Peninsula Clean Energy
Board of Directors Meeting
March 24, 2022
Peninsula Clean Energy
Agenda
• Call to Order / Roll Call
• Public Comment (for items not on the Agenda)
• Action to set the Agenda and Approve Consent Items 1-4 o Consent - Public Comment
• Regular Agenda
• Adjournment
Chair Report (Discussion)
CEO Report (Discussion)
Peninsula Clean Energy
Staffing Updates
• COO decision soon
• CFO position posted
o Please send candidates our way!
Peninsula Clean Energy
Updates and “Meet and Greets”
• Letters of support for the CalCCA bill, AB 1814 re transportation electrification • March 11 – CPUC Commissioner Darcie Houck
o Thank you to Rick DeGolia (Atherton) and Rod Daus-Magbual (Daly City) for attending • March 18 – CEC Commissioner McAllister
o Focus on building electrification, reach codes, community solar • March 21 – CEC Commissioner Monahan
• March 24 – CPUC Commission President Alice Reynolds
o Thank you to Marty Medina (San Bruno) for attending
Peninsula Clean Energy
March 17 – all-staff, in-person, after 2 years apart!
Peninsula Clean Energy
8 Chelsea, Rafael, David, Matthew, Leslie Hint: SOLAR
Peninsula Clean Energy KJ, Sandra, Jan, Shayna, Jerry Hint: OHM 9 Peninsula Clean Energy Sara, Blake, Dave, Phillip, Marc Hint: Windpower 10 Peninsula Clean Energy 11
Carlos, Peter A, Vanessa, Kirsten, Michael Hint: WATT
Peninsula Clean Energy Peter L, Sally, Masha, Kim, Greg 12 Hint: HYDRO Peninsula Clean Energy 13
Nelly, Siobhan, Mehdi, Jeremy, Alejandra Hint: POWER
Peninsula Clean Energy
Upcoming Meetings
• Executive Committee:
o April 11 at 10:00 a.m. (Zoom)
• Citizens Advisory Committee:
o April 14 at 6:30 p.m. (Zoom)
• Board of Directors:
o April 28 at 6:30 p.m. (Zoom)
CAC Report (Discussion)
Appointments to the Executive
Committee and Audit & Finance
Committee (Action)
Authorize Agreement with Second
Imperial Geothermal (Heber 2)
Siobhan Doherty, Director of Power Resources
March 24, 2022
Peninsula Clean Energy
Recommendation
Approve Resolution Delegating Authority to Chief Executive Officer to Execute Power Purchase and Sale Agreement for Renewable Supply with Second Imperial Geothermal Company, and any Necessary Ancillary Documents with a Power Delivery Term of 15 Years Starting at the Commercial Operation Date on or about January 1, 2023, in an Amount Not to Exceed $275 Million (Action) 18 Peninsula Clean Energy
Mid-Term Reliability Decision (2023 – 2026)
• D.21-06-035 adopted by CPUC on June 24, 2021, to address mid-term reliability needs • LSEs required to collectively procure 11,500 MW of new resources • Allocated to LSEs by load share
• Resources must be zero-emission or RPS eligible (no fossil resources)
• 4,500 MW of obligation subject to specific category requirements (next slide)
19 Peninsula Clean Energy
Peninsula Clean Energy Allocation
20 Procurement Category 2023 2024 2025 2026 Total
Zero-emissions generation, generation paired with storage, or demand response resources2 - - 47 - 47
Firm zero-emitting resources3 - - - 19 19
Long-duration storage resources3, 4 - - - 19 19
Remaining New Capacity Required - - - - 132
Total Annual Net Qualifying Capacity (NQC) Requirements 38 113 28 38 217
1. Obligation is in NQC MW (not nameplate) and subject to ELCC factor
2. Zero-emissions resources required to replace Diablo Canyon must be procured by 2025 but may occur in any of the years 2023-2025; therefore, the columns do not add to the total.
3. LSEs may request an extension by February 1, 2023, up to 2028 for the LLT resources.
4. 4. Minimum 8-hour discharge
Procurement Obligation in NQC1 MW for Peninsula Clean Energy by Category and Year Peninsula Clean Energy
Background
• In July 2021, Ormat launched a request for bids for the Heber 2 project.
• Peninsula Clean Energy provided a bid in August and was shortlisted in September
• Since then, we have been working with Ormat to negotiate the terms of the agreement
• This project will replace and increase the capacity of an existing facility
• The incremental capacity will count towards our MTR requirements 21 Peninsula Clean Energy
Second Imperial Geothermal
22 Developer / Owner Ormat Technologies, Inc.
Location Imperial County
Capacity 26 MW
Capacity Factor 95%
Year 1 Expected
Generation
216,000 MWh
COD January 2023
Key Milestones Existing LGIA
100% Site Control on land owned
by Ormat
Construction Start by May 2022
Labor Committed to payment of
prevailing wages
Environmental Located adjacent to existing
project
DACs Located in DAC
Peninsula Clean Energy
Contract Structure
• Pay for the output of the geothermal generator at a fixed-price rate per MWh with no escalation
• Contract term: 15 years
• Peninsula Clean Energy is entitled to all product attributes from the facility:
o Energy
o Renewable energy
o Ancillary services
o Resource adequacy
• The project is located in the IID balancing authority – will need to be imported to CAISO using import allocations
23 Peninsula Clean Energy
Labor
• Project has committed to the payment of prevailing wages for the construction of the project.
