1 Item 12: Approve CleanPowerSF’s
Participation in California
Community Power’s
Goal Line Energy Storage Project
April 12, 2022
Summary
In June 2021 the California Public Utilities Commission ordered CleanPowerSF and other power providers to procure Long-duration Energy Storage (LDS) resources.
CleanPowerSF participated in a Request for Offers for Long-duration Energy Storage as a member of California Community Power (CC Power). CleanPowerSF’s participation in the Tumbleweed Project, its first Long-duration Energy Storage Project, was approved by the Commission on Feb. 22nd and the Board of Supervisors on March 22nd.
On February 25th, the CC Power Board approved its second Long-duration Energy Storage Project, the Goal Line Project.
CC Power member agencies, including CleanPowerSF, are now seeking approval from their governing bodies to participate in the Goal Line Project. 2 Established in February 2021 to leverage the
combined buying power of Community
Choice Aggregators (CCAs) for energy supply,
programs and services.
CleanPowerSF became a member in April
2021.
Commission approved in Resolution No.
21-0023
Board approved in Ordinance No. 25-21
CC Power conducts its business in open
meetings – for more info visit:
https://cacommunitypower.org/meetings/
3 Background:
California Community Power
or “CC Power”
4 California
Community Power
Agency
Membership
CC Power Long-duration
Storage Project #2:
Goal Line Project
Developer: Onward Energy
Product: 50 MW/400 MWh 8-hour
discharge battery
Location: City of Escondido, San
Diego County
Technology: Lithium-ion
Labor: Project Labor Agreement or
similar agreement required
Wages: Prevailing wages required
Commercial Operation Date: 6/1/25
Proposed contract term: 15 years
5 Compliance with CPUC’s
Long-duration Storage
Order
• On June 24, 2021, CPUC issued Decision 21-06-035 ordering CleanPowerSF to procure 15.5 MW of new Long-duration Energy Storage Net Qualifying Capacity.
• CleanPowerSF will be able to meet is CPUC procurement requirement by participating in the Tumbleweed and Goal Line Projects. 6 Project
CleanPowerSF Share
Nameplate Capacity
(MW)
Net Qualifying Capacity
(Estimated, MW)
Tumbleweed 11.1 8.7
Goal Line 10.7 8.4
Total 21.8 17.1
7 Project Agreement
Structure
(3 documents to be authorized
for GM execution)
#3 executed by
each CC Power
Member
Agency & LDS
Project
#1 & #2 executed
by CC Power &
each
Participating
Member Agency
2 1
3 Next Steps
Participating CC Power members have 90 days
from March 1st (May 30th) to receive approval and
execute their required agreements.
If approved by Commission, staff will seek Board
of Supervisors and Mayoral approval in April and
early May.
8 9
Questions?
DEPARTMENT Power Enterprise
AGENDA NO.
12 MEETING DATE
April 12, 2022
APPROVAL:
COMMISSION
SECRETARY
Donna Hood
AGENDA ITEM
Public Utilities Commission
City and County of San Francisco
Approve and A uthorize CleanPowerSF’s Participation in California Community Power’s Long- Duration Storage Project with Goal Line Battery Energy Storage System 1, LLC: Regular Calendar
Project Manager: Michael Hyams, Deputy AGM, Power - CleanPowerSF
Approve and Authorize CleanPowerSF’s Participation in California Community Power’s Long-duration Energy Storage Project with Goal Line Battery Energy Storage System 1, LLC
Summary of
Proposed
Commission Action:
Approve the Project Participation and Share Agreement , the Buyer Liability Pass-Through Agreement, and the Coordinated Operations Agreement, so that CleanPowerSF may participate in California Community Power’s long- duration energy storage project with Goal Line Battery Energy Storage System 1, LLC ; and authorize the General Manager to execute the agreements on behalf of the CleanPowerSF program with total contract costs not-to-exceed $45 million for a term of twenty (20) years; and authorize the General Manager to seek approval from the Board of Supervisors to execute the agreements.
Background: In 2016, CleanPowerSF initiated service to eligible customers within the City in multiple phases until citywide enrollment of all eligible customer accounts was completed in June 2020. Today, CleanPowerSF is successfully serving more than 380,000 customer accounts with annual electricity sales of about 3,000 gigawatt-hours and an annual peak demand of 550 megawatts.
