsible Party setting forth the circumstances of non-compliance and, if cure is practicable, demanding cure; (b) must use commercially reasonable efforts to cooperate with the Responsible Party in its defense against such allegation or Assessment (provided the foregoing will not require the Affected Party to incur material expenses, unless reimbursed by the Responsible Party, nor take any position in any regulatory proceeding contrary to its interests or policies); or
(c) may, once the adverse determination of the applicable regulatory authority is final, terminate this Agreement with written notice to the Responsible Party, with termination to take effect as soon as CAISO completes system changes to terminate TPS as the provider of Services for CPA.
The Responsible Party for such Assessments will reimburse the Affected Party for Assessments paid by the Affected Party; provided, however, TPS’s payment obligation hereunder will be governed by Section 12.2.
14.4 Change in Laws or Regulations. In the event a change in Applicable Laws or the Governing Rules (i) materially impairs a Party’s ability to perform under this Agreement, (ii) materially increases a Party’s costs or risks of performing under this agreement, (iii) materially decreases the economic benefits obtained by a Party under this Agreement, or (iv) subjects a Party to adverse or potentially adverse regulatory effects, the adversely affected Party may notify the other Party of the adverse effect and propose amendments to this Agreement to address the adverse effect of the change in Applicable Laws or Governing Rules. The Parties will negotiate in good faith to amend the Agreement to restore the Parties to the relative economic values and risk position each had enjoyed under the Agreement prior to the change in Applicable Laws or Governing Rules.
If the Parties have not reached agreement on an amendment by the thirtieth (30th) day after the effectiveness of the notice sent by the affected Party, then the affected Party may terminate the Agreement upon thirty (30) days written notice (“Permitted Termination”). Neither Party will owe damages to the other Party in the event of a Permitted Termination.
15. Force Majeure and Due Diligence.
15.1 Force Majeure. Subject to Section 15.2, neither Party will be considered to be in default in the performance of any obligations under this Agreement (other than the obligation to make a payment of amounts owed) when a failure of performance results from Force Majeure. The term “Force Majeure” means causes that are beyond the control of the Party affected which, by exercise of due diligence, such Party could not reasonably have been expected to avoid and which, by exercise of due diligence, it has been unable to overcome and not the result of the fault or negligence of such Party including, but not limited to: flood, earthquake, tornado, hurricane, storm,
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or fire; acts of terrorism; civil disobedience, strikes, or other labor dispute; labor or material shortage; sabotage; restraint, order, rule, or regulation of any court, governmental body, or public authority (whether valid or invalid); equipment malfunction or failure not caused by the Party claiming Force Majeure (including computer hardware or software malfunction); loss or disruption of essential office equipment and services, such as loss or disruption of electric power, telephone service, internet, or satellite communications; epidemic, pandemic, or other public health emergency or governmental response thereto.
15.2 Due Diligence. No Party, however, shall be relieved of liability for failure of performance hereunder based on Force Majeure if such failure is due to causes arising out of its own negligence or due to removable or remediable causes which it fails to remove or remedy within a reasonable time period. A Party claiming Force Majeure will exercise due diligence to overcome the Force Majeure event. Either Party rendered unable to fulfill any of its obligations under this Agreement by reason of Force Majeure shall give prompt written notice of such fact to the other Party, and as soon as practicable thereafter shall provide a detailed written explanation of the claim of Force Majeure, and shall exercise due diligence to remove such inability with all reasonable dispatch.
15.3 Obligations During Force Majeure. Notwithstanding any other provisions as stated in this Section 15, an event of Force Majeure does not relieve a Party of any of its obligations under the Governing Rules and this Agreement that the Party can reasonably perform during a Force Majeure event, and does not excuse a Party of its obligations to make payments for obligations arising prior to the Force Majeure event, or of any obligations for non-performance arising pursuant to the Governing Rules and this Agreement.
16. Delivery of Notices.
Unless otherwise provided in this Agreement, any notices given under this Agreement must be in writing and personally delivered by hand, overnight courier, or e-mail, to such Persons at the locations designated on Exhibit D and will be deemed given and effective as indicated below:
(a) if in writing and delivered in person or by courier, on the date it is delivered; (b) if sent by e-mail, on the date it is delivered;
unless the date of that delivery (or attempted delivery) or that receipt, as applicable, is not a Business Day or that communication is delivered (or attempted) or received, as applicable, after the close of business on a Business Day, in which case that communication will be deemed given and effective on the first following day that is a Business Day.
17. Miscellaneous.
17.1 Disclaimer. This Agreement does not constitute, create, give effect to, or otherwise recognize or imply the existence of a joint venture, pooling arrangement association, partnership, or other formal or informal business organization of any kind among the Parties, and the rights and obligations of the Parties will be limited to those set forth in this Agreement.
17.2 Entire Agreement. This Agreement contains the entire Agreement of the Parties with respect to the subject matter hereof, and supersedes all prior negotiations,
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understandings or agreements, including the Original Agreement. This Agreement may only be modified by a writing signed by both Parties.
17.3 Governing Law. This Agreement and all matters and claims arising under or relating to this Agreement shall be governed and construed in accordance with the laws of the State of California and venued in a state or federal court located in the County of Los Angeles.
17.4 Successors and Assigns. This Agreement shall be binding on the successors and assigns of the Parties.
17.5 Assignment or Transfer. Neither Party shall assign, hypothecate, or transfer, either directly or by operation of law, this Agreement or any interest herein without the prior written consent of the other Party. Any attempt to do so shall be null and void, and any assignees, hypothecates or transferees shall acquire no right or interest by reason of such attempted assignment, hypothecation or transfer. Notwithstanding the foregoing, the Parties agree that in the absence of a merger, the sale or transfer of all or substantially all of the shares of the other Party shall not constitute an assignment or transfer of this Agreement.
17.6 Construction: References; Captions. Since the Parties have participated fully in the preparation of this Agreement, the language of this Agreement shall be construed simply, according to its fair meaning, and not strictly for or against any Party. Any term referencing time, days or period for performance shall be deemed calendar days and not Business Days unless specified as Business Days. The captions of the various articles and paragraphs are for convenience and ease of reference only, and do not define, limit, augment, or describe the scope, content, or intent of this Agreement.
17.7 Amendment; Modification. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing and signed by both Parties.
17.8 Remedies Cumulative; Waiver. The rights and remedies of the Parties are cumulative and not alternative. Neither any failure nor any delay by any Party in exercising any right, power or privilege under this Agreement will operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege will preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege.
17.9 No Third-Party Beneficiaries. There are no intended third-party beneficiaries of any right or obligation assumed by the Parties.
17.10 Invalidity; Severability. If any portion of this Agreement is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect. In the event any provision of this Agreement is declared invalid, the Parties shall promptly negotiate to restore this Agreement as near as possible to its original intent.
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17.11 No Fiduciary Duty. Both Parties recognize the commercial nature of this Agreement and neither Party will owe any essential fiduciary duty to the other Party or any Third Party with respect to the performance of any of its obligations hereunder.
17.12 Authority to Enter Agreement. Both Parties have all requisite power and authority to conduct their business and to execute, deliver, and perform the Agreement. Each Party warrants that the individuals who have signed this Agreement have the legal power, right, and authority to make this Agreement and bind each respective Party.
17.13 Counterparts. This Agreement may be executed in multiple counterparts, including facsimile(s) or emails, each one of which will be considered an original Agreement, but all of which together will constitute one and the same instrument.
17.14 Conflict of Interest. TPS shall not compete with or against CPA or use information it obtains from CPA for its own account or for the account of others. CPA acknowledges and agrees that this Agreement shall not preclude TPS from providing services or making purchases and sales of a like nature to any other Person, either currently or in the future.
TPS shall issue to its traders the trading restrictions shown in the attached Exhibit E. TPS will instruct its traders to follow the attached restrictions or face disciplinary actions. TPS shall inform CPA of any violations of the trading restrictions in Exhibit E no later than 10 days following the discovery of the violation and TPS’ actions with respect to traders who may have violated such restrictions. Beginning on January 1, 2021 and semiannually thereafter, TPS will provide CPA with a letter signed by its Controller or equivalent confirming compliance with this section in a form reasonably agreeable to CPA. TPS agrees and acknowledges that this provision is an express and absolute condition of this Agreement, is bargained for consideration and is not a mere recital. Any violation of this Section 17.14 shall constitute a material breach of this Agreement.
17.15 Waiver. No waiver by either Party of any one or more defaults by the other in the performance of any provisions of this Agreement shall be construed as a waiver of any other default or defaults whether of a like kind or different nature. Neither any failure nor any delay by any Party in exercising any right, power, or privilege hereunder will operate as a waiver of such right, power, or privilege, and no single or partial exercise of any such right, power, or privilege will preclude any other or further exercise of such right, power, or privilege or the exercise of any other right, power, or privilege. Failure by a Party to enforce any of the terms, covenants, conditions, or other provisions of this Agreement at any time will not in any way affect, limit, modify, or waive that Party’s right thereafter to enforce strict compliance with every term, covenant, or condition of this Agreement, notwithstanding any course of dealing or custom of the trade.
17.16 Recordings. CPA acknowledges and understands that TPS normally records the telephone discussions and electronic messages of its Trading, Energy Management and Operations groups (the “TPS Groups”). As such CPA consents to the recording and retention of any telephone conversation or electronic message between CPA and the TPS Groups, and CPA will obtain any required consents to such recordings from its affected personnel, consultants, or agents. CPA waives any further notice of any such recording. Additionally, each Party consents to the retention of any e-mail between the Parties, and each Party will obtain any required consents to such retention from its affected personnel, contractors or agents. TPS consents to the recording
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and retention of any telephone conversations or electronic message between TPS and CPA, and TPS will obtain any required consents to such recordings from its affected personnel, contractors, or agents. TPS waives any further notice of any such recording.
18. Definitions.
As used in this Agreement, the following capitalized terms have the meaning set forth below:
“Additional Resources” has the meaning set forth in Exhibit C “Affected Party” has the meaning given that term in Section 14.3. “Agreement” has the meaning assigned to such term in the first paragraph of this Agreement. “Ancillary Services” means all current and future products and services defined by CAISO in CAISO Protocols that are necessary to support the transmission and distribution of electric energy from point of generation to point of delivery while maintaining reliable operation of the transmission system or which are commonly sold or traded in the market served by CAISO, which may include spinning reserves, non-spinning reserves, regulation up, regulation down, and any other ancillary services, but specifically excluding Resource Adequacy Capacity. “Applicable Laws” means any act, statute, law, regulation, permit, license, ordinance, rule, judgment, order, decree, directive, guideline, or policy (to the extent mandatory) or any similar form of decision or determination by, or any interpretation or administration of, any of the foregoing by any governmental authority with jurisdiction over the Resource, TPS, CPA, or the Services to be performed under this Agreement.
“Assessments” has the meaning set forth in Section 14.3. “CAISO” means the California Independent System Operator Corporation or any successor thereto. “CAISO Protocols” means CAISO Tariff, CAISO Business Practice Manuals and any other applicable CAISO bylaws, procedures, rules, manuals or documents, or any successor, superseding or amended versions thereof that may take effect from time to time. “CAISO Tariff” means the California Independent System Operator Corporation Operating Agreement and Tariff, dated March 31, 1997, as amended from time, including any schedules, appendices or exhibits attached thereto.
“Calendar Quarter” means a period of three calendar Months ending on March 31, June 30, September 30, or December 31.
“Capacity” means any capacity used to meet reliability requirements or the ability to generate and provide or deliver a Product, and includes the meaning defined in the Governing Rules. “Commencement Date” means the later of January 1, 2026, and the date upon which TPS may fully perform its duties listed in Exhibit B.
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"Confidential Information" has the meaning given that term in Section 9(A). “Congestion Revenue Rights” or “CRR” has the meaning given that term in the CAISO Protocols. “Contract Information” means all commercially significant information contained in CPA contracts including but not limited to counter party name and address, contract milestone dates, prices, delivery schedules, payments terms and collateral posting requirements. “CPA” means Clean Power Alliance of Southern California. “CPA Materials” has the meaning given that term in Section 8. “CPA’s Representative(s)” has the meaning set forth in Section 4.4. “CPUC” means the California Public Utilities Commission (or any successor thereto that regulates public utilities in California).
“Credit Counterparties” means entities to which CPA has direct or indirect credit exposure including entities with which CPA transacts, guarantors and providers of letters of credit and other collateral.
“Credit Rating” means, with respect to any entity, the rating then assigned to such entity’s unsecured, senior long-term debt obligations (not supported by third party credit enhancements) or if such entity does not have a rating for its senior unsecured long-term debt, then the rating then assigned to such entity as an issuer rating by Fitch, S&P or Moody’s. “Credit Recommendation” means a recommendation by TPS to CPA that is consistent with CPA’s credit protocols and relates to counterparty and letter of credit provider credit limits and other credit, collateral requirements and payment terms at the entity or transaction level. “Data Only Resources” has the meaning given that term in Section D of Exhibit C. “Data Only Resource Fee” has the meaning given that term in Section D of Exhibit C. “Day-Ahead” has the meaning given that term in the CAISO Protocols. “Defaulting Party” has the meaning given that term in Section 13.2. “Dispute” has the meaning set forth in Section 11.1.
“Dispute Notice” has the meaning set forth in Section 11.1. “DLAP” or “Default Load Aggregation Point” has the meaning given that term in the CAISO Protocols.
“Effective Date” has the meaning given that term in the Recitals. “Energy” means electric energy.
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“Event of Default” has the meaning set forth in Section 13.1. “Event of Unsatisfactory Performance” or “Event” means an unexcused error, act of negligence, omission, or refusal by TPS in performing any of the Services listed in Exhibit B of this Agreement of which CPA notifies TPS in writing.
“FERC” means the Federal Energy Regulatory Commission or any successor thereto. “Force Majeure” has the meaning set forth in Section 15.1. “Forced Outage” has the meaning given that term in the CAISO Protocols. “GO” means a “Generation Owner” as described in the Governing Rules. “GOP” means a “Generation Operator” as described in the Governing Rules. “Governing Rules” has the meaning given that term in Section 14.1. “Included Resources” has the meaning set forth in Section B of Exhibit C. “Inter-SC Trades” or “IST(s)” has the meaning given that term in the CAISO Protocols. “Letter(s) of Credit” means one or more irrevocable, standby letters of credit issued by a U.S. commercial bank or a foreign bank with a U.S. branch, having assets of at least ten billion dollars ($10,000,000,000) and with such bank having a Credit Rating of at least A- from S&P or A3 from Moody’s, in a form mutually agreeable to TPS and CPA.
“Load Forecast” has the meaning set forth in Section C.5. of Exhibit B. “Market Results Interface – Settlements (MRI-S)” means the CAISO user interface software application used for Scheduling Coordinator meter data submissions and CAISO meter data management.
“Middle Office” has the meaning set forth in Section C of Exhibit B. “Month” means a calendar month.
“Monthly Fee” has the meaning set forth in Section A2 of Exhibit C. “MWh” means one megawatt/hour.
“Non-Defaulting Party” has the meaning set forth in Section 13.2. “NERC” means the North American Electric Reliability Corporation or any of its successors. “NERC E-Tag” means a request to transfer Energy submitted in electronic format to a control area or transmission provider, containing required identifying information which enables the control area or transmission provider to schedule the transfer the Energy to another control area or transmission provider.
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“Node” has the meaning given that term in the CAISO Protocols. “Notifying Party” has the meaning given that term in Section 11.1. “Original Agreement” has the meaning given that term in the Recitals. “Outage Event” means any Forced Outage, trip, derating, or decrease in output at the Resource, whether or not caused by an event of Force Majeure, resulting in interruption, curtailment, reduction, or cessation of the production or provision of Energy, Ancillary Services, or Capacity from the Resource.
