Item #11
Approve CleanPowerSF General and
Administrative Expenses with the
California Community Power Agency
June 27, 2023
2 Today’s Action
• Approve C leanPowerSF payment of its share of the general and administrative costs of the California Community Power Agency • Staff proposing
• An annual not-to-exceed amount of $100,000 in Fiscal Year 2023-24 • Not- to-exceed amount to increase at a rate of 5% per year • Approve agreement expenses for a period of 25 years
• Authorize t he General Manager to seek Board of Supervisors Approval
3 California Community Power
or “CC Power”
• Established in February 2021 to leverage the
c
ombined 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
• Currently 9 member CCAs
• CC Power conducts its business in open meetings –
f
or more info visit:
https://cacommunitypower.org/meetings/
4 CC Power Membership
Benefits to CleanPowerSF
• With Commission and Board approval,
par
ticipating in four long-term
agreements with new projects:
• Two Long-duration Energy Storage
pr
ojects for ≈ 20 megawatts share; and
• Two Geothermal (Firm Clean Resource)
pr
ojects for ≈ 23 megawatts share
• Supports compliance with CPUC order
t
o procure from these types of energy
resources (Decision 21-06-035).
5 CC Power’s Strategic
Business Plan
Hire a new full-t ime General Manager
• Successfully implement committed projects
and
build organization capacity for further
collaboration among membership
• E.g., fund financial reserves and “Build it Right”
w
orkshop
• Add to portfolio of projects, programs and
s
ervices where and when beneficial to
members
• E.g., continue to assist members in meeting
c
urrent and future regulatory requirements
6 CC Power General & Administrative Budget
Staff proposal:
• Set not-t o -exceed $100,000
annual General and
Administrative amount for
CleanPowerSF.
• Approve amount for 25 years,
t
o align with duration of
project commitments, with a
5% per year cost escalator.
Item General &
Admin. ($)*
Staffing, Services &
Operations
$585,044
Operating Reserves** $175,000
Total $759,044
FY 2023-24 Budget
*Total General & Administrative budget shared equally
by 9 member agencies
**Goal to fund about 1 year’s worth of Operating
Reserves over a 3-year period.
Thank you!
DEPARTMENT
Power Enterprise
AGENDA NO.
11 MEETING DATE
June 27, 2023
Last updated: 02.01.2023
AGENDA ITEM
Public Utilities Commission
City and County of San Francisco
Calendar: Regular Calendar
Contract/Project Manager: Michael Hyams
Approve CleanPowerSF’s payment of on-going general and administrative costs as a participant in the California Community Power Agency.
Summary of Proposed
Commission Action:
Approve CleanPowerSF’s payment of its share of on-going general and administrative costs for its participation in the California Community Power Agency, for an amount not-to-exceed $100,000 per year, adjusted by 5% per year, for a period of 25 years, and authorizing the General Manager to seek Board of Supervisors approval.
Background: California Public Utilities Code Section 366.2 allows public agencies to aggregate the electrical load of interested electricity consumers within their jurisdictional boundaries. Pursuant to this law, the City and County of San Francisco has established a community choice aggregation program known as CleanPowerSF to provide electric power to the residents and businesses located within its jurisdiction. The San Francisco Board of Supervisors (Board) established the City’s community choice aggregation program in May 2004 (Ordinance 86- 04). CleanPowerSF began enrolling customers in May 2016 and completed citywide enrollment in 2020. Today, CleanPowerSF provides competitively priced, cleaner electricity supply services to more than 380,000 customer accounts.
A group of community choice aggregators formed a new joint powers authority in early 2021, California Community Power Agency (CC Power).
As stated in the CC Power Joint Powers Agreement, CC Power’s primary objective is to provide for joint procurement of electrical power and storage and other energy projects for its m embers. The members intend that CC Power shall better position the m embers to administer community choice energy programs and achieve their local agency goals, including but not limited to meeti
ng or exceeding California’s greenhouse gas emission
reduction targets through procurement of renewable resources.
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 (Resolution 21-04-09).
Board of Supervisors Ordinance No. 25- 21 authorized CleanPowerSF ’s payment of its share of CC Power’s start -up and on -going administrative Agenda Title: Approve CleanPowerSF’s payment of on-going general and administrative costs as a participant in the California Community Power Agency
Commission Meeting Date: June 27, 2023
1 For more information on CleanPowerSF’s participation in CC Power competitive solicitations see CleanPowerSF’s Quarterly Reports dated March 25, 2022 at: https://sfpuc.sharefile.com/share/view/s765559c18a2e42029cd05d5148aa822b and dated July 1, 2022 at: https://sfpuc.sharefile.com/share/view/sf04da3f0b75141329b9c8640b5a440e8 [accessed on June 1, 2023].
costs in an amount not to exceed $50,000 per calendar year for 2021, 2022 and 2023. The Board of Supervisors also authorized the PUC to amend and seek reauthorization of the not-to-exceed amount by resolution.