Thoughout the operation of the CleanPowerSF program, the SFPUC has successfully acquired an electricity supply under short and long-term contracts that has enabled CleanPowerSF to deliver cleaner and more renewable electricity to its customers at rates that are affordable and competitive.
California Public Utilities Commission (CPUC) Mandate to Procure Long- Duration Energy Storage (LDS) Capacity
On June 24, 2021, the CPUC adopted D ecision (D.) 21- 06-035 directing CleanPowerSF and other retail sellers of electricity under its jurisdiction to Agreement: Approve Goal Line Long-Duration Energy Storage Agreements Commission Meeting Date: April 12, 2022
1 Net Qualifying Capacity or NQC refers to the amount of power an electric resource can provide to the grid when it is most constrained and that can be counted towards meeting the CPUC’s Resource Adequacy requirements. collectively procure 11,500 MW of new electricity resources between 2023 to 2026 to meet grid reliability needs, including 1,000 MW of new LDS resources.
LDS is a technology that is capable of storing energy and then discharging it at the plant’s rated capacity for at least eight hours. LDS technology will allow CleanPowerSF to store energy from the grid when it is abundant (e.g., during the middle of the day when solar is available) and discharge it when demand for electricity is high. L DS is viewed as a critical technology to ensure the reliability of the electric grid as it transitions away from fossil fuels.
Under D.21-06-035, the CPUC required CleanPowerSF to procure 15.5 MW of Net Qualifying Capacity of new LDS resources to be opera tional by the middle of 2026.
1 Failure to procure the resources ordered by the CPUC could result in significant financial penalties to CleanPowerSF. In addition, the CPUC could order Pacific Gas and Electric Company (PG&E) to procure “backstop” LDS resources with the cost of such procurement assigned to CleanPowerSF directly or recovered through a non-bypassable charge on its ratepayers’ monthly energy bills.
Formation of California Community Power (CC Power) and the Request for Offers for LDS Resources
In June 2020, CleanPowerSF , along with 10 other CCAs issued a request for information (RFI) from LDS technology providers and project developers. The information collected through the RFI was used to develop a request for offers (RFO). This RFO was issued on October 15, 2020. Fifty-one entities submitted offers representing over 9,000 MW of new LDS capacity in California and surrounding states.
On February 1, 2021, a group of CCAs formed CC Power, a new joint powers agency (JPA). The Commission and the Board of Supervisors then authorized CleanPowerSF’s membership in CC Power. CleanPowerSF became a member of CC Power on April 21, 2021.
With the formation of the JPA, CC Power assumed management of the LDS RFO. Projects were evaluated based on the projects’ economic value, development status, project viability , ability to meet state regulatory requirements, technology viability, project team experience, compliance with workforce policy, and environmental impact.
On February 22, 2022, the SFPUC C ommission a pproved CleanPowerSF’s participation in the first of these projects (the Tumbleweed LDS Project) and authorized the General Manager to seek approval from the Board of Supervisors (Resolution No. 22- 0041). On March 22, 2022 , the Board of Supervisors approved Res olution No. 106- 22, authorizing CleanPowerSF’s participation in the Tumbleweed LDS Project through CC Power.
Agreement: Approve Goal Line Long-Duration Energy Storage Agreements Commission Meeting Date: April 12, 2022
2 CC Power Resolution No. 21-10-02, available at: https://cacommunitypower.org/wp-content/uploads/2021/10/CC- Power_BoD-Mtg_100821_FINAL.pdf (accessed on January 26, 2022).
CC Power Approval of the Goal Line LDS Project Agreement On February 25, 2022, the CC Power Board approved the second long-duration energy storage project, this one with Goal Line Battery Energy Storage System 1, LLC, (Goal Line LDS Project) to be developed by the firm Onward, and authorized the CC Power General M anager to execute the Goal Line LDS Project Agreements on behalf of CC Power.2 Subsequently, on March 1, 2022, the CC Power General Manager executed the Energy Storage Services Agreement (ESSA) directly with the LDS project company, Goal Line Battery Energy Storage System 1, LLC. Th e ESSA covers standard electric industry terms, including project requirements and milestones, project capacity, price, term, payment obligations, and other key terms. Some of the terms of the ESSA are confidential and proprietary, so a redacted version of the ESSA is attached to this staff report.