“Party” or “Parties” has the meaning given that term in the Recitals. “Performance Improvement Plan” has the meaning set forth in Section 2.3(a). “Permitted Termination” has the meaning set forth in Section 14.4. “Person” means an individual, corporation, voluntary association, joint stock company, business trust, partnership, limited liability company, municipality (including any municipal electric board, cooperative, power utility, agency, or subdivision), rural electric cooperative, or other entity. “Portfolio Content Category 1” or “PCC1” has the meaning set forth in the CAISO Protocols. “Portfolio Content Category 2” or “PCC2” has the meaning set forth in the CAISO Protocols. “Portfolio Content Category 3” or “PCC3” has the meaning set forth in the CAISO Protocols. “Portfolio Model” has the meaning given that term in Exhibit B4(a). “PPT” or “Pacific Prevailing Time” means the prevailing time in effect in the Pacific Time Zone. “Product” means Energy, Ancillary Services, Resource Adequacy Capacity, Renewable Energy Credits, and Capacity.
“Project” means CPA’s community choice aggregation program. “Prudent Industry Practice” means, in respect of the performance under this Agreement, the practices, methods, techniques, standards and acts that, at the time of the performance under this Agreement, are then engaged in or approved by a significant portion of the independent power production industry and that, in the exercise of reasonable judgment in light of the facts known at the time of performance, would have reasonably been expected to accomplish the desired results in a manner consistent with Applicable Law. Prudent Industry Practice is not intended to be limited to the optimum practices, methods, techniques, standards and acts to the exclusion of all others, but rather reflect the range of the practices, methods, techniques, standards and acts then generally accepted in the CAISO market, having due regard for, among other things, contractual obligations, Applicable Laws, Permits, and the Governing Rules.
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“PTP” has the meaning set forth in Section 7.2.
“Real Time” has the meaning as defined in the CAISO Protocols. “Recipient Party” has the meaning given that term in Section 11.1. “Reimbursable Amounts” shall mean any TPS costs for equipment, services, or other expenses, including Third Party load forecasting vendor costs, which CPA has authorized in advance. “Reimbursable Amount Limit” has the meaning set forth in Section 7.1. “Renewal Notice” has the meaning set forth in Section 2.2. “Renewal Term” has the meaning set forth in Section 2.2. “Renewable Energy Credit(s)” or (“REC”) means a certificate, credit, allowance, green tag or other transferable indicia, howsoever entitled, created by or pursuant to the applicable CAISO program or certifier indicating generation of a particular quantity of Energy, or RECs associated with the generation of a specified quantity of Energy from a renewable energy source by a renewable energy facility, separate from the Energy produced.
“Resource” means CPA’s interest in the assets listed attached hereto in Exhibit A. “Resource ID” has the meaning as defined in the CAISO Protocols. “Resource Adequacy Capacity” or “RA” means MW of Resource Adequacy Capacity as further set forth in CAISO Protocols. Resource Adequacy Capacity may have system, local and/or flexible attributes as determined by the CPUC and/or CAISO and as specified by CPA. “Responsible Party” has the meaning set forth in Section 14.3. “Service Fees” has the meaning set forth in Exhibit C.
“Services” has the meaning given that term in section 2.1, and described in Exhibit B. “Scheduling Coordinator” has the meaning as defined in the CAISO Protocols. “SCID” means the Scheduling Coordinator ID assigned to CPA by CAISO in which the Resource resides.
“Term” shall mean the period commencing on the Effective Date through and including the expiration of the Initial Term and any Renewal Term, as applicable, subject in all cases to any early termination of this Agreement as permitted herein. “Third Party(ies)” means any Person other than CPA or TPS or their respective Affiliates. “TPS” means Tenaska Power Services Co.
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“Transaction” means any arrangement relating to the scheduling, delivery, sale, and purchase of a Product, as applicable.
“TPS Business Days” means Monday through Friday, excluding Tenaska Power Services Co. observed holidays.
“TPS Groups” has the meaning set forth in Section 17.16. “TPS’s Representative(s)” has the meaning set forth in Section 4.5. “Variable Energy Resource” or “VER” has the meaning as defined in the CAISO Protocols. “WECC” shall mean the Western Electricity Coordinating Council or successor agency. [Signature Page Follows]
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CPA-TPS Scheduling Coordinator Agreement Signature Page IN WITNESS WHEREOF, the Parties hereby have made and executed this Agreement as of the Effective Date.
CLEAN POWER ALLIANCE OF TENASKA POWER SERVICES CO.
SOUTHERN CALIFORNIA
By: _____________________________ By:__________________________ Name: Ted Bardacke Name:
Title: Chief Executive Officer Title:
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Exhibit A - 1
EXHIBIT A
RESOURCES AND LOAD INFORMATION
Included Load:
CPA is a Community Choice Aggregation (“CCA”) program, established as a Joint Powers Authority made of 38 local agencies across Los Angeles and Ventura Counties. These agencies have banded together to provide cleaner electricity at competitive rates, offering retail electricity services to approximately one million (1,000,000) customer accounts in Southern California.
Included Resources:
Resource Resource
Type
Generation
Capacity
(MW)
Storage
Capacity
(MW)
Contract
Start Date
Contract
Term
(Years)
SCME
Services
CAISO Resource ID:
1 Pivot (Aggregated
Beverly and San Gabriel) Rooftop Solar 0.67 12/31/2024 15 Yes SCEC_1_DERP01 2 Isabella Small Hydro 11.95 12/8/2020 10 No VESTAL_6_N006 3 High Desert (aka High
Five)
Solar +
Storage 100 50 9/24/2021 15 No HIGHDS_2_H5SSR1 HIGHDS_2_H5SBT1 4 Sanborn Standalone
Storage 100 10/1/2021 15 Yes SANBRN_2_ESBBT1
5 Arlington Solar +
Storage 233 132 3/21/2022 16 Yes
ARLNTN_2_AR1SR1
SUNCAT_2_A2ABT2
SUNCAT_2_A2BSR2
6 Luna Standalone
Storage 100 8/3/2022 15 No BIGSKY_2_ASLBT2
7 Estrella Solar +
Storage 56 28 12/29/2023 16 Yes
POLRIS_2_ASESR1
POLRIS_2_ASEBT1
8 Daggett 3 Solar +
Storage 123 61.5 11/17/2023 15 No SISPRG_2_DS3SR1 SISPRG_2_DS3BT1 9 Resurgence Solar +
Storage 48 40 9/14/2023 20 Yes
KRAMER_1_R2PX2
KRAMER_1_R2BX2
10 Daggett 2 Solar +
Storage 65 52 12/8/2023 15 No CMBLND_2_DS2SR1 CMBLND_2_DS2BT1 11 Arica Solar +
Storage
93.5 71 4/23/2024 15 No VICPAS_2_SOCSR2
VICPAS_2_SOCBT2
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Exhibit A - 2
Additional Resources:
Resource Resource Type
Generation
Capacity
(MW)
Storage
Capacity
(MW)
Contract
Start Date
Contract
Term
(Years)
SCME
Services
CAISO Resource ID:
1 Rexford Solar + Storage 300 240 2/21/2025 15 No REXFRD_2_RSFSX2 REXFRD_2_RSFBX2
2 Desert Quartzite Solar + Storage 300 150 12/20/2024 20 Yes FILIPPI_2_QZSSRX FILIPPI_2_QZSBTX
3 Dominguez Rooftop Solar 0.96 6/30/2025 15 LGHTHP_2_DOCSR1 4 El Segundo Rooftop Solar 0.64 6/30/2025 15 LAFRES_2_ESHSR1 5 Wilmington 1 Rooftop Solar 1.8 6/30/2025 15 HINSON_2_WI1SR1 6 Wilmington 2 Rooftop Solar 0.6 6/30/2025 15 HINSON_2_W2CSR2 7 Sagebrush Standalone
Storage
40 1/1/2025 15 Yes WSTWND_2_SBSBT2
8 Desert Sands
Long Duration
Standalone
Storage
75 12/1/2026 15
9 Prologis Carson 1 Rooftop Solar 0.68 8/1/2025 20 HINSON_2_CTCSR1 10 Prologis Commerce 4 Rooftop Solar 1.24 9/1/2025 20 LAGBEL_2_CDCSR1 11 Prologis Eaves 1 Rooftop Solar 0.68 9/1/2025 20 LAGBEL_2_EDCSR1 12 Prologis Eaves 3 Rooftop Solar 0.67 9/1/2025 20 LAGBEL_2_EDCSR2 13 Prologis Southbay 20 Rooftop Solar 1.32 10/1/2025 20 LGHTHP_2_SBDSR1 14 Prologis Southbay 6 Rooftop Solar 1.38 6/1/2025 20 LGHTHP_2_SBDSR2 15 Prologis Drifter Standalone
Storage
300 6/1/2027 20
16 Desert Sands II Standalone
Storage
140 6/1/2027 20
17 Key Standalone
Storage
190 6/1/2027 20
18 Denali Standalone
Storage
93.1 12/29/2028 20
19 Solar Star 3 Solar + Storage 24 23 7/1/2025 20
20 Solar Star 4 Solar + Storage 24 23 8/1/2025 20
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Exhibit A - 3
Data Only:
Resource Resource Type
Generation
Capacity
(MW)
Storage
Capacity
(MW)
Contract
Start Date
Contract
Term
(Years)
SCME
Services
CAISO Resource ID:
1 White Hills Wind 300 12/15/2020 20 No WHITEH_2_MEADDYN2 2 Golden Fields Solar 40 12/21/2020 15 No RTEDDY_2_SC1SR3 3 Heber South Geothermal 14 1/1/2022 15 No SIGHEB_6_MIRDYN 4 Voyager Wind 21.6 12/28/2018 15 No VOYAGR_2_VOYWD4
5 Geysers 100 MW Geothermal 100 1/1/2022 15 No
ADLIN_1_UNITS
SMUDGO_7_UNIT 1
GYS5X6_7_UNITS
GYS7X8_7_UNITS
GEYS11_7_UNIT11
GEYS12_7_UNIT12
GEYS13_7_UNIT13
GEYS14_7_UNIT14
GEYS16_7_UNIT16
GEYS17_7_UNIT17
GEYS18_7_UNIT18
SANTFG_7_UNITS
GEYS20_7_UNIT20
6 Geysers 50 MW Geothermal 50 6/1/2027 10 No
7 Geysers 18 MW Geothermal 18 6/1/2026 20 No
8 Kaweah Small Hydro 20 6/16/2020 10 No
9 SunZia Wind Wind 575 10/31/2026 15 No
10 Cape Station Geothermal 33 6/1/2028 15 No
11 Cape Station
Incremental Geothermal 18 6/1/2028 15 No
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Exhibit B - 1
EXHIBIT B
SERVICES
The Parties agree that the following services (“Services”) shall be provided as described herein. The Services to be provided under this Exhibit B will commence upon execution of the Agreement.
A. Scheduling Coordinator Services
1. Scheduling Coordinator Certification: TPS will support CPA in establishing an SCID, including by preparing and submitting templates, plans, forms and other documents required by CAISO for Scheduling Coordinator certification. TPS will act as the Scheduling Agent for CPA and in this capacity, will comply with CAISO access requirements, and establish and maintain ADS, WebOMS and any other required interfaces. TPS will be available for periodic phone calls during the SCID application process to discuss application status.
2. Scheduling Services: As representative for CPA’s SCID, TPS shall:
(a) perform all applicable functions required in order to represent CPA’s SCID, including the management of emergency operational actions, and representing CPA’s SCID in all CAISO and WECC scheduling and bidding functions in the applicable markets, on a 24/7, 365 days per year basis, for the Resource, subject to market availability and operational limitations of the Resource;
(b) as applicable, submit Inter-SC Trades (“IST(s)”), submit import schedules, and prepare, update, and monitor NERC E-Tags. TPS will provide E-Tag summary information for Transactions that include point of receipt (POR), point of delivery (POD), source, sink and first deliverer of record into the CAISO in support of the CARB MRR Annual Report; (c) monitor LMPs and implement portfolio curtailment opportunities and decisions as directed by CPA for those Resources and Loads listed in Exhibit A; (d) monitor and make reasonable efforts to minimize all Energy imbalances to optimize the financial impact of the CPA portfolio.
CPA must provide TPS with all schedules, offers, bids, instructions, and other information it desires TPS to submit to CAISO or WECC at least one (1) hour prior to the applicable submission deadlines.
3. Demand Bids: TPS will submit demand bids to CAISO to meet CPA’s forecasted load requirements per CPA’s direction as long as such direction is provided pursuant to the requirement in Section A(2) of this Exhibit B. TPS will monitor and compare demand bid information resident in the CAISO portal with submitted information and validate market data submissions.
4. Economic and Self-Schedule Supply Bids: As and when CPA directly enters into supply agreements with power suppliers, generators, storage facilities, and/or demand response or other aggregated or virtual resources, TPS will perform the scheduling and settlement activities required to schedule CPA’s supply agreements with CAISO, including new resource onboarding. Any schedule
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Exhibit B - 2
change or notice provided to TPS by CPA must be provided pursuant to the requirement in Section A(2) of this Exhibit B.
5. Outage Scheduling: TPS will transmit to CAISO the Resource outage data as CPA transmits to TPS concerning an Outage Event (whether planned or unplanned) or an outage to conduct emergency maintenance within time periods specified for the transmission of such data under the CAISO Protocols, provided that CPA transmits such data to TPS at least one (1) hour prior to any applicable deadline for reporting as set forth in the CAISO Protocols.
6. Resource Management: At CPA’s discretion and direction, TPS will execute bidding and dispatch strategies for CPA’s range of resource technologies described in Exhibit A of this Agreement to maximize the value of CPA’s resource portfolio in the CAISO market.
7. Market Monitoring: TPS will use commercially reasonable efforts to monitor CAISO market activities and communicate to CPA information pertaining to such CAISO market activities that TPS reasonably believes may impact CPA or be of interest to CPA.
8. Shadow Settlements and Reconciliation: TPS will use its proprietary data management and calculation engine, PowerTools Platform®© (“PTP”®) to shadow settle all CAISO settlement statement versions. TPS shall provide the CAISO shadow settlements to CPA daily in a PTP® report or dashboard that is separate from the PTP® report or dashboard providing the actual CAISO settlements (“TPS Shadow Report”). The TPS Shadow Report shall have an additional column that populates with the actual CAISO settlement data once such actuals are available from CAISO so that the actual CAISO settlements and the TPS shadow settlements can be compared daily. TPS will analyze discrepancies found between TPS’s internally generated settlement statements and CAISO’s settlement statements and will report all discrepancies to CPA. CPA will provide TPS parameters for further investigation of such discrepancies and filing of disputes with CAISO. For discrepancies falling within CPA’s parameters, TPS will file disputes at CPA’s cost with CAISO on behalf of CPA, will manage these disputes with CAISO, and will regularly provide CPA a status report on all filed disputes. TPS will also review all additional CAISO settlement statements to verify CAISO has made requested changes to prior statements and to verify the accuracy of any additional CAISO charges and credits.
TPS is authorized to receive from CAISO historic and real time data collected by CAISO from, or provided to CAISO by, CPA. TPS is authorized to have access to CPA’s SCID at CAISO to review CAISO’s bills and settlement statements. If necessary, CPA will communicate such authorizations directly to CAISO.
