Executive Committee Meeting
May 9, 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
o Public Comment
• Regular Agenda
Chair Report
Item 3
CEO Report
Item 4
Peninsula Clean Energy
Updates
Recruitment Updates
o COO – Shawn Marshall started on May 2!
o CFO – Interviewing top candidates
o Power Resources Manager
o Renewable Energy Analyst
o Electric Vehicle Associate Programs Manager
Hybrid Meeting Space
o Equipping board area at PCE offices for future hybrid meetings for EC and A&FC o Exploring venues for future hybrid board meetings
5 Peninsula Clean Energy
CC Power Firm Clean Update
• Issued RFO on Oct 25, 2021, for up to 200 MW of Firm Clean Resources, to achieve compliance with the CPUC D.21-06-035 requiring new firm clean resources (zero-emitting) such as geothermal to address mid-term reliability
o https://cacommunitypower.org/solicitations/
• Offers were due on Dec 13, 2021
• In February, CC Power shortlisted two geothermal developers • Negotiations are underway and one project PPA is near finalized (Expected schedule for approval and execution on next slide) • CC Power will execute projects under a similar structure as the long-duration storage with Tumbleweed XX 6
Peninsula Clean Energy
Peninsula Clean Energy Approval Process for CC Power Firm Clean Energy Geothermal Projects
XX
Date Event
5/9 May Executive Committee Provide background Relay approval schedule Mid-late May (tbd) Procurement Subcommittee Deeper dive on projects and contract 5/26 May Board Meeting Provide Board with background on project Relay approval schedule
Prior to June 15th (tbd) Special PCE Board Meeting in early June, ahead of CC Power Board Meeting (or Board
may decide to move to the scheduled June
Board Meeting)
Vote on CC Power participation
Vote on Peninsula Clean Energy participation
May 31st June 15th - CC Power Board Meeting to vote on CC Power’s participation in geothermal projects 6/23 June Board Meeting Report back on status of CC Power vote Vote on Peninsula Clean Energy participation
Review of 2021 Citizens Advisory Committee
Workplan Deliverables and Role of the
Committee
Item 5
Review of Proposed 2022 Citizens Advisory
Committee Workplan and Deliverables
Item 6
FY 2022-2023 Budget Review
(July 1, 2022 – June 30, 2023)
Initial Draft
Item 7
Peninsula Clean Energy
Schedule – Budget Review and Approval
11 • May 9, 2022 – Review Initial Draft Budget with Audit & Finance Committee • May 9, 2022 – Review Initial Draft Budget with Executive Committee • May 26, 2022 – Review Current Draft Budget with Board of Directors • June 13, 2022 – Review Revised Draft Budget with Audit & Finance Committee • June 23, 2022 – Approve Final Budget by Board of Directors Peninsula Clean Energy
Draft Budget FY2022-2023 – Key Assumptions
12 PG&E Generation Rates – significant rise in rates
o April 1, 2022 – increase 33%
o January 1, 2023 – decrease 10%
o Net change of up 20% as of 1/1/23 compared to 3/31/22 o San Mateo County and Los Banos rates are the same