Separately, participating CC Power members must follow their own individual approval processes to execute the Project Participation and Share Agreement (PPSA) and Buyer Liability Pass -Through Agreement (BLPTA) , described below. The project agreements are structured to be dependent upon each other.
Thus, even though the CC Power Board has approved the project and execution of the ESSA , the effectiveness of that agreement depends on approval and execution of the PPSA and BLPTA by individual participating members. The ESSA gives CC Power 90 days to secure approval from each participating CCAs’ governing Board (May 30, 2022)
.
Overview of the Project
Project Name Goal Line Battery Energy Storage
System 1, LLC
Technology Li-Ion Storage
Storage Capacity 50 MW / 400 megawatt-hour (MWh)
Commercial Operation Date 6/1/2025
Developer Onward
Location Escondido, San Diego County, CA
The Goal Line LDS Project is a 50 MW / 400 MWh lithium-ion battery storage facility located near Escondido, CA in northern San Diego County.
CleanPowerSF’s share of this project is approximately 10.75 MW / 86 MWh.
The Commercial Operation Date is June 1, 2025.
Under the contract, CC Power will pay for the use of the storage project at a fixed-price rate per kW-month, with no escalation, for the full term of the contract. CC Power is entitled to all electricity products from the facility, including the energy dispatched and Resource Adequacy capacity. Project participants will pay CC Power for their share of the project capacity and in turn receive their share of the associated electricity products and project benefits.
Agreement: Approve Goal Line Long-Duration Energy Storage Agreements Commission Meeting Date: April 12, 2022
3 Net Qualifying Capacity or NQC refers to the amount of power an electric resourcecan provide to the grid when it is most constrained and that can be counted towards meeting the CPUC’s Resource Adequacy requirements. The NQC for long - duration battery energy storage is currently expected to be 78.2% of the project’s nameplate capacity. This is subject to change in the future by regulatory order.
Workforce Requirements
The Goal Line LDS Project has committed that the construction of the project will comply with California prevailing wage requirements and be conducted using a project labor agreement, community workforce agreement, work site agreement, collective bargaining agreement, or other similar agreement, providing for terms and conditions of employment with applicable labor organizations.
Participating CCAs and Project Capacity Allocations
Six CC Power member CCAs are participating in this project. The participating CCAs, and their applicable shares are identified in the table below.
CCA
Goal Line
Allocation
(MW)
Entitlement Share
in PPSA (%)
Goal Line
Allocation
Est. NQC3
CleanPowerSF 10.75 21.50% 8.41
RCEA 2 4.00% 1.56
SJCE 12.13 24.26% 9.49
SVCE 14.19 28.38% 11.10
SCPA 8.68 17.36% 6.79
VCE 2.25 4.5% 1.76
Total 50.0 100% 39.1
Combined, the Tumbleweed LDS Project and the Goal Line LDS Project will provide CleanPowerSF with approximately 21.8 MW of nameplate LDS capacity or 17.1 MW of NQC, 1.6 MW more than the 15.5 MW of LDS NQC CleanPowerSF is required to procure by the CPUC. Staff believe that the 10% additional NQC gives CleanPowerSF an appropriate buffer to protect against future regulatory changes that might reduce the NQC value of these projects and put CleanPowerSF’s compliance with its CPUC obligations at risk.
Description of
Agreement:
For CleanPowerSF to participate in the Goal Line LDS Project, the SFPUC will need to execute the following agreements.
A. Project Participation Share Agreement (PPSA): This agreement will be executed by CC Power and each of the participating CCAs. This agreement specifies the products (e.g., energy dispatched and Resource Adequacy capacity) and benefits from CC Power to each of the participating CCAs. It also details payment timelines from each CCA to CC Power and covers terms and procedures if a CCA does not make payments when due. Under this agreement, each CCA commits Agreement: Approve Goal Line Long-Duration Energy Storage Agreements Commission Meeting Date: April 12, 2022
to a 25% “step-up” obligation. If one of the participating CCAs defaults and is removed from the agreement, each CCA commits to take additional capacity up to 25% of its initial share. Each CCA also commits to pre-pay three months of expected project payments. This provides a cushion to CC Power to allow it to make payments to the project developer on a timely basis. The PPSA is attached to this agenda item.