9. Reporting:
a. Regulatory Reporting: TPS will assist in data collection for CPA’s regulatory reporting. CPA will be responsible for required state, federal or regional reports applicable to its licenses and business interests. For clarification, nothing herein shall obligate TPS to prepare or submit any regulatory or governmental reports for CPA; provided, however, that TPS shall timely provide to CPA all information in its possession that is reasonably requested by CPA for CPA’s regulatory or governmental reports.
b. Performance / Settlements Reporting: TPS will validate all CAISO invoices, including performing CAISO shadow settlements in accordance with Section 8 of this Exhibit B, and
Agenda Page 136
Exhibit B - 3
provide daily validation reports (with month-to-date information) to CPA. TPS will provide a monthly report detailing all historic charges and credits by charge code and by Month. c. Market Performance Reporting: TPS will prepare and provide to CPA in a mutually agreed upon format end-of-day summary, 14-day summary and monthly summary reports on load and Resource performance metrics, including volumes and pricing for load, contracted generation and IST hedges. Reports should include graphical representation of key metrics and underlying data. TPS may provide this report by means of granting CPA access to a portal window into TPS’s data system showing data with respect to CPA’s Resources.
10. Scheduling Coordinator Meter Entity (“SCME”) Services: For Resources designated for Scheduling Coordinator Metered Entity Submission Services in Exhibit A to this Agreement, RESOURCE(S) AND LOAD INFORMATION, TPS will monitor and submit the Resource’s generation meter data values on a daily basis, on TPS Business Days only. CPA will arrange for TPS to be sent timely actual settlement quality meter data of a type, quantity, level of accuracy, and in a format enabling TPS to submit such meter data timely to CAISO's Market Results Interface - Settlements (MRI-S) system or any successor system. TPS will upload such generation meter data for the SCME Resources and will use commercially reasonable efforts to submit such generation meter data to the CAISO as required by and in accordance with applicable CAISO rules. CPA will be solely responsible for arranging for TPS to receive generation meter data and verifying the accuracy of the meter data. CPA will be responsible for CAISO required collection, security, validation and estimation of meter data, as well as the required meter testing and self-audit. TPS shall not be responsible for errors in meter data supplied to CAISO, the completeness of meter data supplied to CAISO or any penalties assessed by CAISO related to meter data or meter data submission. Notwithstanding the foregoing, and subject to the limitation of liability in Section 12.2, TPS shall be responsible and shall reimburse CPA for any CAISO penalties and fees resulting from TPS’s failure to submit timely and accurate meter data to CAISO provided that CPA has caused accurate meter data to be submitted to TPS in a timely manner.
B. Congestion Revenue Rights Portfolio Management
1. Congestion Revenue Rights (“CRR”) Bid Preparation and Support: TPS will prepare data sheets containing metrics CPA and TPS agree are necessary for the determination of its annual and monthly CRR nominations and auction bids and offers. TPS will receive from CPA and subsequently submit to CAISO CPA’s CRR nominations, auction offers, and auction bids, in each instance, as representative of CPA’s SCID for each monthly and annual CRR process operated by CAISO. CPA shall determine which CRRs to nominate, purchase, and sell, and CPA shall determine the volumes and prices. TPS shall review and provide input on CPA’s CRR strategy upon CPA’s reasonable request.
Services to be provided include:
(a) Delivery of TPS’s standard CRR report, including standard results will be made available to CPA via mutually agreeable form.
(b) TPS will provide its standard CRR report no later than two (2) Business Days after the tier 3 results are posted for the annual allocation and no later than one (1) Business Day after the tier 2 results are posted for the monthly allocation (as such CRR tiers are described in CAISO Tariff Section 36.8.3.1, Section 36.8.3.2, Section 36.8.3.2, and Section 36.8.3.6 and
Agenda Page 137
Exhibit B - 4
as shown in CAISO’s Congestion Revenue Rights BPM Section 8.2, Exhibit 8.1). CPA will provide its selection of CRR nominations and bid volumes and prices to TPS in a format (currently XML) that allows TPS to submit all such information to CAISO in a timely manner. The CAISO portal submission files acceptable for the monthly auction shall be received by TPS no later than 10:00 AM PPT on the day the auction window closes. Files for the monthly nominations shall be received by TPS no later than 10:00 AM PPT on the day the nomination window closes. Files for the annual auction shall be received by TPS no later than 10:00 AM PPT on the day before the auction window closes. Files for the annual allocation shall be received by TPS no later than 10:00 AM PPT on the day before the nomination window closes. TPS will make best efforts to make submissions if received later than deadlines stipulated above. TPS and CPA will work together to ensure that any credit requirements for CRR auction participation are met by the CAISO market deadlines. (c) TPS will provide a monthly congestion forecast report for CPA’s Monthly CRR processes.
This report will contain TPS’s outlook on Day-Ahead congestion pricing for the Month ahead. Nodes to be analyzed will be limited to those associated with the Resource and the CPA DLAP, and up to five (5) additional Nodes selected by CPA. TPS’s outlook will be based on network modeling, historical data and/or market expertise.
2. CRR Portfolio Performance: TPS shall provide access to a dashboard for CPA’s CRR Transactions and shall review all settlement statements and invoices associated with any such CRRs for accuracy. CPA shall be responsible for funding the CAISO CRR Candidate Holder Minimum Participant Requirement, if any, directly with CAISO.
3. CRR Risk Management Policy: At CPA’s reasonable request, TPS shall review and provide input on whether CPA’s policy to acquire and manage CRRs are consistent with industry best practices.
C. Middle Office Services
1. Deal Capture and Transaction Approval: TPS will use commercially reasonable efforts to enter all of CPA’s executed and prospective Contract Information for all product types (e.g., Energy, PCC1, PCC2, PCC3, Carbon Free and Resource Adequacy) into TPS’s system accurately within two (2) Business Days of receipt of the Contract Information from CPA. TPS shall validate the accuracy of CPA’s Contract Information utilizing CPA’s transaction approval process prior to entry into such system. CPA will be provided with read-only access to its Contract Information and transaction data either through a direct user interface or daily report in a file format agreeable to CPA, including data for settlements validation of bilateral transactions.
2. Credit Risk Management Support. TPS will monitor and report CPA’s counterparty credit exposure, monitor and report changes in the creditworthiness of CPA Credit Counterparties, provide Credit Recommendations consistent with CPA’s credit protocols and provide recommendations for transaction level credit support. All Credit Recommendations made by TPS will be subject to final approval by CPA. In order for TPS to perform this service, CPA will provide TPS with a written copy of CPA’s credit protocols0F, and any periodic modifications thereto. CPA will promptly provide any changes to its credit protocols, including its goals, philosophy, manner and process of implementation, and the quantitative and qualitative measures used in CPA’s credit assessments, and TPS shall ensure that its relevant employees are informed of CPA’s credit
Agenda Page 138
Exhibit B - 5
protocols during the Term. CPA will make knowledgeable CPA personnel available to answer TPS questions about the policy, and to train TPS personnel in following the protocols, as necessary.
CPA will provide TPS with a list of current CPA counterparties whose credit CPA expects TPS to monitor. CPA will keep that list current. TPS will provide CPA with overall Credit Recommendations per counterparty and will provide these recommendations in formats and within timelines at intervals to be mutually agreed upon by the Parties. The Parties will memorialize their agreement as to the procedures, timelines, and formats for submitting TPS’s Credit Recommendations in a written schedule. CPA will have the duty to make any final counterparty credit determination. CPA will have complete discretion concerning the weight, if any, it chooses to attach to a TPS Credit Recommendation, and may ignore any TPS Credit Recommendation.
3. Risk Management & Financial Model Support:
(a) TPS will work with CPA to develop a model of CPA’s portfolio in TPS’s risk analytics system for the purpose of Monte Carlo simulation analysis in hourly granularity (the “Portfolio Model”). The Portfolio Model components will include owned or contracted generation resources, loads aggregated by weather location, and hedge contracts. If other sources of cost or revenue need to be included in the model, TPS will make a good faith effort to include these components. TPS will develop a reporting format agreeable to CPA for communicating model results. Outputs may be bucketed based on any combination of the following categories:
i. Monthly, annual, or total model horizon
ii. Cost, revenue, net profit and loss, or volume
iii. Generation/generation contracts, load, hedge contracts, or portfolio total For the purposes of this section, “Output” refers to a statistical centile, mean, or histogram provided in Excel workbooks. For example, the Portfolio Model report may include the mean, 5th and 95th percentile load cost by month, or a histogram of annual total portfolio revenue. TPS will also provide hedge sensitivity tables by Month and Calendar Quarter at the1st, 5th, 50th and 95th net profit percentiles. These sensitivity tables should reflect net profit or loss for a range of expected load hedge levels centered around the 100% hedged level. Other outputs not covered by these categories may be made available as agreed upon between CPA and TPS.
(b) It is expected that, from time to time, CPA will require ad hoc scenario runs of the Portfolio Model using a different set of assumptions or components. For example, CPA may wish to run the Portfolio Model including a new hedge contract under consideration, or with a custom forward curve for energy prices, or to stress the impact of a large amount of load migrating away from CPA. TPS shall support up to eight (8) scenario runs per Month. Upon receipt of a scenario run request, TPS shall communicate to CPA an expected completion time. CPA recognizes that TPS is able to provide results within two Business Days in most cases, but complex requests, such as modeling a new generation resource, may take additional time. Standing scenarios or stress tests may be incorporated into the standard Portfolio Model as agreed upon between TPS and CPA, and such standing scenarios or stress tests shall not be considered a scenario run or count against the limits described in this Section 3(b).
Agenda Page 139
Exhibit B - 6
(c) The horizon of Portfolio Model simulations shall be limited to three (3) prompt calendar years, unless otherwise agreed upon between TPS and CPA. CPA will be responsible for providing TPS with load growth and generation resource availability assumptions to be used in Portfolio Model runs. Financial outputs (cost, revenue, net profit and loss) are reported on an accrual basis by default, but may be reported on a cash basis and/or accrual basis if CPA provides TPS with settlement and invoice timelines to use for relevant Portfolio Model components. Portfolio Model reports shall be provided at least monthly, but may be provided more frequently as agreed upon between TPS and CPA. (d) TPS will assist CPA to manage CPA’s risks in accordance with the CPA Risk Management Policy1F by providing Monthly Portfolio Model reports, ad hoc scenario analyses, and timely net position and counterparty credit exposure reporting, as defined in this Exhibit B.
TPS will also make recommendations to CPA concerning risk management questions, and at CPA’s discretion, CPA will make the final decision on whether to ignore or implement TPS’s recommendations. Additional assistance may be provided as agreed upon between TPS and CPA.
4. Load Forecasting Services: TPS will develop or cause to be developed an hourly weather-adjusted load forecast of Energy requirements (the “Load Forecast”) setting forth CPA’s projected hourly Load Forecast for the following fourteen (14) days; provided that CPA supplies TPS with at least two years, if available, and preferably up to five years of historic CPA hourly consumption information. The Load Forecast will be refreshed on a daily basis, or more frequently, and made available to CPA along with the weather forecasts used for prediction, through a mutually agreed data transfer process. The Load Forecast shall represent expected aggregate energy consumption at each load aggregation point where CPA submits daily demand bids. The Load Forecast shall reflect weather forecasts from a minimum of three weather stations in Los Angeles and Ventura counties.
TPS will monitor load forecast performance, provide weekly reports on forecast error, and make periodic adjustments to the forecast model to ensure adequate load forecast accuracy. The forecast model shall be trained/fit with new data on a Monthly basis or more frequently. TPS will make adjustments to the forecast model as necessary to account for load migration and/or mass enrollment for new jurisdictions. CPA may request, and TPS may agree, to utilize a Third Party vendor to provide load forecasting services, either to supplement or replace TPS’s load forecasting services.
In such an event, TPS will pass the cost of the Third Party service through to CPA as a Reimbursable Amount. CPA will also have the ability submit a new load forecast which TPS will use to override TPS’s load forecast.
Agenda Page 140
Exhibit C - 1
EXHIBIT C
SCHEDULING COORDINATOR FEE SCHEDULE AND PAYMENTS
This Exhibit C describes the Services Fees ("Service Fees*”) to be remitted to TPS from CPA for all Services performed pursuant to this Agreement.
A. Service Fees
1. Setup fee: Waived
2. Monthly Fee: As compensation for the Services provided by TPS under the Agreement, CPA will pay TPS a Monthly Fee, to begin on the Commencement Date, for Included Resources per the following:
Services Compensation
Scheduling Coordination, as described in Exhibit B, Section A $50,000 Congestion Revenue Rights Management, as described in Exhibit B, Section B $5,000
Middle Office Services Credit Risk Management, as described in Exhibit B, Section C $7,500
Middle Office Services Risk Management, as described in Exhibit B, Section C $7,500
Load Forecasting, as described in Exhibit B, Section C $3,275 Total: $73,275
SCME Services, as described in Exhibit B, Section A.-10.
For months in which SCME
Services are provided, $1,500 for
up to 3 Resource IDs; and an
incremental $500 per Resource ID
starting with the 4th Resource ID
For Additional Resources that are included in Exhibit A or that the Parties mutually agree to include in Exhibit A
When an Additional Resource is
accepted into CPA's SCID by
CAISO, CPA shall pay TPS
$2,500 per month per Additional
Resource in the manner specified
herein
B. Additional Resources. The Resources identified in Exhibit A as Included Resources ("Included Resources") are included in the Monthly Fee in paragraph A.2. of this Exhibit C. The Included Resources may be subject to change, upon written notice, but at a minimum shall include two renewable resources and up to nine (9) renewable plus storage hybrid / co-located facilities or stand-alone storage resources. Further, in addition to the Included Resources, additional resources may be added to Exhibit A in the future upon mutual agreement of the Parties (“Additional Resources”). For each Additional Resource, an incremental fee of $2,500 per Month per Additional Resource will be assessed and paid in accordance with this Agreement, commencing the Month that the Additional Resource is accepted into CPA's SCID by the CAISO, and continuing for so long as the Services provided with regard to each Additional Resource is commensurate with the level of Services provided to the Included Resources.
C. SCME Services. TPS shall provide SCME Services to the Included Resources designated to receive such services in Exhibit A. By mutual agreement in writing, the Parties may add SCME Services to the Included Resources appearing in Exhibit A and Additional Resources.
Agenda Page 141
Exhibit C - 2
D. Data Only Resources. For the Resources in Exhibit A that are identified as Data Only Resources (“Data Only Resources”), TPS shall provide VER forecast data and generation data (in MWh) and no other services. During the set-up process for the Data Only Resources, the Parties shall cooperate in good faith to agree upon the format and content of the data reports and data exports or updates to existing data reports and data exports, as applicable. The Parties acknowledge that the Data Only Resources reside in a non-CPA owned SCID, and, accordingly, CPA must grant access to TPS to allow TPS to query the information necessary to enable TPS to perform the services under this Exhibit C, Section D (for the avoidance of doubt, until such access is granted, TPS shall have no obligation to provide the services described under this Section). TPS will invoice CPA a one-time Data Only Resource Fee equal to five thousand Dollars ($5,000) for each Data Only Resource identified in Exhibit A as of the Effective Date; provided however, if the initial set-up for a Data Only Resource includes only generation data, at any time after the initial set-up, TPS shall add VER forecast data for such Data Only Resource at CPA’s request at no additional cost to CPA E. Additional Services. The Parties will negotiate in good faith to reach agreement on the implementation of new services not currently contemplated in this Agreement.