CC Power is currently comprised of nine community choice a ggregators.
Specifically, the members are Central Coast Community Energy, CleanPowerSF, East Bay Community Energy, Peninsula Clean Energy, Redwood Coast Energy Authority, San Jose Clean Energy, Silicon Valley Clean Energy, Sonoma Clean Power, and Valley Clean Energy. CC Power members represent over 3 million customers across 1 48 municipalities spanning from Humboldt County to Santa Barbara County.
By joining the CC Power JPA, CleanPowerSF h as the opportunity but not the obligation to participate in the procurement of energy or services that might not otherwise be available or cost-effective to CleanPowerSF as an individual community choice aggregator.
To date, with the approval of the Commission and Board, CleanPowerSF is participating in the purchase of energy and capacity from four energy projects procured by CC Power through competitive solicitations:
• Ormat Portfolio Geothermal: CleanPowerSF will purchase a 17.38 megawatt share of up to 125 megawatts of geothermal energy generating capacity to be developed and sold to CC Power under a 20-year power purchase agreement, through 2045;
• Fish Lake Geothermal : CleanPowerSF will purchase a 1.89 megawatt share of 13 megawatts of geothermal energy generating capacity to be developed and sold to CC Power under a 20- year power purchase agreement, through 2044;
• Goal Line Long Duration Storage : CleanPowerSF will purchase a
10.75 megawatt share of 50 megawatts of 8-hour energy storage capacity to be developed and sold to CC Power under a 15- year power purchase agreement, through 2040; and
• Tumbleweed Long Duration Storage: CleanPowerSF will purchase a 12.04 megawatt share of 75 megawatts of 8-hour energy storage capacity to be developed and sold to CC Power under a 15- year power purchase agreement, through 2041.1
By participating in these four projects, CleanPowerSF will be able to comply with the California Public Utilities Commission’s order to procure long-duration energy storage and firm clean energy resources ( Decision 21-06-035). It will also diversify its procurement of these long lead -time Agenda Title: Approve CleanPowerSF’s payment of on-going general and administrative costs as a participant in the California Community Power Agency
Commission Meeting Date: June 27, 2023
2 For more information see CC Power’s Board meeting information at: https://cacommunitypower.org/meetings/ [accessed on June 1, 2023]
projects across a larger portfolio, reducing the risk to CleanPowerSF ratepayers.
In December 2022, CC Power adopted a Strategic Business Plan (Attachment 1), focused on four business priorities:
1. Build organizational capacity to provide value to members including hiring a full -time general manager and clarifying or adding operating policies and procedures;
2. Successfully implement agreements for long duration storage and firm clean resources [geothermal];
3. Pursue opportunities enabled by the Inflation Reduction Act, including innovative technologies; and
4. Achieve savings though joint procurement of progr ams and services.
In February 2023, CC Power hired a full -time general manager to implement the Strategic Business Plan . The new general manager will be focused on developing the organizational capacity to successfully implement the existing power purchase agreements and pursue new opportunities that would benefit from multi-agency collaboration. Specific near-term measures include hiring a second full -time staff member, evaluating agency procurement policies and conducting a “Getting it Built Right” workshop,
improving agency accounting practices to support
multiple multi-member projects and programs, building agency financial reserves, and exploring the establishment of a credit rating.
In April, CC Power adopted a fiscal year 2023- 24 budget for on-going general administrative activities totaling $759,044. 2 Of this amount, $584,044 was identified for staffing, service contracts and related operating expenses and $175,000 was identified for contributions to financial reserves. CC Power is proposing to build its financial reserves over a 4- year period to approximately $700,000. T he CC Power joint powers agreement requires all member s to share equally in general and administrative costs, resulting in a share for CleanPowerSF of $84,338 ($759,044 ÷ 9 members = $84,883 per member).