PCIA Rates – significant decrease in rates
o April 1, 2022 – decrease 59%
o January 1, 2023 – increase 65%
o Net change of down 32% as of 1/1/23 compared to 3/31/22 o Los Banos PCIA rate is higher than SMC starting April 1, 2022. Lower starting on 1/1/23. Then, comparable after 1/1/24 Rates to PCE – up more than 100% through Jan 1, 2023 (although customers only pay an additional 33% in total) Load – FY23 forecasted to be 3.2% higher than FY22 forecast – FY22 includes only 3 months of Los Banos load Cost of Energy –
o Budgeted to increase 18% over FY22 forecast to $263 million (includes $15 million conservatism adder) o Increase of 11% without conservatism adder
Peninsula Clean Energy
PG&E and PCIA Rate Change Summary
13 1/1/2021 4/1/2021 4/1/2022 1/1/2023 1/1/2024 1/1/2025 1/1/2026 Actual Actual Forecast Forecast Forecast Forecast
PG&E Generation Rate 0.112 0.109 0.144 0.130 0.126 0.124 0.126 Generation Rate Change (Percent) 33% -10% -3% -1% 1%
Cumulative % Change from 1/1/22 33% 20% 16% 15% 16%
PCIA (System Average)
San Mateo County 0.032 0.047 0.019 0.032 0.033 0.031 0.028 PCIA Change (Percent) -59% 65% 3% -6% -8%
Cumulative % Change from 1/1/22 -59% -32% -30% -34% -39% PCE Rate to Ratepayers
San Mateo County
PCE Rate (net of PCIA and 5% Discount) 0.075 0.056 0.118 0.092 0.087 0.087 0.092 Net PCE Rate Change (Percent) 109% -22% -5% 0% 5%
Cumulative % Change from 1/1/22 109% 63% 55% 55% 62%
Los Banos 0.028 0.025 0.028 0.032 0.030 0.028
PCIA Change (Percent) -11% 13% 16% -6% -9%
Cumulative % Change from 1/1/22 -11% 0% 16% 9% -1%
Peninsula Clean Energy
Draft Budget FY23 – Summary
14 Budget and Forecast 2022 2022 Variance - Fav/ (Unf) 2023 Items Approved Budget Forecast $ Variance Initial Budget $ Change - Inc/(Dec) % Change
OPERATING REVENUES
Electricity Sales, net 219,619,107 236,757,514 17,138,407 364,961,141 128,203,627 54% Green electricity premium 2,621,034 2,764,175 143,141 2,822,550 58,375 2% 222,240,141 239,521,689 17,281,547 367,783,691 128,262,002 54%
OPERATING EXPENSES
Cost of energy 216,705,953 222,412,656 (5,706,703) 262,900,760 40,488,104 18% Staff compensation 6,464,275 6,132,735 331,540 8,249,693 2,116,958 35% Data Manager 3,420,000 3,397,930 22,070 3,600,000 202,070 6% Service Fees - PG&E 1,260,000 1,243,780 16,220 1,350,000 106,220 9% Consultants & Professional Services 1,351,204 1,060,014 291,190 1,431,813 371,799 35% Legal 1,615,500 1,328,611 286,889 1,474,000 145,389 11% Communications and Noticing 2,068,197 1,710,255 357,942 2,686,208 975,953 57% General and Administrative 2,259,391 2,106,435 1,152,272 2,359,806 253,371 12% Community Energy Programs 6,555,671 4,887,752 1,667,919 8,640,000 3,752,248 77% Depreciation 111,675 86,741 24,934 96,000 9,259 11%
Total Operating Expenses 241,811,865 244,366,909 (1,555,728) 292,788,280 48,421,371 20% Operating Income (Loss) (19,571,724) (4,845,220) 15,725,820 74,995,411 79,840,631 NON-OPERATING REVENUES (EXP.)