Agenda Page 142
Exhibit D - 1
EXHIBIT D
NOTICE INFORMATION
TPS: TENASKA POWER SERVICES CO. CPA: CLEAN POWER ALLIANCE OF
SOUTHERN CALIFORNIA
All Notices: All Notices:
300 E. John Carpenter Freeway, Suite 1100
Irving, TX 75062
801 S. Grand, Suite 400
Los Angeles, CA 90017
Attn: Contract Administration
Phone: (817) 303-1860
Email: [email protected]
Duns Number: 01-501-6913
CICI Number: 549300K7NFSB93YGBN35
CFTC Designation: End User
Federal Tax ID Number: 47-0824081
(TPS represents that it is corporation validly existing under the laws of the State of Nebraska and is a
Qualified Subchapter S Subsidiary (“QSSS”) of
Tenaska Energy, Inc. disregarded for U.S. tax
purposes. TPS’s sole owner for U.S. tax purposes,
Tenaska Energy, Inc., is an S corporation organized
under the laws of the State of Delaware and its U.S.
taxpayer identification number is 47-0824081.
Tenaska Energy, Inc. is "exempt" within the meaning
of Treasury Regulation sections 1.6041-3(p) (1) and
1.6049-4(c) from information reporting on Form 1099
and backup withholding.
Attn: Theodore Bardacke, Chief Executive Officer
Phone: (213) 269-5891
Email: [email protected]
With a copy to:
Lindsay Descagnia, Vice President Power Supply
Phone: (213) 280-4011
Email: [email protected]
Invoices:
Attn: Accounts Payable
Phone: (817) 462-1521
Email: [email protected]
Invoices, Payments, Credit and Collections:
Attn: Accounts Payable
Phone: (213) 269-5891
Email: [email protected]
Real Time Trading:
Phone: (817) 462-1528
Real Time Trading & Scheduling:
Attn: Lindsay Descagnia
Phone:
TPS Representative: CPA Representative:
Payments:
Attn: Accounts Receivable
14302 FNB Parkway
Omaha, NE 68154
Phone: (402) 938-1621
Payments:
Attn: Accounts Payable
Email: [email protected]
Phone:
Agenda Page 143
Exhibit D - 2
ACH/Wire Transfer:
Bank: US Bank, Omaha, NE
ABA No: 042000013
Account No: 130111671306
Account Name: Tenaska Power Services Co.
ACH/Wire Transfer:
Bank: River City Bank
ABA No: 121133416
Account No: 2980977557
Account Name: Operating Account
Credit and Collections:
Attn: Credit Department
Phone: (817) 303-1113
Email: [email protected]
Credit and Collections:
Attn: Chief Financial Officer
Phone: (213) 269-5877
Email: [email protected]
With additional Notices of an Event of Default or
Potential Event of Default to:
Attn: Vice President and General Counsel
Phone: (817) 462-8053
Email: [email protected]
With additional Notices of an Event of Default or
Potential Event of Default to:
Attn: Theodore Bardacke, Chief Executive Officer
Phone: (213) 269-5891
Email: [email protected]
Agenda Page 144
Exhibit E - 1
EXHIBIT E
INSTRUCTIONS TO TPS TRADERS RESTRICTING CALIFORNIA TRADING TPS takes seriously its legal and compliance obligations and maintains a risk policy manual that instructs TPS traders as to what activities are allowable or not allowable due to either TPS’s own internal policies or its external compliance obligations.
All TPS traders with access to Confidential Information or CPA Materials as defined above must follow all of the following directives immediately upon commencement of service to CPA:
• TPS has begun providing Scheduling Coordinator services for CPA. TPS traders are to treat CPA as a valued customer.
• TPS traders will respect the confidentiality of the Confidential Information or CPA Materials
• TPS traders shall not use any Confidential Information or CPA Materials to either support Transactions with Third Parties, to manage the resources of other customers, or benefit TPS’s own trading portfolio.
• This directive will be added as an operational control limit to TPS’s risk policy, and therefore is subject to the same requirements as the TPS risk policy.
Any failure by a trader or other TPS personnel to follow the requirements stated in TPS’s risk policy manual will be cause for disciplinary action by TPS management, including written reprimands, docking of wages, loss of trader bonus eligibility, suspension, and/or termination of employment.
Traders who have questions about the applications of these instructions should contact their supervisor.
Agenda Page 145
Staff Report – Agenda Item 5
To: Board of Directors
From: Cara Rene, Director, Communications & Marketing
Reviewed By:
Approved By:
Nancy Whang, General Counsel
Ted Bardacke, Chief Executive Officer
Subject: Contract Amendment with Pastilla, Inc. for Creative Services in FY 2025/26
Date: July 10, 2025
RECOMMENDATION
Approve and authorize the Chief Executive Officer to execute Amendment No. 2 to increase the contract value of the professional service agreement (PSA) with Pastilla, Inc. by $833,608 for a total Not to Exceed (NTE) amount of $1.85 million in FY 2025/26 for creative services, web development, and web maintenance.
BACKGROUND
In July 2024, the Board approved a contract with Pastilla Inc., for creative services, and website development and maintenance aligned with the FY 2024/25 budget for a not-to-exceed (NTE) amount of $1.01 million. Pastilla’s services support in enrollment of CPA programs, development of marketing strategy, and growth in CPA’s brand awareness.
In November 2024, the Board approved an amendment to increase Pastilla’s contract amount by $656k to ensure program marketing could continue when another CPA vendor that was assigned a portion of those duties was terminated.
Agenda Page 146
Board of Directors Item 5
DISCUSSION
Staff is proposing an amendment with Pastilla for FY 2025/26 to increase the contract authority by $833,608. The increase does not alter the scope of the duties outlined in Pastilla’s contract but provides for increased support aligned with the growth of CPA programs, elevating CPA’s brand awareness and, and website enhancements.
Work planned for this fiscal year for Pastilla includes:
• Grow awareness of CPA through brand campaign activities • Marketing support for CPA programs, including newer programs such as Instant AC Savings, Solar and Battery Access, and expanded incentives for Sun Storage Rebate
• Integrated customer program campaign to increase awareness of offerings and grow enrollments
• Develop a webpage for wildfire recovery and resiliency resources • Implement ADA updates to the website
• Develop an interactive online newsroom to engage media • Develop a suite of social media assets
• Homepage refresh and other website enhancements
FISCAL IMPACT
Funds for the proposed contract amendment are included in the Board-approved FY2025/26 Budget.
ATTACHMENT
1. Amendment to the Professional Services Agreement (PSA) with Pastilla, Inc.
Agenda Page 147
AMENDMENT NUMBER TWO TO
PASTILLA, INC.
PROFESSIONAL SERVICES AGREEMENT
This Amendment Number Two (“AMENDMENT TWO”) to the Professional Services Agreement is made by and between Clean Power Alliance of Southern California (“CPA”) and Pastilla, Inc. (“CONTRACTOR”) on July XX, 2025. CPA and CONTRACTOR may individually be referred to herein as a “Party,” or collectively as the “Parties.”
RECITALS
WHEREAS, a Professional Services Agreement (“AGREEMENT”) was executed on June 7, 2024, between CPA and CONTRACTOR to provide professional services for digital marketing, website, social media support, and creative design services; WHEREAS, on November 7, 2024, CPA executed AMENDMENT ONE to the AGREEMENT in order to update the compensation set forth in Exhibit C; WHEREAS, CPA desires to further amend the AGREEMENT in order to update the compensation set forth in Exhibit C for the First Renewal Term; WHEREAS, CONTRACTOR has the competence and expertise to provide the professional services, described above; and,
WHEREAS, CONTRACTOR desires to continue providing and performing these professional services.
NOW, THEREFORE, it is mutually agreed by and between the Parties hereto to amend the AGREEMENT as follows:
1. Exhibit C of the AGREEMENT is deleted in its entirety and replaced with Exhibit C (Compensation), attached hereto.
2. Except as specifically amended hereby, all other terms and conditions of the AGREEMENT shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this AMENDMENT TWO to be executed as of the date first above written.
[Signature Page Follows]
Agenda Page 148
CLEAN POWER ALLIANCE OF SOUTHERN CALIFORNIA
By
______________________________________
Theodore Bardacke
Chief Executive Officer
CONTRACTOR: PASTILLA, INC.
_______________________________________
By
Name:
Title:
Agenda Page 149
Exhibit C – Compensation
Contractor shall satisfactorily provide all the contemplated Services detailed in Exhibit A at the following hourly rates specified in the table below and in compliance with the terms and conditions of this Agreement:
Description Hourly Rate
T1: Strategy $250
T2: Development $198
T3: Execution $165
T4: Support $125
The hourly rates set forth above shall not increase by more than 3% during any authorized Renewal Term.
Maximum Authorized Fees per Task: Initial Term (June 7, 2024 – June 6, 2025) Contract (Task) Item Estimated Due Date
Maximum
Authorized
Fees
Task #1: Website Support Ongoing over the duration
of the Agreement $225,000
Task #2: CPA Brand Growth: Creative
Development
Task #3: CPA Brand Growth: Creative Content
Ongoing over the duration
of the Agreement $63,647
Task #4: Marketing Strategies for CPA Program
Recruitment
Ongoing over the duration
of the Agreement $649,683
Task #5: Video Production Services
Task #6: Social Media Support
Task #7: As-Needed Services
Ongoing over the duration
of the Agreement $82,492
Initial Term: Maximum Authorized Fees $1,020,822
Maximum Authorized Fees per Task: First Renewal Term (June 7, 2025 – June 6, 2026) Contract (Task) Item Estimated Due Date
Maximum
Authorized
Fees
Task #1: Website Support Ongoing over the duration
of the Agreement $436,605
Task #2: CPA Brand Growth: Creative
Development
Task #3: CPA Brand Growth: Creative Content
Ongoing over the duration
of the Agreement $145,000
Task #4: Marketing Strategies for CPA
Program Recruitment
Ongoing over the duration
of the Agreement $755,296
Task #5: Video Production Services
Task #6: Social Media Support
Task #7: As-Needed Services
Ongoing over the duration
of the Agreement $517,529
First Renewal Term: Maximum Authorized Fees $1,854,430
Agenda Page 150
Any travel, administrative expenses, and materials (hereinafter, “Expenses”) will be billed in the amount incurred by Contractor for actual out-of-pocket cost, without any additional mark-up by Contractor. Any Expenses incurred shall be billed for the month in which the Expenses are incurred. Expense reports detailing all Expenses, along with receipts, shall be presented to CPA for reimbursement. All expenses must be approved by CPA in advance writing before they are incurred.
Maximum Authorized Expenses $0
A project budget shall be presented and approved by CPA for each task before any work commences. CPA reserves the right to reject and to not pay costs that were not approved in compliance with this provision.
The Total Maximum Amount that CPA shall pay Contractor, including any subcontractor that the Contractor may retain, for all Services and Expenses to be provided under this Professional Services Agreement shall not exceed One Million Twenty Thousand Eight Hundred Twenty-Two Dollars ($1,020,822) ("Not-to-Exceed" or "NTE") during the Initial Term.
Initial Term:
Maximum Amount Up to and Not to Exceed $1,020,822
The Total Maximum Amount that CPA shall pay Contractor, including any subcontractor that the Contractor may retain, for all Services and Expenses to be provided under this Professional Services Agreement shall not exceed One Million Eight Hundred Fifty-Four Thousand Four Hundred Thirty Dollars ($1,854,430) ("Not-to-Exceed" or "NTE") during the First Renewal Term and for any subsequently authorized Renewal Term.
First Renewal Term:
Maximum Amount Up to and Not to Exceed $1,854,430
Contractor shall satisfactorily perform and complete, in the judgement of CPA, all required Services in accordance with Exhibit A notwithstanding the fact that total payment from CPA shall not exceed the NTE.
Agenda Page 151
Staff Report – Agenda Item 6
To: Board of Directors
From: Cara Rene, Director, Communications & Marketing
Reviewed By:
Approved By:
Nancy Whang, General Counsel
Ted Bardacke, Chief Executive Officer
Subject: Contract Amendment with Bloom Ads Global Media Group for Media Buying and Related Services in FY 2025/26
Date: July 10, 2025
RECOMMENDATION
Approve and authorize the Chief Executive Officer to execute Amendment No. 3 to the professional service agreement (PSA) with Bloom Ads Global Media Group (Bloom Ads) to increase the contract value by $596,327 for a total Not to Exceed (NTE) amount of $2,655,327 in FY 2025/26 for media buying and related services.
BACKGROUND
In October 2023, as a result of a competitive RFP process, the CPA Board authorized a one-year contract with Bloom Ads Global Media Group for a not-to-exceed (NTE) amount of $250,000 for media buying, research and planning to support program marketing, customer recruitment, and growth of CPA’s brand awareness. In April 2024, the Board approved a $100,000 increase in the contract amount to allow for the addition of TV streaming into CPA’s media buying mix.
In June 2024, the Board approved the FY2024/25 budget, which included $1.919 million for paid advertising. To implement the majority of paid advertising in the FY24/25 budget, the Board approved an amendment to Bloom’s contract to increase the contract amount Agenda Page 152
Board of Directors Item 6
by $1.709 million. That amendment also extended the contract term with Bloom to June 30, 2025, thus aligning the Bloom media buying contract with CPA’s fiscal year cycle.
DISCUSSION
Staff are proposing a contract amendment with Bloom Ads for FY 2025/26 for a total Not to Exceed (NTE) amount of $2,655,327, an increase in paid media and related services by $596,327 over the NTE amount in FY 2024/25. The proposed amendment does not alter the scope of the duties outlined in Bloom’s contract but provides for an increased amount paid media to enhance CPA’s visibility and reach as aligned with the growth in CPA programs.
CPA is preparing for increased program marketing and brand awareness activities outlined in the FY 2025/26 Communications and Marketing budget and as aligned with the growth of CPA programs and wildfire resilience efforts. Paid media includes tactics for visibility and customer engagement such as TV streaming advertising through geotargeting CPA zip codes and multi-lingual messaging through TVs, mobile, tablets and desktops, live community activations and promotions, radio, and billboards.
FISCAL IMPACT
Funds for the proposed contract amendment are included in the Board-approved FY2025/26 Budget.
ATTACHMEN 1. AmendedT PSA with Bloom Ads Global Media Group Agenda Page 153
AMENDMENT NUMBER THREE TO
BLOOM ADS GLOBAL MEDIA GROUP
PROFESSIONAL SERVICES AGREEMENT
This Amendment Number Three (“AMENDMENT THREE”) to the Professional Services Agreement is made by and between Clean Power Alliance of Southern California (“CPA”) and Bloom Ads Global Media Group (“CONTRACTOR”) on July XX, 2025. CPA and CONTRACTOR may individually be referred to herein as a “Party,” or collectively as the “Parties.”
RECITALS
WHEREAS, a Professional Services Agreement (“AGREEMENT”) was executed on October 5, 2023, between CPA and CONTRACTOR to provide professional services for paid media services;
WHEREAS, on April 4, 2024, CPA and CONTRACTOR executed Amendment Number One (“AMENDMENT ONE”) in order to update the compensation set forth in Exhibit C;
WHEREAS, on July 11, 2024, CPA and CONTRACTOR executed Amendment Number Two (“AMENDMENT TWO”) in order to update the term of the AGREEMENT and the compensation set forth in Exhibit C;
WHEREAS, CPA desires to further amend the AGREEMENT in order to update the compensation set forth in Exhibit C for the First Renewal Term; WHEREAS, CONTRACTOR has the competence and expertise to provide the professional services, described above; and,
WHEREAS, CONTRACTOR desires to continue providing and performing these professional services.
NOW, THEREFORE, it is mutually agreed by and between the Parties hereto to amend the AGREEMENT as follows:
1. Exhibit C of the AGREEMENT is deleted in its entirety and replaced with Exhibit C (Compensation), attached hereto.
2. Except as specifically amended hereby, all other terms and conditions of the AGREEMENT shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this AMENDMENT THREE to be executed as of the date first above written. [Signature Page Follows]
Agenda Page 154
CLEAN POWER ALLIANCE OF SOUTHERN CALIFORNIA
By
______________________________________
Theodore Bardacke
Chief Executive Officer
CONTRACTOR: Bloom Ads Global Media Group
By
_______________________________________
Kathe Bloom
President/CEO
Agenda Page 155
Exhibit C – Compensation
Contractor shall satisfactorily provide all the contemplated Services detailed in Exhibit A at the fixed price per deliverable specified in the table below and in compliance with the terms and conditions of this Agreement.