Scope of Action: The proposed Resolution would approve CleanPowerSF’s payment of on- going administrative costs to continue participating as a member in CC Power in an amount not -to-exceed $100,000 per year beginning in fiscal year 2023-24 and increasing at an annual rate of 5% per year for a period Agenda Title: Approve CleanPowerSF’s payment of on-going general and administrative costs as a participant in the California Community Power Agency
Commission Meeting Date: June 27, 2023
of 25 years. This not -to-exceed amount includes a small contingency for unplanned costs in fiscal year 2023 -24 and an escalator over the 25 years to address inflation. Table 1 below summarizes the annual not -to-exceed amounts for fiscal years 2023-24 through 2025-26 and for fiscal year 2047-
48. Table 1. Not-to-Exceed On-going Administrative Costs Year
No.
Fiscal Year Not-to-Exceed
Amount
Annual 5%
Adjustment
1 2023-24 $100,000 $ 0.00
2 2024-25 $105,000 $5,000
3 2025-26 $110,250 $5,250
… … …
25 2047-48 $322,510 $16,215
Staff are proposing that the not-to-exceed amount be authorized for a term of 25 years (through fiscal year 2047-48) to provide stability over the 20- year term (2024 – 2044) of the geothermal Project Participation and Share Agreements CleanPowerSF has executed with CC Power and the term of future agreements that may be executed in the coming few years . Better alignment of CleanPowerSF’s payment of on-going
general and
administrative costs with the term of the project agreements it has executed will ensure that CleanPowerSF can fulfill its membership obligations during the term of its project agreements , subject to a reasonable not -to- exceed limit on its share of these expenses.
The existing budgetary approval from the Board of Supervisors ends at the end of calendar year 2023, so the proposed Resolution also authorizes the General Manager to seek Board of Supervisors approval of the on-going general and administrative costs , with the change becoming effective for fiscal year 2023-24 and continuing for 25 years.
Environmental Review: This action does not constitute a “project” under the California Environmental Quality Act (CEQA) Guidelines Section 15378 because funds would be used only for general and administrative costs and it does not involve commitment to any specific project that may result in a physical change in the environment. Procurement of energy and capacity from future energy projects will not commence unt il the project(s) have been reviewed and any appropriate environmental review under the CEQA, if required, has been completed.
Funding and Costs: The resolution would authorize CleanPowerSF to make annual payments of its share of the on-going administrative costs of CC Power for an amount not-to-exceed $100,000 in fiscal year 2023-24, increasing by 5% per year Agenda Title: Approve CleanPowerSF’s payment of on-going general and administrative costs as a participant in the California Community Power Agency
Commission Meeting Date: June 27, 2023
for 25 years. These costs will be funded by CleanPowerSF as an annual operating expense.
Attachment: 1. California Community Power Agency Strategic Business Plan
PUBLIC UTILITIES COMMISSION
City and County of San Francisco
RESOLUTION NO.
WHEREAS, The San Francisco Board of Supervisors 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) 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 and Business Practice Policies (Resolution No. 15-0267, amended with Resolution No. 18-0028), 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 initiated service to approximately 7,800 customers in May 2016, and following on the success of its initial phase of service, undertook multiple additional auto-enrollments, until citywide enrollment of all eligible customer accounts was completed in June 2020, resulting in now serving approximately 380,000 customer accounts with annual electricity sales of about 3,000 gigawatt-hours and an annual peak demand of 550 megawatts; and WHEREAS, The SFPUC, by Resolution No. 21 -0023, and the Board, by Ordinance No. 25-21, authorized CleanPowerSF to become a member of C alifornia Community Power (CC Power), a joint powers authority comprised of nine CCAs represent ing over 3 million customers across 148 municipalities spanning from Humboldt County to Santa Barbara County, and in April 2021 the CC Power Board approved CleanPowerSF’s membership (Resolution 21-04-09); and WHEREAS, Since joining CC Power, CleanPowerSF has executed Project Participation and Share Agreements to purchase energy and capacity from two long-duration energy storage projects and two geothermal projects, supporting its compliance with California Public Utilities Commission Decision 21-06-035; and
WHEREAS, On December 14, 2022 the CC Power Board approved and adopted a Strategic Business Plan , which establishes business objectives for the agency, including 1) b uild organizational capacity to provide value to members including hiring a full-time general manager and clarifying or adding operating policies and procedures, 2) successfully implement agreements for long duration storage and firm clean resources [geothermal] , 3) pursue opportunities enabled by the Inflation Reduction Act, including innovative technologies; and 4) achieve savings though joint procurement of programs and services; and
WHEREAS, In February 2023, consistent with the adopted Strategic Business Plan, CC Power hir ed a full -time general manager who is charged with developing the organizationa l capacity to successfully implement the existing power purchase agreements and pursue new opportunities that would benefit from multi-agency collaboration; and
WHEREAS, This action does not constitute a “project” under the California Environmental Quality Act (CEQA) Guidelines Section 15378 because funds would be used only for general and administrative costs and it does not involve commitment to any specific project that may result in a physical change in the environment; and procurement of energy and capacity from future energy projects will not commence until the project(s) have been reviewed and any appropriate environmental review under the CEQA, if required, has been completed; and
WHEREAS, The CC Power Board adopted a fiscal year 2023- 2024 budget for on -going general administrative activities totaling $759,044, of which CleanPowerSF’s pro -rata share is $84,833; now, therefore, be it
RESOLVED, T his Commission finds it is prudent and reasonable to approve a CleanPowerSF not-to-exceed amount for CleanPowerSF’s pro -rata contributions to CC Power’s on-going general and administrative expenses, including a contingency for additional, unanticipated, expenses for a period of 25 years to ensure that it is able to meet its general obligations as a member of CC Power while the long -term Project Participation and Share Agreements are in effect; and be it
FURTHER RESOLVED, That this Commission hereby approves CleanPowerSF’s share of the on-going general and administrative costs for its participation in the California Community Power Agency, for an amount not- to-exceed $100,000 per year adjusted by 5% per year for 25 years and authorizes the General Manager to seek Board of Supervisors approval.