B. Buyer Liability Pass Through Agreement (BLPTA): This agreement will be executed by CleanPowerSF, CC Power and Goal Line Battery Energy Storage System 1, LLC. The form of this agreement is an appendix to the ESSA. This agreement is a guaranty by
CleanPowerSF of its share of CC Power’s payment obligations under the ESSA. The BLPTA is attached to this agenda item.
C. Coordinated Operations Agreement (COA): This agreement will be executed by CC Power and each of the participating CCAs. This agreement details how the CCAs and CC Power will work together to operate the project including hiring a scheduling coordinator and making decisions on charging and discharging the project. This contract will be finalized and executed at a later date, prior to the start of project operations. A draft of the COA is attached to this agenda item.
Budget & Costs: CleanPowerSF’s share of the Goal Line LDS Project costs will not exceed $60 million over a 20- year contract term. The annual project costs will be funded from CleanPowerSF revenues and included in CleanPowerSF’s annual budget.
Result of Inaction: CleanPowerSF may not be able to procure the LDS capacity it needs to comply with CPUC Decision 21 -06-035. If CleanPowerSF is unable to procure the LDS capacity required by the CPUC, it may be subject to financial penalties for non- compliance. In addition, t he CPUC may order PG&E to procure “backstop” LDS resources with the cost of such procurement assigned to CleanPowerSF directly or recovered through a non- bypassable charge on its ratepayers’ monthly energy bills.
Schedule: Joint CCA Request for Offers for Long Duration Energy Storage Capacity • Advertised: October 15, 2020
• Proposals due: December 1, 2020
• CC Power notice of intent to approve: October 8, 2021 • CC Power approval: January 19, 2022
• Participating member CCA approvals: February-May 2022 • Project Commercial Operation: June 1, 2026
Agreement: Approve Goal Line Long-Duration Energy Storage Agreements Commission Meeting Date: April 12, 2022
Environmental
Review:
The Goal Line LDS Project will undergo environmental review in San Diego County. The ESSA and other Agreements allow CC Power, CleanPowerSF, and the other participating CCAs to terminate their participation in the project if the developer fails to obtain all applicable discretionary permits and complete California Enivornmenta l Quality Act ( CEQA)
review, which may include
consideration of any alternatives and requirements for implementation of a mitigation monitoring and reporting program, and begin construction of the Goal Line LDS Project by the date specified in the ESSA. The developer is required by the agreement to comply with all applicable laws during the term of the agreement, which includes CEQA requirements for implementation of mitigation measures, if any.
Recommendation: SFPUC staff recommends that the Commission adopt the attached resolution.