Initial Term (April 4, 2024 – June 30, 2025)
Task Description Estimated Due Date Not to Exceed
Amount
1 Research and Planning Completed Strategic Media
Plan by December 31, 2023 $17,000
2 Media Buying
(Includes hard costs of media)
Ongoing over the duration of
the Agreement $1,982,000
3 Partnerships
(Includes talent fees and associated
sponsorship direct costs)
Ongoing over the duration of
the Agreement $55,000
4 Ad Tagging, Trafficking, and Serving Ongoing over the duration of the Agreement $5,000
5 Dashboard and Reporting Ongoing over the duration of
the Agreement Included
Expenses, if approved in advance, in writing, by CPA $0 Initial Term: TOTAL Program Costs $2,059,000
First Renewal Term (July 1, 2025 – June 30, 2026)
Task Description Estimated Due Date Not to Exceed
Amount
1 Research and Planning Completed Strategic Media
Plan by July 31, 2025 $26,140
2 Media Buying
(Includes hard costs of media)
Ongoing over the duration of
the Agreement
$2,622,652
3 Partnerships
(Includes talent fees and associated
sponsorship direct costs)
Ongoing over the duration of
the Agreement
4 Ad Tagging, Trafficking, and Serving Ongoing over the duration of the Agreement $6,535
5 Dashboard and Reporting Ongoing over the duration of
the Agreement Included
Expenses, if approved in advance, in writing, by CPA $0 First Renewal Term: TOTAL Program Costs $2,655,327
All hard media costs, talent fees, and associated sponsorship direct costs as set forth in Task 2 and Task 3 above will be billed in the amount incurred by Contractor for actual out-of-pocket cost (hereinafter, “Media Fees”), with a maximum additional mark-up by Contractor of fifteen percent (15%) of the gross Media Fees. Any Media Fees incurred shall be billed for the month in which the Media Fees are incurred. Reports detailing all Media Fees, along with receipts, shall Agenda Page 156
be presented to CPA. All Media Fees must be approved by CPA in advance writing before they are incurred.
Any travel, administrative expenses, and materials (hereinafter, “Expenses”) will be billed in the amount incurred by Contractor for actual out-of-pocket cost, without any additional mark-up by Contractor. Any Expenses incurred shall be billed for the month in which the Expenses are incurred. Expense reports detailing all Expenses, along with receipts, shall be presented to CPA for reimbursement. All expenses must be approved by CPA in advance writing before they are incurred.
The Total Maximum Amount that CPA shall pay Contractor, including any subcontractor that the Contractor may retain, for all Services and Expenses to be provided under this Professional Services Agreement shall not exceed Two Million Fifty-Nine Thousand Dollars ($2,059,000) ("Not-to-Exceed" or "NTE") during the Initial Term.
The Total Maximum Amount that CPA shall pay Contractor, including any subcontractor that the Contractor may retain, for all Services and Expenses to be provided under this Professional Services Agreement shall not exceed Two Million Six Hundred Fifty-Five Thousand Three Hundred Twenty-Seven Dollars ($2,655,327) ("Not-to-Exceed" or "NTE") during the First Renewal Term and for any subsequently authorized Renewal Term.
Contractor shall satisfactorily perform and complete, in the judgement of CPA, all required Services in accordance with Exhibit A notwithstanding the fact that total payment from CPA shall not exceed the NTE.
Agenda Page 157
Staff Report – Agenda Item 7
To: Board of Directors
From: Tsemon Awala-Velly, Advisor, Structured Contracts Reviewed by: John McNamara, Director, Structured Contracts Lindsay Descagnia, Vice President, Power Supply
Matthew Langer, Chief Operating Officer
Nancy Whang, General Counsel
Approved By: Ted Bardacke, Chief Executive Officer
Subject: Amendment to the ESCA-PLD-SOUTHBAY2, LLC Power Share Renewable Power Purchase Agreement
Date: July 10, 2025
RECOMMENDATION
Approve the amendment to the Renewable Power Purchase Agreement with ESCA-PLD-SOUTHBAY2, LLC (“Prologis”) for the South Bay 6 local rooftop solar project and authorize the Chief Executive Officer to execute the amendment resulting in a payment to CPA in the amount of $227,700 and an extension of the commercial online date to May 30, 2026.
BACKGROUND
CPA's Power Share program promotes the development of renewable generation in and for underserved communities, providing enrolled customers with 100% renewable energy and a 20% bill discount. The Power Share program is funded through the California Public Utility Commission (“CPUC”) and includes a community solar component that the CPUC generically refers to as the Community Solar Green Tariff (“CSGT”). CPA’s name for CSGT is “Community Solar.”
Under the Community Solar program, enrolled customers receive 100% renewable energy from a project located within a disadvantaged community (DAC) in Southern California Edison territory that is also within five miles of the census tract in which the Agenda Page 158
Board of Directors Item 7
customer resides. A local community sponsor may also get a portion of the power and a bill discount. The CPUC reimburses CPA for (i) above-market procurement costs associated with Power Share resources, (ii) the 20% customer bill discount, (iii) program administration, and (iv) marketing, education, and outreach.
The Original South Bay 6 PPA
On September 7, 2023, the Board approved a 20-year Renewable Power Purchase Agreement (the “PPA”) for a 1.38 MW rooftop solar PV facility with Prologis (“South Bay 6”) to support the Community Solar program with an online date (Guaranteed Commercial Operation Date or “GCOD”) of June 1, 2025. This City of Carson is the local community sponsor of South Bay 6. As the state entity with funding oversight, the CPUC is also required to approve new PPAs, and the CPUC approved the PPA on October 26, 2023.
Prologis Request for GCOD Extension and Initial Payment The site of South Bay 6 is a warehouse. The solar project began experiencing delays due to issues outside of Prologis’s control relating to one of its warehouse tenants. The building where the rooftop solar project will be located is leased by a tenant who uses the building as a food handling site and as such, the site is regulated by the Food and Drug Administration (“FDA”). In working through project approvals and permits, Prologis and the tenant received unanticipated requests from the FDA requiring additional roofing remediations to be made before solar could be installed on the roof. This caused the construction schedule to be delayed and led Prologis to request an amendment to the PPA to adjust the GCOD of the South Bay 6 project by 12 months or until May 30, 2026, to accommodate its current construction schedule.
The South Bay 6 PPA allows Prologis to pay One Thousand Three Hundred and Eighty Dollars ($1,380) per day as Commercial Operation Delay Damages (“COD Delay Damages”) to extend the GCOD up to a total of 90 additional days. Prologis paid CPA COD Delay Damages for up to 60 days in the amount of $82,800, which extended the GCOD by 60 days (from June 1, 2025 to July 31, 2025). Under the PPA, Prologis can only extend the GCOD by an additional 30 days to the end of August, 2025 with an additional payment of $41,400 in COD Delay Damages. A 30-day extension would not be sufficient for Prologis to complete the roofing remediation required by the FDA and the Agenda Page 159
Board of Directors Item 7
construction of the South Bay 6 solar project. Failure to amend the PPA would put South Bay 6 at risk for termination and CPA would likely lose this project to support CPA’s Community Solar program.
RATIONALE FOR AMENDMENT
The South Bay 6 project is an important project to CPA’s Community Solar program. The South Bay 6 project offers a near-term online date with much of the development risk mitigated. This is significant because although CPA may be able to replace the project through a future Power Share Request for Offers (RFO), any replacement project would likely have a later GCOD and higher development risk.
This near-term online date also allows CPA to provide discounted renewable energy to CPA’s customers with greater certainty for those customers who are enrolled on an interim basis and to expand enrollment access to additional customers who are waiting to enroll once the project comes online. If the project were to be terminated, these customers may either lose access to the program or never be enrolled, depriving them of the benefit of 100% renewable energy at a 20% bill discount.
Given the benefits that the South Bay 6 project offers to CPA and its customers, CPA entered into negotiations with Prologis to explore an extension of the GCOD to May 30, 2026, in exchange for a payment from Prologis. Prologis, for its part, having encountered uncertainty, delays, and costs due to unanticipated tenant improvements, indicated a need for certainty around its maximum liability prior to GCOD.
CPA staff negotiated a proposed amendment to the PPA which extends the GCOD from July 31, 2025 to May 30, 2026, contingent upon Prologis paying CPA Two Hundred and Twenty-Seven Thousand and Seven Hundred Dollars ($227,700) for this 12-month delay (“Negotiated Payment”). This payment is approximately Two Hundred and Seventy-Three Thousand Two Hundred and Forty Dollars ($273,240) less than the payment CPA would receive for an equivalent extension at the COD Delay Damages rate.
Agenda Page 160
Board of Directors Item 7
Additionally, this amendment increases the cap of Prologis’s maximum pre-COD liability to three times Prologis’s Development Security1 amount if Prologis fails to achieve COD by June 30, 2026. Prologis requested a pre-COD liability cap because it is taking on the risk of additional costs and capital. CPA agreed to a cap due to Prologis’s investments and costs but negotiated one that is three times the value of the Development Security as this multiplier captures the full value of the COD Delay Damages already paid by Prologis, the Negotiated Payment, and a portion of the Development Security should the project be terminated prior to COD.
After the amendment, Prologis maintains its right to pay COD Delay Damages for 30 additional days to unilaterally extend the GCOD to June 30, 2026. If, after this amendment, Prologis needs to extend the GCOD past June 30, 2026, the parties must mutually agree to allow Prologis to pay additional COD Delay Damages, and this additional payment will not be counted towards the pre-COD liability cap, which would be a benefit to CPA. In addition, if the parties cannot agree and the PPA terminates, CPA maintains its right to keep a portion of Prologis’s Development Security.
CPA staff recommend approving this amendment because of this project’s importance to CPA customers accessing the Community Solar Program, and on balance, believes that the amendment, including the payment to CPA, results in an outcome that is beneficial to CPA.
CPUC APPROVAL
The CSGT program is regulated by the CPUC and the CPUC is reimbursing CPA for above-market and other program costs. As such, CPA is required to submit PPA amendments for approval by the CPUC when an amendment would increase program costs. CPUC Approval is not required for this amendment because it does not include an increase to the PPA contract price and the project continues to comply with program requirements.
1 The Development Security for South Bay 6 is $124,200.
Agenda Page 161
Board of Directors Item 7
ATTACHMENT
1. Amendment to the Renewable Purchase Agreement with ESCA-PLD-SOUTHBAY2, LLC
Agenda Page 162
1 AMENDMENT NO. 1 TO POWER PURCHASE AGREEMENT
This Amendment No. 1 (the “First Amendment”) to the Agreement (as defined below), is dated as of July ___, 2025 (the “First Amendment Effective Date”), between Clean Power Alliance of Southern California, a California joint powers authority (“Buyer”), and ESCA-PLD-SOUTHBAY2, LLC, a Delaware limited liability company (“Seller”). Seller and Buyer are each a “Party” and together the “Parties”. Capitalized terms used and not defined in this First Amendment have the respective meanings assigned to them in the Agreement (as defined below).
RECITALS
A. The Parties entered into that certain Renewable Power Purchase Agreement, dated as of September 19, 2023 (as may be amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms thereof, the “Agreement”). The Agreement contains a Guaranteed Commercial Operation Date of June 1, 2025.
B. On May 22, 2025, Seller paid Commercial Operation Delay Damages and delivered a Notice to the Buyer to extend the Guaranteed Commercial Operation Date to July 1, 2025.
C. On June 20, 2025, Seller paid additional Commercial Operation Delay Damages and delivered a Notice to the Buyer to extend the Guaranteed Commercial Operation Date to July 31, 2025.
D. Notwithstanding the extension of the Guaranteed Commercial Operation Date to July 31, 2025, Seller has informed Buyer that Seller is unlikely to achieve Commercial Operation on or prior to July 31, 2025, and so the Parties have agreed to extend the Guaranteed Commercial Operation Date from July 31, 2025 through May 31, 2026 in exchange for Seller’s payment of a Negotiated Amount (as defined below).
E. The Parties now intend to amend the Agreement as set forth herein.
NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. Negotiated Payment and Guaranteed Commercial Operations Date Extension.
The Parties agree that, in consideration for Seller’s payment to Buyer of a fixed amount of Two Hundred and Twenty-Seven Thousand and Seven Hundred Dollars ($227,700) (the “Negotiated Amount”) within ten (10) days of the Parties’ execution of this First Amendment, the Guaranteed Commercial Operations Date under the Agreement will automatically be extended to May 31, 2026.
2. Amendments to the Agreement.
(a) The following defined terms are added to the definitions in Section 1.1 in alphabetical order. “First Amendment” means the first amendment to this Agreement executed by the Parties as of the First Amendment Effective Date.
“First Amendment Effective Date” means the date assigned such meaning in the First Amendment.
“Seller Pre-COD Liability Limit” has the meaning set forth in Section 12.2.
Agenda Page 163
2 “Negotiated Amount” has the meaning set forth in the First Amendment. (b) The definition of “Commercial Operation Delay Damages” in Section 1.1 is deleted and replaced with:
“Commercial Operation Delay Damages” means an amount equal to (a) the Development Security amount required hereunder, divided by (b) ninety (90) one thousand, three hundred and eighty dollars ($1,380) per day.” (c) The first paragraph of Section 12.2 shall be replaced in its entirety as follows:
“WAIVER AND EXCLUSION OF OTHER DAMAGES. EXCEPT AS SET
FORTH IN SECTION 11.6, UNLESS AND UNTIL THE FACILITY HAS ACHIEVED COMMERCIAL OPERATION, SELLER’S AGGREGATE
LIABILITY UNDER THIS AGREEMENTFOR PAYMENT OF DAILY DELAY
DAMAGES, COMMERCIAL OPERATION DELAY DAMAGES, AND THE
DAMAGE PAYMENT, INCLUDING THE NEGOTIATED AMOUNT, SHALL
NOT EXCEED A TOTAL EQUAL TO THREE HUNDRED PERCENT (300%) OF THE DEVELOPMENT SECURITY AMOUNT (THE “SELLER PRE-COD LIABILITY LIMIT”). UNLESS THE PARTIES AGREE TO ALLOW SELLER
TO PAY COMMERCIAL OPERATION DELAY DAMAGES TO EXTEND
THE GUARANTEED COMMERCIAL OPERATION DATE PAST JUNE 30,
2026 IN ACCORDANCE WITH SECTION 2(b) OF EXHIBIT B. ANY
COMMERCIAL OPERATION DELAY DAMAGES PAID BY SELLER TO
EXTEND THE GUARANTEED COMMERCIAL OPERATION DATE PAST
JUNE 30, 2026 SHALL NOT BE COUNTED TOWARDS THE SELLER’S PRE-COD LIABILTIY LIMIT CALCULATION. FOR AVOIDANCE OF DOUBT, THIS SECTION 12.2 SHALL NOT LIMIT SELLER’S OBLIGATIONS OR LIABILITIES UNDER SECTION 11.6.
