Approve Power
Purchase Agreement
with IP Easley Solar
Project
May 28, 2024
100 MW San Pablo Raceway Project
2 Today’s Action
Requesting the Commission:
• Award a Renewable Power Purchase Agreement with the IP Easley Solar Project in an amount not to exceed $75M over 10 years
• Authorize the General Manager to seek approval from the Board of Supervisors to execute the Power Purchase Agreement, to the extent required
3 2022 Renewable Energy
Supplies Request for Offers
• Sought bids for new or existing renewable energy
resources for CleanPowerSF customers
• Preference for resources located within the 9-
County Bay Area
• Preference for resources that were eligible under
the California PUC’s Mid-Term Reliability
Procurement Order
• Start energy deliveries as early as January 2023
and as late as December 2028
• Contract terms up to 25 years
50.1 MW Voyager IV Wind Project
(PRO.0263)
4 Bid Evaluation Criteria
1. Qualifications and Experience of Proposer
• Firm Experience
• Financial Viability
2. Project Viability
3. Bid Value and Portfolio Fit
• Cost and Bid Value
• Contribution to a Diversified Portfolio
• Contribution to Mid-Term Reliability Order
Compliance
4. Generating Resource Location
5. Diversity, Equity and Inclusion Submittal
6. Social Impact Partnership Proposal
5 MW Sunset Solar System
5 IP Easley Solar Project
• Developer: Intersect Power
• Product: Portfolio Content Category
(PCC1) renewable energy
• Project size: 50 MW share of 400 MW
facility
• Location: Riverside County
• Technology: Solar Photovoltaic
• Labor: 5-trade Project Labor Agreement
• Commercial Operation Date:
September 2026 (expected)
• Contract term: 10 years
Blythe 63 MW Solar + 47 MW Storage Project
6 Project Development Status
IP Easley project has demonstrated high feasibility and timeline certainty:
• Will be interconnected to the California transmission grid via existing infrastructure under Intersect Power’s control
• Received Governor’s Certification for Judicial Streamlining as an Environmental Leadership Development Project
• Entered into Project Labor Agreements for the construction of the project • Prioritizing US-made project components
7 CleanPowerSF Portfolio
• CleanPowerSF’s power portfolio is
clean – in 2022 the
• Default Green product was 97%
renewable
• SuperGreen product was 100%
Renewable Portfolio Standard-
eligible
• Mix of solar, wind, geothermal,
hydroelectric
• IP Easley will add solar generation
to the portfolio
Identify System
Thank you!
DEPARTMENT
Power
AGENDA NO.
12 MEETING DATE
May 28, 2024
AGENDA ITEM
Public Utilities Commission
City and County of San Francisco
Calendar: Regular Calendar
Contract/Project Manager: Julia Olguin
Approve a Renewable Energy Power Purchase Agreement for CleanPowerSF with IP Easley LLC
1 Public Utilities Code Section 399.16(b) defines PCC1 resources as those with a first point of interconnection with a California balancing authority, have a first point of interconnection with distribution facilities used to serve end users within a Cali fornia balancing authority area or are scheduled from the eligible renewable energy resource into a California balancing authority without substituting electricity from another source.
Summary of
Proposed
Commission Action:
Authorize the General Manager to approve a Renewable Power Purchase Agreement for CleanPowerSF with IP Easley LLC in an amount not to exceed $75,000,000, for a duration of 10 years; and authorize the General Manager to seek approval from the Board of Supervisors to execute the P ower Purchase Agreement, under Charter Section 9.118.
Background: To acquire the new renewable energy supplies needed to meet the City’s clean energy targets and state regulatory requirements, the SFPUC issued a Request for Offers (PRO.0263, CleanPowerSF 2022 Renewable Energy Supplies), on September 21, 2022 seeking renewable energy from new or existing Eligible Renewable Energy Resources, Eligible Renewable Energy Resources paired wit
h storage and Demand Response Capacity Resources with delivery commencement dates as soon as January 1, 2023 and as late as December 31, 2028. The SFPUC indicated that it would consider offers for contracts up to a maximum of twenty-five years in duration.
In response to PRO.0263, the SFPUC received 11 unique bids from six different companies. These proposals were subsequently reviewed by SFPUC staff to ensure their compliance with minimum bid requirements and scored according to criteria set forth in PRO.0263. As a result of this process, SFPUC staff recommend that the IP Easley Solar Project (Easley Project) , to be
constructed by Intersect Power, be considered for contract award.