Attachments: 1. California Community Power-Goal Line Energy Storage PPSA
2. California Community Power-Goal Line Energy Storage BLPTA
3. California Community Power-Goal Line Energy Storage ESSA
4. California Community Power-Goal Line Energy Storage Coordinated Operations Agreement
PUBLIC UTILITIES COMMISSION
City and County of San Francisco
RESOLUTION NO. :
WHEREAS, The San Francisco Board of Supervisors (“Board”) established a Community Choice Aggregation ( “CCA”) program in 2004 (Ordinance 86- 04) and has implemented the program, called CleanPowerSF, through the work of the San Francisco Public Utilities Commission (“SFPUC” or “Commission”) in consultation with the San Francisco Local Agency Formation Commission (Ordinances 146-07, 147-07, and 232-09); and WHEREAS, The SFPUC has adopted program goals for CleanPowerSF that guide CleanPowerSF’s planning and operations, including leading with affordable and reliable service, providing cleaner electricity alternatives, and investing in local renewable projects and jobs while providing for long-term rate and financial stability; and WHEREAS, CleanPowerSF and other interested CCAs formed a new joint powers authority (“California Community Power Agency” or “CC Power”) to le verage their combined buying power to achieve economies of scale, lower costs, and more favorable terms and conditions for products and services; and
WHEREAS, The Commission by Resolution No. 21-0023 and the Board by Ordinance No. 25-21 authorized CleanPowerSF to become a member of CC Power , and in April 2021 the CC Power Board approved CleanPowerSF’s membership; and
WHEREAS, By Resolution No. 20-0182, the Commission adopted CleanPowerSF’s 2020 Integrated Resources Plan, which called for CleanPowerSF to procure long-duration energy storage (“LDS”) resources. LDS is a technology that can store and discharge energy for at least eight hours; and
WHEREAS, On June 24, 2021, t he California Public Utilities Commission (“CPUC”) ordered CleanPowerSF and other retail power providers under its authority to procure 11,500 megawatts of new resources, including 1,000 megawatts of LDS. CleanPowerSF’s share of the LDS requirement is 15.5 megawatts; and
WHEREAS, CleanPowerSF’s failure to comply with the CPUC order could result in significant financial penalties; and
WHEREAS, CleanPowerSF, as a member of CC Power, has participated in a request for offers for LDS resources; and
WHEREAS, On February 25, 2022, the CC Power Board approved entering into an Energy Storage Services Agreement with Goal Line Battery Energy Storage System 1, LLC (“Goal Line ESSA”) under which CC Power may purchase 50 megawatts of LDS with 400- megawatt hour eight-hour discharge capacity and authorized the CC Power General M anager to execute the project agreements on behalf of CC Power and the participating CCAs; and
WHEREAS, CleanPowerSF’s share of the long-duration energy storage project with Goal Line Battery Energy Storage System 1, LLC , (Goal Line LDS Project) would be 21.5 percent of the project capacity, which in combination with CleanPowerSF’s participation in the Tumbleweed LDS Project, approved in Resolution No. 22- 0041, would satisfy all of CleanPowerSF’s LDS procurement obligation ordered by the CPUC; and
WHEREAS, To participate in the Goal L ine LDS Project, CleanPowerSF must enter into three separate agreements:
• Project Participation Share Agreement (“ Goal Line PPSA”) between CC Power, CleanPowerSF and the other CCAs that are participants i n the Goal Line LDS Project. It defines the rights, duties, and obligations of CleanPowerSF and the other project participants;
• Buyer Liability Pass Through Agreement (“ Goal Line BLPTA”) between CleanPowerSF, CC Power, and the Goal Line LDS Project . Under the BLPTA, CleanPowerSF guarantees the prompt payment of its share of CC Power’s obligations; and
• Coordinated Operations Agreement (“Goal Line Operations Agreement”) between CleanPowerSF, CC Power, and the other participating CCAs. It details how the CCAs and CC Power will work together to operate the project including hiring a scheduling coordinator and making decisions on charging and discharging the project; and
WHEREAS, The Goal Line LDS project will undergo environmental review in San Diego County and the ESSA and other Agreements allow CC Power, CleanPowerSF, and the other participating CCAs to terminate their participation in the project if the developer fails to obtain all applicable discretionary permits and complete California Environmental Quality Act ( CEQA) review, which may include consideration of any alternatives and requirements for implementation of a mitigation monitoring and reporting program, and begin construction of the Goal Line LDS Project by the date specified in the ESSA; and
WHEREAS, The developer is required by the agreement to comply with all applicable laws during the term of the agreement, which includes CEQA requirements for implementation of mitigation measures, if any; now, therefore, be it
RESOLVED, That the Commission hereby approves and authorizes the General Manager to execute and seek Board of Supervisors approval for the Goal Line BLPTA, the Goal Line PPSA, and the Goal Line Operations Agreement for a not-to-exceed amount of $60,000,000 over a twenty (20) year term on behalf of CleanPowerSF; and be it
FURTHER RESOLVED, That the Commission authorizes the General Manager to make amendments to the agreements that the General Manager and the City Attorney agree are needed to fulfill the purposes of the Agreement and would not materially increase the obligations or liabilities or materially reduce the benefits to the City.
I hereby certify that the foregoing resolution was adopted by the Public Utilities Commission at its meeting of April 12, 2022.
Secretary, Public Utilities Commission