24 Peninsula Clean Energy
Environmental Review
• In 2020, staff worked with several environmental non-profits to develop a system for evaluating the environmental impact of projects. Staff studied the geospatial footprint of the project to evaluate whether the project is located in a restricted or high conflict area for renewable energy development:
o Protected areas at the federal, state, regional, local level (e.g. County-designated conservation areas, BLM Areas of Critical Environmental Concern, critical habitat for listed species, national, state, county parks, etc.).
o Identified and mapped important habitat and habitat linkages, especially for threatened and endangered species (either state or federally listed).
• For this project, the analysis showed that the project was not located in a protected area based on the USGS Protected Areas Database (PAD-US). This project is located on Salt Affected Soils of California as defined by Natural Resources Conservation Service which means the land has little agricultural value.
USGS PAD-US: https://www.usgs.gov/core-science-systems/science-analytics-and-synthesis/gap/science/protected-areas Salt Affected Soils: https://databasin.org/datasets/c788fd949abf4aed9a85e82a0112bf3f/ 25 Peninsula Clean Energy
Generation Profile
26 Geothermal has a generally flat generation profile with slightly higher output in the winter compared to the summer – This is a good complement to solar and will help to meet our time-coincident goals
0.0 5.0
10.0 15.0
20.0 25.0
30.0 35.0
HE1 HE2 HE3 HE4 HE5 HE6 HE7 HE8 HE9 HE10 HE11 HE12 HE13 HE14 HE15 HE16 HE17 HE18 HE19 HE20 HE21 HE22 HE23 HE24 Month Hour Average Generation
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Peninsula Clean Energy
Fit with Strategic Plan
• Priority 1: Design a power portfolio that is sourced by 100% carbon free energy by 2025 that aligns supply and consumer demand on a 24x7 basis • Power Resources Goal 1: Secure sufficient, low-cost, clean sources of electricity that achieve Peninsula Clean Energy's priorities while ensuring reliability and meeting regulatory mandates
o Objective A Low Cost and Stable Power: Develop and implement power supply strategies to procure low-cost, reliable power.
o Objective B Clean Power: Design a diverse power portfolio that is 100% carbon-free by 2021; and is 100% carbon-free by 2025 that aligns supply and consumer demand on a 24 x 7 basis.
27 Peninsula Clean Energy
Recommendation
Approve Resolution Delegating Authority to Chief Executive Officer to Execute Power Purchase and Sale Agreement for Renewable Supply with Second Imperial Geothermal Company, and any Necessary Ancillary Documents with a Power Delivery Term of 15 Years Starting at the Commercial Operation Date on or about January 1, 2023, in an Amount Not to Exceed $275 Million (Action) 28 Local Government Solar and
Storage Program Approval
| 29
Peninsula Clean Energy
30 Local Gov. Solar Program: Request
Program: Local Government Solar and Storage
Requests
Approval of (prospective) capital for system installations and budget for next round of technical assistance
Amount
• $600,000 for technical assistance
• $8 million for prospective installation capital, repaid over 20 yrs Peninsula Clean Energy
Program Overview
Summary: Accelerate local renewable energy deployment at local government facilities
Objectives
• Local solar and storage towards PCE’s goal of 20 MW by 2025 • Reduce customer energy costs; insulate against rise in PG&E rates • Help local governments achieve sustainability goals
• Develop a reproducible program and new service model
31 Peninsula Clean Energy
Precedents
Aggregate Procurements
o Silicon Valley Renewable Energy Project (2010)
o 43 sites, 11MW
o Alameda County Regional Renewable Energy Procurement Project (2015) o 186 sites, 31MW
o Group-purchasing volume discounts: 10% to 14%
CCAs developing local solar PPAs
o Peninsula Clean Energy
o East Bay Community Energy
o CalChoice Energy
32 Peninsula Clean Energy
General Deal Structure
33 Equipment
Suppliers and
Facility Installers
B
Facility
C
PCE Provides
• Site evaluation, procurement and installation
• Aggregation of sites to facilitate better pricing
• Screen, select, and contract with reputable installers • PPA to at a $/kWh that is lower than utility rate
• Service with no added “margin” - only to cover costs
Facility
A
PPA
PPA
PPA
PCE
Peninsula Clean Energy
Completed Work
21 Site Assessments* • Site plan • Solar yield • Single line diagrams • Panel layout • Preliminary financials • Agency commitments in progress
34 *Completed in conjunction with McCalmont Engineering, extensive C&I and utility experience
Peninsula Clean Energy
Pilot Portfolio: 2 MW
35 Agency Site(s) Size (kW) Design with
Battery?