EXCEPT AS EXPRESSLY SET FORTH HEREIN, THERE IS NO WARRANTY
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND ANY AND ALL IMPLIED WARRANTIES ARE DISCLAIMED. THE
PARTIES CONFIRM THAT THE EXPRESS REMEDIES AND MEASURES
OF DAMAGES PROVIDED IN THIS AGREEMENT SATISFY THE
ESSENTIAL PURPOSES HEREOF. ALL LIMITATIONS OF LIABILITY
CONTAINED IN THIS AGREEMENT, INCLUDING THOSE PERTAINING TO SELLER’S LIMITATION OF LIABILITY AND THE PARTIES’ WAIVER
OF CONSEQUENTIAL DAMAGES, SHALL APPLY EVEN IF THE
REMEDIES FOR BREACH OF WARRANTY PROVIDED IN THIS
AGREEMENT ARE DEEMED TO “FAIL OF THEIR ESSENTIAL PURPOSE” OR ARE OTHERWISE HELD TO BE INVALID OR UNENFORCEABLE.
. . .”
(d) Section 2(b) of Exhibit B is deleted and replaced with the following:
“Seller may extend the Guaranteed Commercial Operation Date by paying Commercial Operation Delay Damages to Buyer for each day Seller desires to extend the Guaranteed Commercial Operation Date, not to exceed a total of ninety thirty (390) days of extensions by such payment of Commercial Operation Delay Damages. The Parties may further mutually agree, each in their absolute discretion, to allow Seller to further extend the Guaranteed Commercial Operation Date past Agenda Page 164
3 June 30, 2026 by paying Commercial Operation Delay Damages to Buyer for each day Seller desires to extend the Guaranteed Commercial Operation Date past June 30, 2026; provided, the payment of any such Commercial Operation Delay Damages paid by Seller to extend the Guaranteed Commercial Operation Date past June 30, 2026 shall not be taken into account in determining whether the Seller Pre-COD Liability Limit set forth in Section 12.2 has been achieved. provided that, no Daily Delay Damages shall be due or payable to effectuate an Interconnection Delay Milestone Adjustment On or before the date that is ten (10) days prior to the then-current Guaranteed Commercial Operation Date Seller shall provide Notice and payment to Buyer of the Commercial Operation Delay Damages for the number of days Seller proposes to extend the Guaranteed Commercial Operation Date past June 30, 2026. If Buyer agrees to such proposed extension, and Seller achieves Commercial Operation prior to the Guaranteed Commercial Operation Date as extended by the payment of Commercial Operation Delay Damages of extension to the Guaranteed Commercial Operation Date. If Seller achieves Commercial Operation prior to the Guaranteed Commercial Operation Date as extended by the payment of Commercial Operation Delay Damages Buyer shall refund to Seller the Commercial Operation Delay Damages for each day Seller achieves Commercial Operation prior to the Guaranteed Commercial Operation Date times the Commercial Operation Delay Damages, not to exceed the total amount of Commercial Operation Delay Damages paid by Seller pursuant to this Section 2.b.”
3. Limited Effect. Except as expressly provided in this First Amendment, all of the terms and provisions of the Agreement are and will remain in full force and effect and are hereby ratified and confirmed by the Parties. Without limiting the generality of the foregoing, the amendments contained herein will not be construed as an amendment to or waiver of any other provision of the Agreement or as a waiver of or consent to any further or future action on the part of either Party that would require the waiver or consent of the other Party. On and after the First Amendment Effective Date, each reference in the Agreement to “this Agreement,” “the Agreement,” “hereunder,” “hereof,” “herein” or words of like import will mean and be a reference to the Agreement as amended by this First Amendment.
4. Miscellaneous.
(a) This First Amendment is governed by and construed in accordance with, the laws of the State of California, without regard to the conflict of laws provisions of such State. (b) This First Amendment shall inure to the benefit of and be binding upon each of the Parties and each of their respective successors and permitted assigns. (c) The headings in this First Amendment are for reference only and do not affect the interpretation of this First Amendment.
(d) This First Amendment may be executed in counterparts, each of which is deemed an original, but all of which constitutes one and the same agreement. Delivery of an executed counterpart of this First Amendment electronically or by facsimile shall be effective as delivery of an original executed counterpart of this First Amendment.
(e) This First Amendment constitutes the sole and entire agreement between the Parties with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter.
(f) Each Party shall pay its own costs and expenses in connection with this First Amendment Agenda Page 165
4 (including the fees and expenses of its advisors, accounts and legal counsel). [Signature Page Follows]
Agenda Page 166
5 IN WITNESS WHEREOF, the Parties have executed this First Amendment effective as of the First Amendment Effective Date written above.
“SELLER:”
ESCA-PLD-SOUTHBAY2, LLC
By:
Printed Name: Natasha Keefer
Title: Vice President, Origination & Power Marketing - Americas “BUYER:”
CLEAN POWER ALLIANCE OF SOUTHERN CALIFORNIA
By:
Printed Name: Ted Bardacke
Title: Chief Executive Officer
Agenda Page 167
Staff Report – Agenda Item 8
To: Board of Directors
From: Gina Goodhill, Senior Director, Government Affairs Approved By: Ted Bardacke, Chief Executive Officer
Subject: Receive and File July 2025 Bill Positions Report Date: July 10, 2025
RECOMMENDATION
Receive and file.
ATTACHMENT
1. 2025 Legislative and Regulatory Policy Platform
Agenda Page 168
Board of Directors Item 8
Bill Number &
Author
Title & Summary Status CPA Position Alignment with
CPA Policy
Platform
Notes
AB 729
Assemblymember Rick
Zbur
Public Utilities, Climate
Credits: Would move the
California Climate Credit on
customer bills from April and
October to August and
September.
6/05/25
Referred to
Senate
Committee on
Energy, Utilities
and
Communications
Sponsor 5a August and
September are the
two months (along
with July) in which
CPA customers
typically have their
highest electricity
bills. In CPA territory,
close to 1/3 of
customers on an
income-qualified rate
are unable to pay
their full bills in
September. Moving
the Climate Credit to
hotter months will
lower electricity bills
during the months
when customers
most need it.
SB 330
Senator Steve Padilla
Electrical transmission
infrastructure: financing
Would identify transmission
infrastructure pilot projects
6/9/25
Referred to
Assembly
Committee on
Support 1e This bill explores a
public-private
partnership model to
develop
Agenda Page 169
Board of Directors Item 8
that state or local public
agencies could develop,
finance, or operate.
Utilities and
Energy, and
Committee on
Natural
Resources
transmission, which
could bring down the
cost of transmission
for ratepayers by
leveraging the
municipal tax status
afforded to public
agencies.
SB 540
Senator Josh Becker
Independent System
Operator: independent
regional organization
Pathways bill to establish a
regional energy cooperative
(“regionalization”) to optimize
California’s energy markets,
increase grid reliability,
reduce costs to ratepayers,
and accelerate the transition
to clean energy.
6/05/25
In Assembly.
Read first time,
held at desk.
Support 2g This is the
“regionalization” bill
that CPA has been
tracking since the
Pathways
conversation began
several years ago
and which the Board
took a support
position on the
concept in December
2023. While it has not
yet been assigned to
a Committee, the bill
is expected to
continue to move
forward. Recent
amendments may
weaken the viability
Agenda Page 170
Board of Directors Item 8
of Pathways even if
the bill is ultimately
signed into law.
SB 239
Senator Jesse Arreguin
Open meetings:
teleconferencing:
subsidiary body. Would
allow subsidiary bodies of a
local agency to hold
teleconference meetings
without having to notice and
make publicly available each
teleconference location
Inactive Support 5c This bill would allow
our Community
Advisory Committee
to meet remotely,
thus increasing
opportunities for the
participation of
volunteers.
AB 740
Assemblymember John
Harabedian
Virtual power plants: load
shifting Would require the
CPUC to create a strategy
and perform a study to better
understand the impact of
virtual power plants (VPP) on
the grid.
6/11/25
Referred to
Senate
Committee on
Energy, Utilities
and
Communications.
Support 2a, 2d Virtual power plants
consist of a network
of decentralized,
medium scale power
generating units and
flexible loads such as
batteries, EVs, smart
appliances, and
flexible heating and
cooling loads
AB 306
Assemblymember Nick
Schultz
Building regulations: state
building standards
Would prohibit a city or
county from making changes
6/25/25
AB 306 language
was inserted into
SB 130, the
Oppose Unless
Amended
3a, 3b This will impact
CPA’s Reach Code
Program and the
work of many of our
Agenda Page 171
Board of Directors Item 8
to the building code until
June 1, 2031, with limited
exceptions.
Housing Budget
Bill. As such, AB
306 is unlikely to
move in its
current form.
Instead, it will be
signed into law as
part of the state
budget.
member agencies to
advance building
decarbonization
through reach codes.
Despite a strong
coalition effort,
language has been
approved that would
apply to both new
and existing
construction and
would go into effect
beginning Oct 1,
2025.
AB 1260
Assemblymember
Christopher Ward
Renewable energy
subscription programs
Would re-open the
community solar proceeding
at the CPUC to modify the
calculations in avoided costs,
among other things.
5/23/25
Bill no longer
moving
Watch 3c This could have an
impact on CPA’s
Power Share
program.
AB 303
Assemblymember Dawn
Addis
Battery Storage Facilities
Imposes requirements to site
battery storage facilities,
uses the same sensitive
receptors, land use
Bill no longer
moving
Watch 2a
Agenda Page 172
Board of Directors Item 8
restrictions, and set back
requirements as new oil well
requirements.
SB 283
Senator John Laird
Energy storage systems.
Establishes the Clean
Energy Safety Act of 2025
and requires energy storage
systems authorized by the
CEC or a local government
to comply with new fire safety
standards.
6/27/25
Referred to
Assembly
Committee on
Local
Government
Watch 2a This bill is a response
to growing public
concern over fires in
large battery energy
storage systems
(BESS). CPA
generally supports
the maintenance and
operation standards
proposed in this bill
and is working with
CalCCA to suggest a
few small changes.
SB 256
Senator Sasha Renee
Perez
Electricity: electrical
infrastructure. Would
require electrical utilities to
prioritize undergrounding of
power lines, strengthen
public safety power shut off
standards and accountability,
requires union labor for the
undergrounding. Would also
grant CPUC the ability to
6/25/25
Hearing date in
Assembly
Committee on
Utilities and
Energy TBD.
Watch 2e, 3b, 3c
Agenda Page 173
Board of Directors Item 8
immediately access all
relevant fault data related to
natural disasters.
AB 1117
Assemblymember Nick
Schultz
Electricity: rates: optional
dynamic rate tariffs
Would require the CPUC to
develop optional dynamic
rate tariffs and would give
ratepayers the options to
elect a dynamic rate tariff
6/11/25
Referred to
Senate
Committee on
Energy, Utilities
and
Communications
Watch 1a
SB 541
Assemblymember Josh
Becker
Electricity: load shifting:
dynamic pricing
Would require the CEC to
allocate load shifting goals to
load serving entities (LSE),
would require LSE’s to meet
load-shifting goals and to
offer dynamic pricing tariffs.
6/26/25
Referred to
Assembly
Committee on
Utilities and
Energy
Watch 1a, 1d There are concerns
that this bill could
infringe on CCA
autonomy and create
duplicative
requirements in
relation to recent
CEC and CPUC
rulemakings on
dynamic pricing.
AB 825
Assemblymember Cottie
Petrie-Norris
Public Transmission
Financing Act of 2025
Would create a Public
Transmission Program that
would utilize $325 million of
Proposition 4 funds to fund
6/18/25
Referred to
Committee on
Energy, Utilities
and
Communications
Watch 1e, 2d This is another bill
that explores
opportunities to
reduce transmission
costs through a
public-private
Agenda Page 174
Board of Directors Item 8
efforts to lower the cost of
transmission projects
and Committee
on Business,
Professions and
Economic
Development
partnership. This bill
also suggests new
oversight over all
energy efficiency and
demand response
programs, including
those run by CCAs.
SB 254
Senator Josh Becker
Electricity: wildfire
mitigation: rate assistance:
Policy-oriented and wildfire
electric reimbursement
(POWER) Program
Would create a statewide
authority to develop
transmission and other
infrastructure; would
overhaul the framework for
oversight of wildfire
mitigation; increases the
climate credit for
CARE/FERA customers;
increases the burden of proof
for IOUs to raise rates, and
more.
6/16/25
Referred to
Assembly
Committee on
Utilities and
Energy and
Committee on
Natural
Resources
Watch 1e, 2d, 4b, 5a This is one of the
main vehicles in the
Senate to tackle
energy affordability,
wildfires costs, and
rates transparency.
AB 942
Assemblymember Lisa
Calderon
Net energy metering:
eligible customer-generators: tariffs
6/18/25
Referred to
Senate
Watch 3a, 5c This bill was recently
amended to remove
the proposed sunset
Agenda Page 175
Board of Directors Item 8
Would require new property
owners inheriting solar
systems to take service
under the current, not
inherited NEM tariff, and
would disqualify a customer-generator from receiving the Climate Credit.
Committee on
Energy, Utilities
and
Communications
to legacy NEM
contracts after 10
years
AB 1408
Assemblymember Jacqui
Irwin
Electricity:
interconnections
Would require electric utilities
and the CAISO to consider
“surplus interconnection” as
part of various transmission
and distribution planning.
6/19/25
Referred to
Senate
Committee on
Energy, Utilities
and
Communications
Watch 1e, 2d Surplus
Interconnection
Service is potentially
a medium-term
solution to reducing
delays in the
interconnection
process by allowing
clean energy projects
to connect to the grid
through the unused
portion of an existing
generator’s point of
interconnection.
AB 745
Assemblymember Jacqui
Irwin
Electricity: climate credits
Would move the California
Climate Credit on customer
bills from April and October
6/18/25
Referred to
Senate
Committee on
Watch 5a Along with AB 729,
SB 254, and AB 942,
this is one of several
bills that makes
Agenda Page 176
Board of Directors Item 8
to July, August and
September. It would also
calculate credit on a
volumetric basis, rather than
a fixed amount.
Energy, Utilities
and
Communication
changes to the
California Climate
Credit.
Agenda Page 177
Final 2025 Legislative and Regulatory Policy Platform
Overview and Purpose
The Clean Power Alliance (CPA) Legislative and Regulatory Policy Platform (Platform) serves as a guide to the CPA Board of Directors and CPA staff in their advocacy efforts and engagement on policy matters of interest to CPA. The Platform allows both members of the CPA Board of Directors and CPA staff to pursue actions at the regional, state and federal legislative and regulatory levels in a consistent manner and with the understanding that they are pursuing actions in the best interest of the organization and its mission, its member agencies, and its customers.
The Platform provides direction to CPA staff on positions that should be taken on regulatory matters and legislative bill proposals. The Platform also provides guidance to the Chief Executive Officer on positions that should be taken on legislative and regulatory matters that come before the California Community Choice Association (CalCCA) Board of Directors.
CPA staff report to the Board monthly on all positions taken on legislative bills. For bills that fall outside the scope of this platform; bills that are likely to attract high-profile supporters and detractors, including bills that would modify the California Environmental Quality Act (CEQA); bills that would raise taxes; or bills that would knowingly put CPA at odds with positions that its member agencies have taken, CPA staff will seek approval of a proposed position to the Legislative & Regulatory Committee and Board of Directors before taking a position.
Policy Principles
The Legislative and Regulatory Policy Platform is centered around five basic principles:
1. Protecting CPA’s local control and competitive position, especially as it relates to rates, finances, power procurement and expansion of its service territory.
2. Pursing power resource planning and procurement that promotes the growth in renewable energy capacity at the local, state, and regional level and reduces fossil fuel dependency, with the goal of combating climate change.
Agenda Page 178
3. Developing and administering customer programs that encourage clean energy adoption by CPA customers and the use of that clean energy in an efficient and managed way to support cost reduction and grid reliability.
4. Ensuring fair access to data, particularly as it relates to energy usage, billing, and information needed to develop and administer customer programs.