Scope of Contract: The proposed contract with IP Easley LLC ( Easley LLC) will provide Portfolio Content Category 1 (PCC1) 1 renewable energy to CleanPowerSF from an Eligible Renewable Energy Resource Facility for ten years. The Easley Project will be constructed in Riverside County, California and will begin delivering energy to CleanPowerSF on January 1, 2027. The proposed contract will exceed $10 million with a contract duration of 10 years , and Agenda Title: Authorize the General Manager to approve a Renewable Power Purchase Agreement for CleanPowerSF with IP Easley LLC
Commission Meeting Date: May 28, 2024
Page: 2
therefore will also require approval from the Board of Supervisors. While this contract could be exempt from Board approval under Administrative Code §21.43, that authorization is subject to a cumulative expenditure limit. Since there is sufficient time, staff are seeking Board approval, rather than count this contract towards the expenditure limit.
The contract will include the terms stated above and use the SFPUC’s Form Renewable Energy Power Purchase Agreement, with appropriate revisions to reflect the project pricing, schedule and other details.
Funding and Costs: Funding Source: This contract will be funded entirely from CleanPowerSF customer revenues. The contract costs are in line with CleanPowerSF’s expected power supply costs over the FY27- FY34 period in its adopted 10- year Financial Plan.
Result of Inaction: Possible non -compliance with state regulatory requirements including the California Renewables Portfolio Standard requirements for renewable energy supplies including requirements to procure renewable energy under long-term contracts, defined as ten years
or more in duration. Inaction may cause
CleanPowerSF to be deficient in renewable energy supplies to meet the City’s target of achieving and maintaining 100% clean and renewable electricity supplies starting in 2025.
Schedule: Advertised:
PRO.0263, CleanPowerSF 2022 Renewable Energy Supplies: September 21, 2022
Estimated Contract Execution Date:
August 15, 2024
Estimated Commercial Operation Date:
January 1, 2027
Estimated End Date:
December 31, 2036
Duration:
10 years
Evaluation and
Selection Criteria:
In addition to the requirements detailed below, Proposers were required to describe their company’s organization, key personnel, business operations and the third parties (if applicable) relied upon to provide the propos ed power products; describe their
overall ability and qualifications to deliver each
product bid; and describe their financial viability (or a guarantor’s) and credit Agenda Title: Authorize the General Manager to approve a Renewable Power Purchase Agreement for CleanPowerSF with IP Easley LLC
Commission Meeting Date: May 28, 2024
Page: 3
support (e.g., a parental guarantee) by providing audited financial statements and a credit rating history for the previous two years, if applicable.
In addition, Proposers were required to acknowledge or account for the following bid requirements in their proposals:
• Bids may be for new or existing facilities.
• Resources must be directly interconnected to the California Independent System Operator (California ISO) Balancing Authority Area. • For Eligible Renewable Resources, minimum annual energy deliveries of 10,000 megawatt-hours per year and a maximum of 300,000 megawatt - hours per year.
• Both energy-only and fully deliverable (i.e., including Resource Adequacy capacity) renewable energy products will be considered with the expected value of any Resource Adequacy capacity accounted for in the evaluation process.
• Energy storage resources must provide Energy, Ancillary Services, and Resource Adequacy capacity, and be at least 1
megawatt Alternating
Current for at least a 4-hour duration.
• Demand Response resources shall be no less than five (5) megawatts per month and be able to deliver Mid- Term Reliability -
eligible Resource
Adequacy capacity.
• Proposals must have an initial contract delivery date no later than December 31, 2028.
• Proposed contract terms shall be no more than twenty-five (25) years. • All renewable energy deliveries must meet the eligibility criteria for Renewables Portfolio Standard Portfolio Content Category 1. • All renewable energy deliveries from new projects must meet the eligibility criteria for Green-e Energy program.
• Bids may be for all or part of a generating facility’s output. • Bids of renewable energy shall, at a minimum include the following two pricing alternatives:
o A fixed $/megawatt -hour price, for each year of the proposed contract term, for delivery to the generator node.
o A fixed $/megawatt -hour price, for each year of the proposed contract term, for delivery to the North Path - 15 trading hub, as defined by the California ISO.
• In addition to a fixed price, Proposers were also invited to provide alternate price adjustment proposals or index plus premium pricing. Any alternate price adjustment proposals shall contain a base price, price ceiling, and a complete list of items that are to be considered in any adjustments.
Proposers shall also include a detailed explanation of the pricing proposal and a sample calculation.
• Each pricing option shall remain unchanged throughout the entire contract term and shall not be adjusted by periodic escalators or time of delivery multipliers/factors.