Status
Atherton Town Hall 113.5 No Approved
Belmont Belmont City Hall 88.5 No Approved
Brisbane Brisbane Mission Blue Center 11 Yes Approved
Colma Colma Community Center 61.5 Yes Approved
San Mateo
County
HSA Building 126 No Approved
Hillsborough Hillsborough Public Works Yard 41.8 No Approved Los Banos Community Center,
Waste Water Treatment Plant
152
287
No
No
Pending
Millbrae Millbrae Rec Center 155 No Approved
Millbrae Millbrae Chetcuti Complex 412 No Approved
Pacifica Pacifica Community Center 77 Yes Approved
Redwood City Fair Oaks Community Center 89 Yes Approved San Bruno Aquatic Center 270 No Pending
San Carlos San Carlos Youth Center 30 No Approved
San Mateo San Mateo Police Building 170 No Approved
Peninsula Clean Energy
Projected Savings
• 20-year solar-only benefit for approved portfolio sites: $4.5+M • Savings vary significantly by site type
• Batteries remain expensive – provide resilience but at a cost • Forthcoming rules for net energy metering (NEM 3.0) would likely affect economics significantly
o Timing of new rules is unclear, CPUC decision was delayed o Submitting interconnection promptly will put projects under current rules • Avoided PG&E rate increases may be very significant
o Seeking +~18% starting 2023
36 Peninsula Clean Energy
Goal and Progression
37 Timeline
Site Types 2020 2021 2022 2023
Pilot Cities Launch >> Assess Procure & Install Operate Round 2 Cities, schools, districts Assess & Procure Install Round 3 Public agencies & other? Assess & Procure
• Major component of 20 MW by 2025
• Facilitate all public agencies
• Potentially expand sectors with proven model
• Solar, storage and possibly other clean energy
Peninsula Clean Energy
Financial Structure
Capital
• Installation can be financed, but with interest
• PCE capital may reduce cost of capital
Tax Credit
• Federal Investment Tax Credit (ITC) + depreciation can reduce costs about one-third • Requires tax liability to secure
• PCE is tax-exempt
• PCE exploring tax equity partnerships to capture share of tax benefits Options being considered
1. Tax credit and finance secured together with a developer PPA (“all in” model)
2. PCE provides capital, secures tax credit with tax equity partner, contracts with developer solely for equipment and installation
o PCE capital treated as balance sheet asset
38 Peninsula Clean Energy
Pilot Next Steps
Q1
1. Finalize site assessments
2. Complete legal review and documents
Q2/Q3
4. Execute RFP
5. Evaluate proposals
6. Brief local governments on finalist terms (last off-ramp) Q3/Q4
6. Contract with local governments
7. Contract with developer
8. Begin installations
39 Peninsula Clean Energy
Round 2
• Larger aggregation: 20 to 40 sites
• Broader eligibility: all public agencies (schools, cities, special districts) • Schedule: begin outreach on finalization of Pilot business model • Budget: $600,000 for technical assistance
o Site evaluations
o Procurement support and construction oversight
o Project management
40 Peninsula Clean Energy
41 Local Gov. Solar Program: Request
Program: Local Government Solar and Storage
Requests
Approval of (prospective) capital for system installations and budget for next round of technical assistance
Amount
• $600,000 for technical assistance (round 2)
• $8 million for prospective pilot capital, repaid over 20 yrs Update on Results of the 2021 RFO for
Renewable Energy + Storage (Discussion)
Peninsula Clean Energy
Summary
43 Number of Participants 34
Number of Projects 70
Number of Offer Variants 106
Earliest COD 9/1/2022
Latest COD 1/1/2026
Number of Projects in California 65
Number of Projects outside California 5
Number of Participants: Number of unique counterparties/companies that participated in the RFO Number of Projects: Number of unique projects submitted in the RFO Number of Offer Variants: Number of unique offers submitted in the RFO. For example, for same project “A”, two offer variants with different contract lengths have been submitted.
Peninsula Clean Energy
Project Type Summary
44 Project Type Count
Firm Renewable 5
Variable Renewable 4
Renewable + Storage 23
Standalone Storage 74
Firm Renewable: Renewable resources that their generation can be predicted accurately and doesn’t depend on weather. (Geothermal and Biomass) Variable Renewable: Renewable resources that their generation depend on weather and fluctuate hour by hour. These are considered non-dispatchable resources. (Wind and Solar)
Peninsula Clean Energy
Projects’ Capacity
Type Total Capacity
Geothermal 56 MW
Biomass 57 MW
Wind 190 MW
Small Hydro 4 MW
Solar + Storage 1,000 MW Solar, 625 MW Storage
Standalone Storage 3,800 MW (65MW 6hr, 800 MW
8hr; 825 MW non Li-Ion)
45 Peninsula Clean Energy
PPA Prices
• Average PPA price for wind projects has not changed significantly compared to 2020 RFO
• PPA price for geothermal projects have increased by ~20%, due to Mid-Term Reliability Requirements
• PPA price for solar+storage projects have increased by ~10% for solar energy PPA price and ~35% for storage capacity price 46 Board Members’ Reports (Discussion)
Adjournment
Peninsula Clean Energy