5. Supporting CPA’s ability to set electric rates and offer programmatic services that are affordable and inclusive for all.
These principles are incorporated throughout the below platform.
Policy Platform
1. Affordability and Local Control
a. Fair rates and cost allocation: CPA will pursue administrative and legislative initiatives that will ensure that non-bypassable charges for CPA customers, including any income-graduated fixed charges, are assessed fairly compared to bundled customers and that CPA’s customers are not unnecessarily burdened by non-bypassable charges.
b. Finances: CPA will pursue administrative and legislative initiatives to ensure that CPA is eligible to apply and receive funding made available to the electricity sector for decarbonization, reliability, and affordability purposes, and that CPA’s financial health is not disparately impacted by new regulations. c. CCA Expansion: CPA will pursue administrative and legislative initiatives to protect CPA’s ability to expand its service to new member agencies. d. Local Control: CPA will pursue administrative and legislative initiatives to protect CPA Board’s authority over CPA’s procurement, rate-setting, governance, and customer program development activities.
e. Infrastructure Financing: CPA will pursue administrative and legislative initiatives that support alternative approaches to financing energy infrastructure that reduce costs for all customers.
2. Power Resources Planning and Procurement
Agenda Page 179
a. Resource Adequacy and Reliability: CPA will pursue administrative and legislative initiatives that will enable CPA to secure capacity resources to meet its reliability obligations, such as initiatives that evaluate the supply of capacity resources available to load serving entities (LSEs), determine the appropriate market mechanisms for LSEs to procure capacity resources, and develop a durable policy framework that encourages all LSEs to construct their fair share of new capacity resources to maintain grid reliability while pursuing decarbonization efforts.
b. Renewable and Carbon-Free Resources: CPA will pursue administrative and legislative initiatives that will maximize CPA’s ability to procure eligible Renewable Portfolio Standard (RPS) and carbon-free resources to meet the needs of CPA’s three product offerings and its long-term RPS procurement goal as required by SB 100 and other statutory or regulatory obligations. c. Integrated Resource Plan: CPA will pursue administrative and legislative initiatives that will maximize CPA’s ability to plan and procure resources to meet various environmental and reliability goals set by state laws and by its Board of Directors, while offering affordable products and programs to serve its customers, including disadvantaged communities.
d. Transmission: CPA will pursue administrative and legislative initiatives that will expedite new transmission infrastructure needed to meet California’s climate goals, as well as initiatives that will provide CPA adequate access to transmission capacity to maximize its procurement of RPS-eligible or carbon-free resources that meet various statutory and regulatory requirements. e. Access to the Electrical Grid: CPA will pursue administrative and legislative initiatives that support reducing timelines in interconnection and service extensions for new construction, critical services, renewable energy, building decarbonization, and other projects in CPA’s service territory. f. Research & Development: CPA will pursue administrative and legislative initiatives that support the research and development of new energy resources that can be procured to meet the reliability and decarbonization goals set by the State and its Board of Directors.
g. Grid Reliability: CPA will pursue administrative and legislative initiatives that support the expansion of a regional Western energy grid that improves reliability; accelerates decarbonization; improves transmission planning; reduces costs for ratepayer and load serving entities; maintains California’s ability to set, meet
Agenda Page 180
and implement its own climate goals; and protects clean energy jobs within the State.
3. Customer Programs
a. Demand Response, Demand Flexibility and Energy Efficiency: CPA will pursue administrative and legislative initiatives that will enable CPA and its customers to develop and participate in programs that promote the use of clean energy in an efficient and managed way to support cost reduction, grid reliability, and lower greenhouse gas emissions.
b. Building and vehicle decarbonization: CPA will pursue administrative and legislative initiatives that support the ability of CPA to promote statewide building and vehicle decarbonization, primarily through electrification. c. Local Grid Management and Resiliency: CPA will pursue administrative and legislative initiatives that supports the ability of CPA and its member agencies to offer local grid management and resiliency solutions to increase local reliability, and adaptability that could protect against power outages and extreme heat. d. Research and Development: CPA will pursue administrative and legislative initiatives that support the ability of CPA to explore new opportunities related to behind the meter clean energy resources.
4. Data Access
a. Timely and Accurate Access to Customer Data: CPA will pursue administrative and legislative initiatives that will enable CPA to obtain timely and accurate access to its customers’ data to improve billing accuracy and inform the development and implementation of customer programs.
a. Fair Fees for Data Management Services: CPA will pursue administrative and legislative initiatives to ensure that the fees due to Southern California Edison for data access and management are fairly assessed based on data needs and potential technological improvements.
b. Billing Transparency: CPA will pursue administrative and legislative initiatives that increase customer understanding of electricity bill components and display
Agenda Page 181
electricity charges in a clear and consistent manner for both bundled and unbundled customers.
5. Diversity, Equity, Inclusion
a. Customer Protection: CPA will pursue administrative and legislative initiatives that support the protection of all ratepayers, particularly environmental and social justice communities in CPA’s service territory.
b. Supplier Diversity: CPA will pursue administrative and legislative initiatives that supports supplier diversity in CPA’s contracting activities and through women-owned, minority-owned, disabled-veteran-owned, and lesbian, gay, bisexual, and/or
c. Energy Equity: CPA will pursue administrative and legislative initiatives that support increased access to clean energy technologies, workforce development initiatives that support the clean energy industry, and clean energy opportunities for environmental and social justice communities in CPA’s service territory.
Agenda Page 182
Staff Report – Agenda Item 9
To: Board of Directors
From: Christian Cruz, Senior Community Outreach Manager Approved by: Ted Bardacke, Chief Executive Officer
Subject: Community Advisory Committee (CAC) Report
Date: July 10, 2025
RECOMMENDATION
Receive and file.
MEETING REPORT
The Community Advisory Committee did not meet in June.
Agenda Page 183
Management Report
To: Board of Directors
Subject: Management Report
Date: July 10, 2025
New Dates for Board Retreat and October Board Meeting
The annual Board Retreat has been rescheduled to September 26, from 8:30am to 2pm in the City View Penthouse of South Park Center, 1150 S Olive St, Los Angeles, California, 90015. Study materials will be updated given the tax bill recently passed by Congress, which will have implications for the clean energy industry. Please RSVP to [email protected] by August 15.
To avoid conflicts with Yom Kippur and the Cal Cities Annual Conference, CPA’s October Board meeting is being moved to October 16 at 2:00pm. The Executive Committee meeting slated to be held that same day will be rescheduled.
Summer Program Marketing
With rising heat and higher electricity bills, summer is a prime time for the marketing of CPA’s customer programs. Summer marketing emphasis includes:
• Instant AC Savings – Highlighting $300 in savings for income-eligible customers to purchase an energy efficient room air conditioner via radio, bus interior cards, laundromat signage, direct mail letter and postcard, social media and email. • Power Response – Reminding customers that signing up for this program brings financial rewards via video, email, business reply mailers, digital ads, radio, and weather-triggered digital billboards.
• Sun Storage Rebate – Sharing ways for customers to benefit from a financial incentive to install a battery and maximize their solar investment through podcast ads, search engine ads, social media, email, and postcard. • Solar and Battery Access – Encouraging income-eligible homeowners to apply for installation of a home solar system to save on their electricity bill via social
Agenda Page 184
Board of Directors Management Report
media, bus shelters, digital billboards in shopping centers and other targeted locations, streaming audio, radio and direct mail.
• EV SmartCharge – Promoting bill savings and personalized charging at home via radio, EV chargers, the PlugShare app, search engine ads, digital billboards, social media, email, postcard, and letter.
• Energy Team – Bringing awareness about CPA’s free energy retrofit analysis service via radio, email, postcard, social media, search engine ads, and broadcast television.
Information about these programs, including downloadable fact sheets and talking points, is available on your Board portal. Access the portal at cleanpoweralliance.org/portal/login.
If you need assistance logging in or have portal questions, please contact CPA’s Senior Director of Government Affairs Gina Goodhill at [email protected].
Letter to CPUC Regarding CPA Customer Access to Self Generation Incentive Program (SGIP) Funds
CPA’s Legislative and Regulatory Committee sent a letter to the California Public Utilities Commission regarding an issue whereby CPA customers, as well as customers of other CCAs statewide, are at risk of being denied access to SGIP funds, which help subsidize battery installations. The letter is provided as Attachment 1 and an update on the CPUC response will be provided verbally at the Board meeting.
Monthly Financial Performance
CPA’s net position in April increased by $25.5 million, 7.3% less than the budgeted increase of $32.8 million. April results were below budget largely due to the interim rate reduction approved by the Board in February and which took effect in March, as well as cooler than normal weather. For the year-to-date, CPA has recorded an increase to the net position of $103.4 million, 98% higher than the budgeted net increase of $52.2 million.
The monthly financial dashboard for April is provided in Attachment 2.
Customer Participation Rate and Opt Actions
As of July 3, 2025, CPA’s overall participation rate was 92.9%, up slightly from the 92.8% participation rate recorded in the previous month. CPA had 1,040,001 active customers at the end of June, up 689 customers compared to the end of April. Opt-outs for the month Agenda Page 185
Board of Directors Management Report
– 575 – were similar to May, which posted 322 opt-outs. New accounts (“move-ins”) were higher than closed accounts (“move-outs”) by 63 customers in the same time period.
Participation rates and active accounts by member agency are provided in Attachment 3.
Customer Service Center Performance
Incoming calls to CPA’s Customer Service Center were flat in June compared to the previous month and typical for the monthly average for the second quarter of the year. In June, CPA received 2,371 calls, compared to 2,047 calls in May. Call center performance was steady, with 99% of calls answered within 45 seconds in June, compared to 98% the previous month. Average call center wait time was 4 seconds, compared to 5 seconds in May.
Contracts and Amendments Executed Under the CEO Authority A list of amendments to, and terminations of, Long-Term Power Purchase Agreements and Energy Storage Agreements executed under the CEO’s signing authority since July 2024 is provided in Attachment 4. A list of non-energy contracts executed under the CEO’s signing authority is provided in Attachment 5. This list includes all open contracts as well as all contracts, open or completed, executed in the past 12 months.
ATTACHMENTS
1. Letter to CPUC Regarding CPA Customer Access to SGIP Funds
2. April Financial Dashboard
3. Participation Rates by Member Agency
4. Long Term PPA/ESA Amendments Executed under CEO’s Authority
5. Non-Energy Contracts Executed under CEO’s Authority
Agenda Page 186
June 26, 2025
Commissioner Karen Douglas
Leuwam Tesfai, Deputy Executive Director for Energy and Climate Policy Candace Morey, Interim Director of Distributed Energy Resources, Natural Gas & Retail Rates California Public Utilities Commission
505 Van Ness Avenue
San Francisco, CA 94102
Re: Community Choice Aggregator Customers’ Access to Self-Generation Incentive Program Funding
Dear Commissioner Douglas, Ms. Tesfai, and Ms. Morey:
Clean Power Alliance of Southern California (“CPA”) submits this letter to request that the California Public Utilities Commission (“Commission”) act immediately to approve Southern California Edison Company’s (“SCE”) Advice Letter 5500-E-A (“AL”).
I. Background
CPA is California’s largest community choice aggregator (“CCA”), serving over three million residents, 25% of whom are low-income, and one million customers across 38 communities in Los Angeles and Ventura counties.1 CPA is governed by a Board of locally elected officials who represent and serve our communities.
On March 12, 2025, SCE submitted AL 5500-E on behalf of CPA, which included a memorandum developed by CPA and program materials demonstrating that CPA’s three demand response (“DR”) programs meet the applicable requirements to be qualified DR programs for the purposes of the Self-Generation Incentive Program (“SGIP”).
On March 28, 2025, SCE submitted supplemental AL 5500-E-A at CPA’s request, seeking to qualify three of CPA’s DR programs as economic supply-side market integrated DR programs or a critical peak pricing program. Unfortunately, that AL was suspended, leaving over 900,000 residential CPA customers without a certain, viable pathway to obtain SGIP incentives. 1 CPA serves just under 910,000 residential customer accounts, about 224,000 of those accounts access California Alternate Rates for Energy (“CARE”) or Family Electric Rate Assistance Program (“FERA”) benefits.
Agenda Page 187
II. There are Good Reasons for the Commission to Act on SCE’s AL Immediately A. The Commission Should Remove Barriers for Demand Response Programs The Commission’s action is required to remove the barriers that CPA’s residential customers face in accessing SGIP funds. Currently, no qualified DR program is available to residential CPA customers to access SGIP incentives.
B. There is Currently No Viable Path for CPA’s Customers to Participate in SGIP With the AL suspended, CPA’s residential customers have no viable path to access SGIP funds intended to incentivize installation of storage equipment. In 2018, the Legislature passed and Governor Brown signed Senate Bill 700 which requires the Commission to “ensure that distributed generation resources are made available in the program for all ratepayers.”2 The current SGIP framework and protracted Commission review process for advice letters seeking to qualify DR programs effectively limit SGIP resource availability to only investor-owned utility (“IOU”) customers, not all ratepayers, including CCA customers.
The existing SGIP framework also prevents CPA customers from accessing SGIP funds by participating in SCE’s DR programs. In D.23-12-005, the Commission created a definition of a “qualified demand response program” and in D.24-03-071, the Commission established a list of qualified DR programs exclusively for SGIP. The list established in D.24-03-071 only qualified IOU DR programs for the purposes of SGIP. SCE’s qualified DR programs on the list either 1) prohibit CPA customer participation entirely (such as SCE’s Critical Peak Pricing program), 2) are no longer offered (such as SCE’s Capacity Bidding Program).3 D.24-03-071 also created a process for CCAs to qualify their DR programs for SGIP, but unfortunately no CCA’s programs have been qualified through that process. Following the steps specified in D.24-03-071, on March 12, 2025, CPA coordinated with SCE and SCE submitted an advice letter, SCE AL 5500-E, and supporting materials seeking approval for CPA’s DR programs. At CPA’s request, on March 28, 2025, SCE submitted a supplemental advice letter, SCE AL 5500-E-A, clarifying their request for the Commission’s review of three of CPA’s DR programs as SGIP qualified DR programs: Peak Management Pricing, Power Response Smart 2 Senate Bill 700 (2018, Wiener) Section (i).
3 Critical Peak Pricing is only open to participation by bundled customers. Though SCE’s Capacity Bidding Program was open to unbundled customers and remains on the list of qualified DR programs, residential bundled and unbundled customers were unable to participate since no aggregators managed residential participation and the program was sunset by SCE through SCE AL 5321-E/-E-A, approved by the Commission via disposition on March 3, 2025. In that same advice letter the Commission approved SCE’s Capacity Bidding Program-Elect (“CBP-E"). CBP-E is a newer program that is open to participation by unbundled residential and non-residential customers. CBP-E has not been added to the list of qualified DR programs per D.24-03-071.
Agenda Page 188
Home, and Power Response Commercial Leaders. On April 15, the CPUC determined the AL required further staff review and suspended the AL, leaving CPA’s customers with no pathway to obtain SGIP funding.
The ineligibility of CPA’s customers to enroll in a qualified DR program to receive SGIP funds has created uncertainty and frustration for some CPA residential customers. CPA is aware of multiple customers either contacting customer assistance asking about leaving CPA service or customers actually leaving CPA service solely due to the fact that residential CPA customers are currently ineligible to participate in a qualified DR program and therefore have no certain or clear pathway to accessing SGIP funds.