Agenda Title: Authorize the General Manager to approve a Renewable Power Purchase Agreement for CleanPowerSF with IP Easley LLC
Commission Meeting Date: May 28, 2024
Page: 4
• Each Proposer must certify that the products bid will not be generated by facilities that utilized or relied on forced labor in their construction, operation or maintenance, consistent with the business advisory jointly issued by the U.S. Departments of State, Treasury, Commerce and Homeland Security on July 1, 2020, addressing equipment or resources sourced from the Xinjiang region of China.
Evaluation Criteria and Selection of Pool
The SFPUC evaluated the bids provided in response to PRO.0263 to establish a balanced, cost -effective, and v
iable portfolio of supply for the
CleanPowerSF program.
The SFPUC evaluated the bids received based on the following criteria:
• Development Firm Experience
o Experience and track record of the Proposer and key personnel. o Volume of energy supplied in the most recent calendar year. • Project Financial Viability
o Financial strength and viability of Proposer as exhibited by previous two (2) years of financial statements.
o Credit support to be provided if credit rating is below investment grade.
• Project Development Viability
o Likelihood that a project will meet the proposed commercial operation date as described: site control, interconnection, permits, financing, labor agreements.
o Commitment to and description of proposed labor agreement, community workforce agreement, work site agreement, or similar agreement providing for terms and conditions of employment and workforce training, if applicable.
• Cost and Bid Value
o Proposed pricing in relation to the contract’s portfolio value (provides lowest net cost).
o Contribution to long-term retail rate stability and competitiveness (price and term of bid).
o Value of energy and/or non- energy attributes (e.g., Resource Adequacy capacity, storage, time of delivery value of energy). o Impact of the bid on operational costs, residual ma rket exposure, and financial risk.
• Contribution to a Diversified Portfolio
o The compatibility of the bid’s proposed monthly energy deliveries and Resource Adequacy capacity attributes with energy portfolio needs.
o The bid’s contribution to the development of a diverse portfolio (technologies, fuel types, resource locations, operating profiles). • Contributions to Mid-Term Reliability Order Compliance Agenda Title: Authorize the General Manager to approve a Renewable Power Purchase Agreement for CleanPowerSF with IP Easley LLC
Commission Meeting Date: May 28, 2024
Page: 5
o The total net qualifying capacity that can be applied towards 2023- 2025 Mid-Term Reliability Order obligations.
o The total Diablo Canyon Power Plant replacement Net Qualifying Capacity that can be applied towards 2023- 2025 Mid- Term Reliability Order obligations.
• Generating Resource Location
o Preference for resources located within the nine Bay Area Counties.
• Diversity, Equity and Inclusion Submittal
o Submission of a firm’s Diversity, Equity and Inclusion Plan. • Social Impact Partnership Proposal
o SIP work approach and project team organization.
o SIP Commitments
Job exposure, training, or internship
Small business support
Education
Environment and community health
o Performance measures, accountability, and deliverables.
Proposer
Recommended for
Consideration of
Contract Award:
The Easley Project is recommended by the Evaluation Team as the highest scoring available proposal for contract award based on the Evaluation and Selection Criteria identified above.
The developer of the Easley Project, Intersect Power, bid a 50 megawatts portion of the 400-megawatt solar project into PRO.0263 with a 10- year delivery term. The project is expected to come online between September 2026 and January 2027. Under the proposed contract, electricity delivered during the first seven years of the agreement would be priced at a bundled rate for the energy and all of the associated environmental attributes. The final three years of the agreement would be priced at an “index plus” pricing structure where Easley LLC would receive energy revenues directly from California ISO for the electrical energy delivered to the grid, while CleanPowerSF would pay Easley LLC a fixed price for the environmental attributes and Renewable Energy Certificates from the project. This pricing structure allows CleanPowerSF to limit its California ISO electric energy price exposure and adds pricing and tenor diversity to CleanPowerSF’s power supply portfolio, while meeting the statutory requirements of a Renewable Portfolio Standard Portfolio Content Category 1 resource. The agreement also helps CleanPowerSF secure long-term renewable energy at a stable price. The project provides financial value to CleanPowerSF’s portfolio and helps the program deliver 100% renewable energy to its ratepayers.
Intersect Power is an experienced developer, having developed over 2.8 gigawatts of solar capacity across California and Texas. Intersect Power is financially strong and has provided evidence of adequate liquidity to complete project development.
Agenda Title: Authorize the General Manager to approve a Renewable Power Purchase Agreement for CleanPowerSF with IP Easley LLC
Commission Meeting Date: May 28, 2024
Page: 6
The Easley Project has demonstrated high permitting and interconnection viability, that supports an online date within the next 3 years. The project recently received a Governor’s Certification for Judicial Streamlining, in accordance with Public Resources Code Section 21178. The Governor may certify projects investing over $100 million in the California economy or providing affordable housing so long as they meet heightened environmental and labor standards. Certified projects receive expedited judicial review for any lawsuits filed under the California Environmental Quality Act.