I hereby certify that the foregoing resolution was adopted by the Public Utilities Commission at its meeting of June 27, 2023.
Secretary, Public Utilities Commission
Strategic Business Plan
cacommunitypower.org
December 2022
About Us
California Community Power is a Joint Powers Agency
Nine California Community Choice Aggregators have come
together to partner on our shared vision to accelerate the transition to a clean energy future.
Community Choice Aggregators, or CCAs, provide
competitively priced, clean energy choices to their
communities
24 CCAs serve more than 11 million customers in 201
towns, cities and counties throughout California.
CC Power members represent over 3 million customers
across 148 municipalities spanning from Humboldt County to Santa Barbara County.
Strategic Business Plan, California Community Power 2
Strategic Business Plan, California Community Power 3
Vision: To leverage the
buying power of our members
to deliver more cost-effective,
clean and reliable energy
solutions for our customers.
Mission: To develop, acquire, construct, own, manage, contract for, engage in, finance and/or provide energy related programs and services for the use of and by its Members. CC Power is not intended to be a policy-or advocate, though it may, from time to time, advance or support public policies in support of its purpose that do not conflict with interest or policies advanced by any Member.
Vision and Mission
Our Values
Acting together through CC Power will provide benefits greater than acting alone.
Strategic Business Plan, California Community Power 4
CC Power can be an enabler for:
• Meeting current and future
regulatory and resource
requirements and projects
• Identifying opportunities for
efficiencies in providing programs
and services serving the goals of
your respective agencies
• Realizing opportunities provided
with the Inflation Reduction Act
Strategic Priorities
Strategic Business Plan, California Community Power 5
Build organizational capacity to provide value to members including hiring a full-time general manager and clarifying or adding operating policies and procedures.
Build
Implement Successfully implement agreements for long duration storage and firm capacity resources [geothermal]
Pursue
Pursue opportunities enabled by the Inflation Reduction Act, including innovative technologies.
Achieve Achieve savings though joint procurement of programs and services
Business Plan Framework
Strategic Business Plan, California Community Power 6
CC Power successfully implements four committed projects and builds its organizational capacity to support further joint investments on behalf of its members.