C. Further Inaction Compounds Harm to Low-Income Customers The lack of having a CPA SGIP-eligible program also inhibits enrollment in CPA’s Solar Battery Access Program, which seeks to leverage SGIP Residential Solar and Storage Equity (“RSSE”) funds to provide solar and storage systems to qualified CARE and FERA customers. In June, the Commission opened the RSSE budget, making $280 million of SGIP incentives available to eligible low-income residential customers.4 Funding from the RSSE budget is designed to help “low-income utility customers install battery storage and solar panel systems.”5 Funds from the RSSE budget are strictly time bound and must be encumbered by the end of June 2026. While CPA’s low-income residential customers could submit an application to reserve SGIP funds today, there is no guarantee that CPA customers can be enrolled in a qualified DR program unless the AL is approved by the Commission. The lack of a pathway for unbundled customers to participate in an SGIP program discourages CPA’s low-income residential customers from signing up for RSSE and inhibits them from accessing substantial clean energy and resiliency incentives.
III. Conclusion
CPA urges the Commission to review and approve SCE’s AL 5500-E-A. The Commission’s suspension of SCE’s AL 5500-E-A is resulting in CCA customers’ inability to access SGIP incentives and clean energy resources. Several members of the Legislature recently submitted a letter to the Commission confirming that this outcome was not the Legislature’s intent.6 CPA 4 The $280 million budget was funded by the Legislature and approved by the Governor in the 2023 Budget, Assembly Bill 209.
5 Commission Press Release: “CPUC Launches $280 Million Program to Expand Battery Storage and Solar Access for Low-Income Households,” released May 29, 2025. Found here:
https://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M567/K560/567560581.PDF 6 On May 30, 2025, 18 California State Legislators submitted a letter to Commission President Reynolds clarifying their intent for CCA customers to access SGIP incentives, including RSSE budget funds, and to request that “Energy
Agenda Page 189
urges the Commission to review and approve SCE’s AL 5500-E-A providing CCA customers with access to SGIP incentives as required by statute and intended by a coalition of legislators.
Thank you for your consideration of our concerns and your attention to this important matter.
Please feel free to reach out with any questions to CPA’s regulatory staff:
CC Song, Senior Director, Regulatory Affairs ([email protected]), and Clark McIsaac, Advisor, Regulatory Affairs ([email protected]).
Sincerely,
Hon. Deborah Klein Lopez
Chair, Board of Directors, Clean Power Alliance
Hon. Lindsey Horvath
Vice-Chair, Board of Directors, Clean Power Alliance
Hon. Cedric Hicks
Chair, Legislative and Regulatory Committee, Board of Directors, Clean Power Alliance Hon. John Erickson
Member, Legislative and Regulatory Committee, Board of Directors, Clean Power Alliance Ted Bardacke
Chief Executive Officer, Clean Power Alliance
Division staff efficiently and effectively review CCA demand response program advice letters no later than 30 days following their protest period.” Note: SCE’s AL 5500-E-A protest period ended April 9, 2025.
Agenda Page 190
CUSTOMERS
Summary of Financial Results
Definitions:
Accounts: Active Accounts represents customer accounts of active customers served by CPA per Calpine Invoice Participation Rate %: Participation Rate represents active accounts divided by eligible CPA accounts YTD Sales Volume: Year-to-date sales volume represents the amount of energy (in gigawatt hours) sold to retail customers Revenues: Retail energy sales and other (grant related) revenues less allowance for doubtful accounts Cost of energy: Includes all direct power costs incurred to serve CPA’s load Operating expenses: Includes general, administrative, consulting, payroll, and other costs required to fund operations Operating Income: Represents the difference between revenues and cost of energy and operating expenses Non-Operating Income: Interest income arising from deposits and investments net of borrowing costs and fees Investments: Liquid and high-quality securities with maturities of 91 days or more Cash and Cash Equivalents: Includes bank deposits and high quality and liquid securities with maturities of 90 days or less Year to date (YTD): Represents the fiscal period beginning July 1, 2024 YTD
April
2025
Financial Dashboard
Note: Numbers may not sum up due to rounding.
Active Accounts
1,039,199
Participation Rate
92.9%
YTD Sales Volume
9,069 GWh
Apr Volume
740 GWh
Agr/Oth
2% Com-Lg
22%
Com-Sm
31%
Res
45%
In April 2025 CPA’s net position increased by $25.5 million, $7.3 million or 22% less than the budgeted increase in net position of $32.8 million for the month. April 2025 results were negatively impacted by CPA’s interim rate reduction which was approved by the Board in February 2025 and took effect in March 2025, as well as cooler than normal weather which reduced electric consumption.
Year-to-date, CPA’s net position increased by $103.4 million, $51.3 million or 98% higher than the budget increase of $52.2 million. YTD revenues were $1.25 billion, $81.9 million or 6% less than budgeted revenues primarily due to CPA’s rate reduction taking effect on March 1st. YTD energy cost was $1.12 billion, $108.6 million or 9% less than budget primarily due to the non-utilization of contingencies and lower than budgeted renewable energy and capacity costs. Absent contingencies, energy costs were $36.5 million or 3.1% less than budgeted. Operating expenses were $40.9 million year to date, $14.8 million or 27% less than budgeted primarily due to lower than budgeted spending on customer programs, communications, and administrative expenses. Non-operating income, primarily made up of interest income, was $17.4 million, $9.8 million or 128% higher than budgeted.
As of April 30th, 2025, CPA had unrestricted cash, cash equivalents, and investments of $389.4 million, and $154.4 million available in its bank line of credit representing 178 Days Liquidity on Hand. CPA is financially sound and in compliance with its bank and other credit covenants.
Agenda Page 191
Jurisdiction Preferred Energy Option Active Accounts Participation % Lean % Clean % 100% Green % AGOURA HILLS 100% Green 8,000
ALHAMBRA 100% Green 34,319
ARCADIA Lean 22,668
BEVERLY HILLS 100% Green 18,635
CALABASAS 100% Green 9,560
CAMARILLO 100% Green 28,911
CARSON Clean 29,469
CLAREMONT 100% Green 12,725
CULVER CITY 100% Green 19,361
DOWNEY Clean 36,928
HAWAIIAN GARDENS Clean 3,644
HAWTHORNE 100% Green 28,541
HERMOSA BEACH 100% Green 9,930
LOS ANGELES COUNTY 100% Green 294,037
MALIBU 100% Green 6,313
MANHATTAN BEACH 100% Green 15,221
MONROVIA 100% Green 16,112
MOORPARK Clean 11,407
OJAI 100% Green 3,481
OXNARD 100% Green 55,848
PARAMOUNT Clean 15,809
REDONDO BEACH 100% Green 33,379
ROLLING HILLS ESTATES 100% Green 3,514
SANTA MONICA 100% Green 55,671
SANTA PAULA 100% Green 9,372
SIERRA MADRE 100% Green 4,924
SIMI VALLEY Lean 43,499
SOUTH PASADENA 100% Green 11,595
TEMPLE CITY Lean 12,713
THOUSAND OAKS 100% Green 44,490
VENTURA 100% Green 44,875
VENTURA COUNTY 100% Green 32,893
WEST HOLLYWOOD 100% Green 26,709
WESTLAKE VILLAGE Lean 3,714
WHITTIER Clean 31,734
TOTAL
89.3% 3.7% 0.4% 95.9%
95.3% 2.1% 0.1% 97.8%
95.1% 99.8% 0.1% 0.2%
97.4% 2.3% 0.1% 97.6%
93.1% 3.4% 0.3% 96.3%
89.8% 2.2% 0.1% 97.7%
95.6% 1.6% 96.0% 2.4%
91.1% 3.4% 0.3% 96.3%
95.0% 4.3% 1.0% 94.7%
95.0% 1.7% 97.2% 1.1%
95.4% 1.5% 96.4% 2.1%
97.1% 0.9% 0.0% 99.0%
92.5% 2.9% 0.6% 96.5%
94.4% 2.4% 30.5% 67.2%
94.3% 3.2% 0.4% 96.4%
95.0% 3.3% 0.4% 96.3%
90.5% 5.0% 0.5% 94.5%
85.7% 3.3% 96.2% 0.6%
88.6% 6.0% 1.2% 92.8%
92.6% 4.0% 0.5% 95.5%
96.6% 0.3% 94.4% 5.3%
95.9% 2.6% 0.1% 97.3%
91.7% 8.1% 1.5% 90.4%
94.9% 3.5% 0.6% 96.0%
90.1% 2.5% 0.3% 97.2%
91.8% 5.8% 1.5% 92.7%
89.3% 99.7% 0.1% 0.2%
94.4% 4.0% 0.6% 95.4%
95.6% 99.8% 0.1% 0.2%
83.5% 8.1% 1.4% 90.5%
89.2% 4.9% 1.1% 94.0%
84.6% 7.0% 1.0% 92.0%
97.1% 2.6% 0.3% 97.1%
88.0% 99.5% 0.1% 0.5%
93.9% 2.0% 97.2% 0.8%
92.6%
CUSTOMER STATUS REPORT
PARTICIPATION BY CITY AND COUNTY
July 3, 2025
ACTIVE ACCOUNTS BY ENERGY PRODUCT
Energy Option Active Accounts Percentage
100% Green Power
Clean Power
Lean Power
TOTAL 100.0%
10.8%
20.9%
68.3%
1,040,001
112,609
217,138
710,254
1,040,001 92.9%
Agenda Page 192
Project Purpose Month Notes
Luna
Letter agreement to memorialize approval of an augmentation outage in the summer months, and compensation from Luna to CPA in acknowledgment of such summer outage approval.
June 2025
Sunzia Letter agreement to establish process to bifurcate North and South projects June 2025 Sunzia
Amendment to allow Sunzia the option to operate each turbine in the South Wind project area at a nameplate capacity of 3.8MW vs the originally contemplated 3.6MW
May 2025
Sunzia
Letter Agreement extending the negotiating period to address Slice of Day language in existing contract
May 2025
Cape Station 30
MW and 18 MW
Letter Agreement to the Power Purchase Agreements to update insurance requirements. The Letter Agreement applies to both the 30 MW and incremental 18 MW Cape Station agreements.
April
2025
Rexford
Amendment to the Power Purchase Agreement to update the Ultimate Parent definition after a Change in Control
February 2025
Drifter
Amendment to Energy Storage Agreement to extend the termination deadline while parties identify mutually beneficial solutions
January 2025
Desert Sands II
Amendment to a Letter Agreement to the Energy Storage Agreement to extend the termination deadline while parties identify mutually beneficial solutions December 2024
Desert Quartzite
Letter Agreement to Power Purchase Agreement to document grid charging cessation procedures November 2024
Drifter
Amendment to Energy Storage Agreement to extend the termination deadline while parties identify mutually beneficial solutions
October 2024
Desert Sands I
Amendment to Power Purchase Agreement to facilitate the transfer of the site to a backup facility contemplated in the contract, Key Energy Storage, and allow for a delay in COD in return for a price decrease September 2024
Wilmington 2
Amendment to Power Purchase Agreement to allow for additional payments of liquidated damages to extend the COD
September 2024
Dominguez
Amendment to Power Purchase Agreement to allow for additional payments of liquidated damages to extend the COD
September 2024
Desert Sands II
Amendment to a Letter Agreement to the Energy Storage Agreement to extend the termination deadline while parties identify mutually beneficial solutions August 2024
Workman Mill
Termination of the Power Purchase Agreement for failure of Seller to meet contractual deadlines
July 2024
Dinuba Biomass
Termination of the Power Purchase Agreement for failure of Seller to meet contractual deadlines
July 2024
Drifter
Amendment to Energy Storage Agreement to extend the termination deadline while parties identify mutually beneficial solutions
July 2024
Previous 12 Months
Long-Term Energy Contracts Administrative Amendments, Letter Agreements and Terminations Executed Under Chief Executive Officer's Authority
Agenda Page 193
Vendor Purpose Month NTE Amount Status Notes
Smartsheet, Inc. Project management platform Jul-25 $2,436 Active Hootsuite, Inc. Social media boosting tool Jun-25 $18,799 Active Air Fresh Marketing LLC Street teams support services Jun-25 $20,000 Active SAESHE, Inc. Street teams support services Jun-25 $20,000 Active Lattice HR management platform subscription Jun-25 $35,067 Active Getty Images Subscription for image assets Jun-25 $8,620 Active EGIA Incentive management services
renewal term May-25 $92,510 Active
Spirit Media Videography services for CPA teaser
video May-25 $97,375 Active
Trinity Consultants Third-party verification services for 2024 EPE emissions data report May-25 $24,000 Active
BRB Law Legal services, regulatory May-25 $50,000 Active Raimi & Associates
End date extension only for Inglewood
Oil Field energy storage feasibility
study
May-25 $0 Active End date extension only
EPRI Research Participation Agreement Apr-25 $54,000 Active USGBC California
Workforce development grant for
wildfire recovery resources Apr-25 $50,000 Active
IFUS ICE Futures Platform access Apr-25 $0 Active
Redhill Group Customer Researh Services Apr-25 $34,589 Active LinkedIn Recruiting Platform Subscription Feb-25 $10,250 Active Raimi & Associates
Inglewood Oil Field energy storage
feasibility study Feb-25 $118,713 Active
Abbot, Stringham & Lynch Green-e Energy Program reporting Feb-25 $24,000 Active Wicked Bionic
Creative services for Customer
Programs Jan-25 $225,000 Active
Omni Government Relations Renewal to lobbying services
agreement
Jan-25 $102,492 Active
Pinnacle Advocacy Renewal to lobbying services
agreement
Jan-25 $76,652 Active
Wrike Project management software Jan-25 $20,280 Active Verve Cloud Internet service Jan-25 $20,988 Active
TRC Amendment to PSA for reach code
technical consulting
Dec-24 $36,928 Active
Wellable Employee wellness platform Dec-24 $13,075 Active Crown Castle Fiber LLC
Office dedicated internet access
service
Nov-24 $18,600 Active
Alter Agents CPA Brand Tracker Nov-24 $44,000 Active
New Block Digital Agency Website QA services Nov-24 $25,000 Active Language Line Translation services Nov-24 $42,000 Active Green Translations Translation services Nov-24 $42,000 Active Intelligence Press Natural gas data subscription Nov-24 $7,400 Active Cindy Levine Group Amendment to PSA for management
coaching services Nov-24 $12,500 Active
Downey Brand LLP Legal Services (CPUC mediation) Nov-24 $55,000 Active Ross Associates Management coaching services Oct-24 $16,000 Active Perkins Coie Amendment to Legal Services
Agreement for RFO support Oct-24 $70,000 Active
Actium LLP Legal services for general liability Oct-24 $55,000 Active Windstream Services, LLC Office telephone service Sep-24 $12,924 Active Thorn Run Partners LLC Federal lobbying services Sep-24 $125,000 Active Sigman Computing Analytics platform Sep-24 $30,800 Active JustFOIA PRA request management software Sep-24 $9,835 Active Non-Energy Contracts Executed Under Chief Executive Officer Authority Rolling 12 months. Open contracts shown in bold.
Agenda Page 194
Salesforce Additional license for CRM
subscritpion Sep-24 $3,733 Active
Helpmates HR temporary staffing services Aug-24 $24,000 Active Workable HR recruitiung paltform subscrption Aug-24 $14,028 Active DataCamp Training subscription for Data &
Systems team Aug-24 $1,200 Active
Salesforce Stakeholder relationship management
application subscription Aug-24 $15,300 Active Renewal
Abbott, Stringham & Lynch Data security complaince services Jul-24 $18,500 Active LinkedIn LinkedIn Learning subscription Jul-24 $16,150 Active Hall Energy Law PC Energy procurement counsel Jul-24 $125,000 Active Renewal Burke, Williams, Sorenson, LLP
Legal Services Agreement (Brown Act,
public entity governance issues, and
other legal services)
Jul-24 $100,000 Active Renewal
Elite Edge Financial reporting services Jul-24 $93,600 Active Renewal
Agenda Page 195