The Easley Project, made up of 400 MW of solar and 650 MW of energy storage, is projected to contribute $296 million to the California economy upon completion of construction. Intersect Power has al so entered into a Project Labor Agreement with IBEW Local 440, Ironworkers Local 416, Ironworkers Local 433, Operating Engineers Local 12, Laborers Local 1184 and the Southwest Regional Council of Carpenters for the construction of the project. The project will be interconnecting to the California transmission grid via an existing switchyard and gen- tie line under Intersect Power’s control, helping minimize project delays.
Diversity, Equity and Inclusion
Intersect Power did not submit a Diversity, Equity and Inclusion Plan for the Easley Project and therefore the bid did not recei ve any points in that part of the evaluation process.
Social Impact Partnership
PRO.0263 included a Social Impact Partnership (SIP) component. SIP proposals are firm commitments o n the part of the bidder to be delivered to communities served by or impacted by the SFPUC. PRO.0263 invited Proposers to submit proposals for community benefits to be invested in San Francisco County and/or the county in which the renewable project will be located. Intersect Power did not submit a Social Impact Partnership proposal with their bid and did not receive any SIP points in the evaluation process.
Environmental
Review:
The IP Easley Solar Project will undergo environmental review in Riverside County. The Power Purchase Agreement allows CleanPowerSF to terminate 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 IP Easley Solar Project by the date specified in the Power Purchase Agreement. 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.
Agenda Title: Authorize the General Manager to approve a Renewable Power Purchase Agreement for CleanPowerSF with IP Easley LLC
Commission Meeting Date: May 28, 2024
Page: 7
Recommendation: SFPUC staff recommend that the Commission adopt the attached resolution.
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, and 232-09); and
WHEREAS, In April 2019, CleanPowerSF completed citywide enrollment of residential accounts, which an annual energy requirement of approximately 3,000 gigawatt-hours; and WHEREAS, On September 21, 2022, the SFPUC issued PRO.0263, CleanPowerSF 2022 Renewable Energy Supplies, seeking bids for energy, environmental attributes, and capacity from new and existing Eligible Renewable Energy Resources, as defined in California Public Resources Code Section 25741, Eligible Renewable Energy Resources paired with battery storage, and Demand Response capacity in support of the CleanPowerSF program; and with initial delivery dates as late as December 31, 2028 for contract terms of up to 25 years; and WHEREAS, The SFPUC received seven distinct project proposals response to PRO.0263, CleanPowerSF 2022 Renewable Energy Supplies, and on November 18, 2022 notified Proposers that some or all of their proposals submitted under PRO.0263 were selected for further consideration; and
WHEREAS, The SFPUC evaluated seven distinct proposals that met the minimum qualifications according to criteria that considered the Proposer’s experience, Financial Viability, Project Viability, Cost a nd Bid Value, Contribution to a Diversified Portfolio, Contributions to Mid-Term Reliability Order Compliance, Generating Resource Location, Diversity Equity and Inclusion, and Social Impact Partnership proposals; and WHEREAS, The Easley Solar Project pro posed by the developer Intersect Power was determined to provide significant benefits to the CleanPowerSF power supply portfolio as the highest scoring available proposal according to the project scoring categories to secure long-term renewable energy supplies in support of CleanPowerSF ’s local and state electricity procurement requirements; and
WHEREAS, The IP Easley Solar project will undergo environmental review in Riverside County and the Power Purchase Agreement allows CleanPowerSF to terminate 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 IP Easley Solar Project by the date specified in the agreement; 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 this Commission hereby authorizes the General Manager to approve a Renewable Energy Power Purchase Agreement for CleanPowerSF with IP Easley LLC proposed by Intersect Power through PRO.0263, in substantially the same form of the SFPUC Form Renewable Energy Power Purchase Agreement, and further authorizes the General Manager to modify that Agreement as long as such modifications, in the judgement of the General Manager
and the City Attorney, do not materially decrease the City’s rights or materially increase its liabilities; and be it
FURTHER RESOLVED, That this Commission authorizes the General Manager to seek Board of Supervisors approval to execute a Renewable Energy Power Purchase Agreemen t with IP Easley LLC in an amount not -to-exceed $75,000,000 and a contract duration of 10 years.
I hereby certify that the foregoing resolution was adopted by the Public Utilities Commission at its meeting of May 28, 2024.
Secretary, Public Utilities Commission