Year 1
Year 2 CC Power Adds to its Portfolio of Projects, Programs and Services
Year 3
Dream Big
Build, own, operate projects
Explore innovation
Suggested Timeline
Strategic Business Plan, GM & Budget
Strategic Business Plan, California Community Power 7
General Manager assesses strategic business plan and
develops an action plan for Board approval
Adopt SBP Hire GM
12/22
Adopt
23/24
Budget
Adopt
24/25
Budget
02/23 06/23 06/24
GM evaluate SBP
and provides action plan
in 60-90 days
GM updates SBP
01/23 01/24
Board of
Directors
General
Manager
Year One Focus
Strategic Business Plan, California Community Power 8
Implement
the four
committed
projects
Refine and
Augment
Undertake
Launch at
least two
joint
programs
or services
Review
governance
framework
Refine and
augment
policies and
procedures
Undertake
activities to
maximize
IRA benefits
Implement Launch Review
Year 1 - Successfully Implement four
committed projects - $2.2 billion
Consistent theme from member interviews
• Viewed as reinforcing credibility
Complete Coordinated Operations Agreement and Scheduling Coordinator Agreement • Manage all pre-COD contractual obligations
Review and standardize project oversight processes (GM’s 1st 90 days) • Transfer responsibility for project committee functions to General Manager • GM assigns tasks and coordinates work of consultants
• GM works collaboratively with project participants
• Continues to draw on expertise of member staff while freeing them to pursue responsibilities of their ‘day jobs’
• Coordinates work to identify future projects and engage in work needed to bring proposals to Board • Create process for addressing technical, financial and legal concerns of participating members or those considering participation
Strategic Business Plan, California Community Power 9
Year 1 - Identify top two priority
programs/services and prepare plans
Develop processes to assess member needs and interests
Consider flexible models for participation; partnerships; expanding or replicating successful work underway by CC Power members Examples
• Customer billing interface with PG&E
• Scheduling coordination
• Data management
• Direct installation of energy efficiency
• Energy rebate processing
• Joint procurement: EV charging equipment; solar hot water heaters
• Consulting services for IRPs
• Emerging technologies
Strategic Business Plan, California Community Power 10
Review Governance Framework
Refine role of board and general manager
• Board-set policies, approve agreements and budgets, give direction to GM • GM-Operating responsibility; proposes policies, budgets, coordinates proposals, and vendor selection, responsible for contract negotiation and agreements – approved by board Working Groups/committees – Redefine role
• Composed of members staff; meet as needed
• Informal meetings without decision making authority ( not Brown Act) • Provide input and support to GM; share interests and ideas • Ensure member concerns are addressed
• GM reports to Board on group activities
Consultant resources
• Engaged as needed
• Board authorizes; may delegate to GM authority to manage resources Year 1 - Governance Framework
(GM’s 1st 90 days days)
Strategic Business Plan, California Community Power 11
This framework ensures
the GM is responsible
and member staff
expertise is integrated
into decisions.
Financial – What’s required to support CC
Power current and future obligations?
• New 1-year budget for FY 23-24 (new fiscal year
starts July 2023 per Board action in October
2022) (GM’s 1st 90 days)
• Payments, Cash requirements and Reserve
requirements
• Options for financing future projects
• Credit rating?
• Evaluate collaboration with California Financing
Authority?
Year 1 - Functional Areas for board actions,
policies and procedures
Strategic Business Plan, California Community Power 12
Year 1 - Functional Areas for board actions,
policies and procedures
Strategic Business Plan, California Community Power 13
This framework ensures
the GM is responsible
and member staff
expertise is integrated
into decisions.
Communications - Who is CC Power?
• Creates greater awareness of CC Power as an entity
• Attracts prospective market participants, prospective vendors and partners • Increases awareness of benefits from CC Power investments
Year 1 - Undertake activities in preparation
for maximizing benefits of IRA
Strategic Business Plan, California Community Power 14
This framework ensures
the GM is responsible
and member staff
expertise is integrated
into decisions.
Monitor Internal Revenue Service implementation process and public comments submitted • Decisions on rules and process expected in 2023
• Rules around direct pay of tax credits of particular importance • Other provisions address bonus credit or deduction amounts with respect to prevailing wage, apprenticeship, domestic content and energy community requirements
Organize one or more workshops on the IRA; separately or with CalCCA Engage financial and legal consultants to explore ways to optimize the IRA provisions Year 2 - Add Projects that use the benefits of the
IRA; Expand Portfolio of Programs and Services
Strategic Business Plan, California Community Power 15
Continue capacity building
Assess implications of direct or indirect ownership of resources • Resource and budget requirements to manage development, construction and operating risks of generation ownership • Managing exposure to CA liability and inverse condemnation rules
Continue to assess issues around financing and credit
Assess opportunities to partner –SMUD, NCPA, SCPPA, RENs, other CCAs
Investigate existing programs of members that might be expanded or replicated
Year 2 - Potential Projects
Strategic Business Plan, California Community Power 16
EV charging installations-
turn-key services
Joint subscription services
(e.g., S& P Global)
Joint energy efficiency
programs
Joint rebate processing
services
Data management services
Risk assessment and risk
management services
Creation of pooled services
for administrative functions,
human resources and
employee benefit programs
Projects to consider
• Large scale on-shore wind, off-shore wind
and geothermal projects
• Ownership as well as PPAs
• Solar and solar with storage
• Energy storage
• Stand-alone and long-duration
• Energy storage with renewable projects
• Demonstration energy storage projects
– new technologies
• Central management of demand response
Year 3 - Explore emerging technologies
- share risks
Strategic Business Plan, California Community Power 17