Total Nonoperating Income/(Expense) 900,000 (1,983,245) (2,883,245) 600,000 2,583,245 CHANGE IN NET POSITION (18,671,724) (6,828,465) 12,842,575 75,595,411 82,423,876 Net Position at the beginning of period 184,271,220 180,798,537 (3,472,684) 173,970,072 Net Position at the end of period 165,599,497 173,970,072 9,369,891 249,565,483 Total Cash & Cash Equivalents 168,332,845 162,964,482 (5,368,362) 238,559,894 Unrestricted Cash Days on Hand 250 243 297
Current Fiscal Year FY22
Variance Initial Budget vs. Prior Year
Forecast
Peninsula Clean Energy
Draft Budget Detail - Revenues
15 Budget and Forecast 2022 2023
Items Forecast Initial Budget $ Change - Inc/(Dec) % Change
OPERATING REVENUES
Electricity Sales, net 236,757,514 364,961,141 128,203,627 54% Commercial - Demand 19,060,125 19,622,891 562,766 3%
Streetlight and Agr- Demand 258,039 155,461 (102,577) -40% Commercial - Gen 112,412,969 176,626,802 64,213,833 57% Residential - Gen 103,186,947 166,666,713 63,479,766 62% Street lighting and Agr - Gen 2,213,075 3,723,249 1,510,174 68% CAPP Proceeds 1,667,791 - (1,667,791) -100%
Bad Debt Expense (2,041,432) (1,833,976) 207,457 -10%
Green electricity premium 2,764,175 2,822,550 58,375 2% 239,521,689 367,783,691 128,262,002 54%
Current Fiscal Year FY22
Variance Initial Budget vs. Prior Year
Forecast
Initial Fiscal Year Budget FY23
Peninsula Clean Energy
Draft Budget FY2022-2027 – Budget Summary & 5-year Plan 16 Budget and Forecast 2022 2022 2023 2024 2025 2026 2027 Items Approved Budget Forecast Initial Budget Forecast Forecast Forecast Forecast
OPERATING REVENUES
Electricity Sales, net 219,619,107 236,757,514 364,961,141 315,583,351 310,221,811 321,390,127 334,096,231 Green electricity premium 2,621,034 2,764,175 2,822,550 2,973,323 3,132,849 3,301,644 3,480,252 222,240,141 239,521,689 367,783,691 318,556,673 313,354,660 324,691,771 337,576,483
OPERATING EXPENSES
Cost of energy 216,705,953 222,412,656 262,900,760 266,150,723 259,404,029 261,318,950 265,549,966 Staff compensation 6,464,275 6,132,735 8,249,693 8,742,875 9,265,647 9,819,786 10,407,173 Data Manager 3,420,000 3,397,930 3,600,000 3,708,000 3,819,240 3,933,817 4,051,832 Service Fees - PG&E 1,260,000 1,243,780 1,350,000 1,390,500 1,432,215 1,475,181 1,519,437 Consultants & Professional Services 1,351,204 1,060,014 1,431,813 1,454,973 1,453,785 1,450,217 1,449,390 Legal 1,615,500 1,328,611 1,474,000 1,505,320 1,538,876 1,574,838 1,613,390 Communications and Noticing 2,068,197 1,710,255 2,686,208 2,916,529 3,129,555 3,218,162 3,309,427 General and Administrative 2,259,391 2,106,435 2,359,806 2,420,600 2,485,030 2,553,341 2,625,797 Community Energy Programs 6,555,671 4,887,752 8,640,000 13,750,000 15,550,000 18,850,000 23,000,000 Depreciation 111,675 86,741 96,000 96,000 96,000 96,000 96,000 Total Operating Expenses 241,811,865 244,366,909 292,788,280 302,135,520 298,174,377 304,290,293 313,622,411 Operating Income (Loss) (19,571,724) (4,845,220) 74,995,411 16,421,154 15,180,283 20,401,478 23,954,072 NON-OPERATING REVENUES (EXP.)
Total Nonoperating Income/(Expense) 900,000 (1,983,245) 600,000 618,000 636,540 655,636 675,305 CHANGE IN NET POSITION (18,671,724) (6,828,465) 75,595,411 17,039,154 15,816,823 21,057,115 24,629,377 Net Position at the beginning of period 184,271,220 180,798,537 173,970,072 249,565,483 266,604,637 282,421,460 303,478,574 Net Position at the end of period 165,599,497 173,970,072 249,565,483 266,604,637 282,421,460 303,478,574 328,107,951 Total Cash & Cash Equivalents 168,332,845 162,964,482 238,559,894 255,599,047 271,415,870 292,472,985 317,102,362 Unrestricted Cash Days on Hand 250 243 297 309 332 351 369 Current Fiscal Year FY22 Fiscal Year Projections
Staff Feedback and Discussion of
Potential Expansion
Prepared For: Executive Committee Meeting
May 9, 2022
Peninsula Clean Energy
Los Banos Background and Current Status
• October 2020 – Peninsula Clean Energy Board votes to expand JPA membership and offer service to Los Banos customers
• 2021: Hired Sandra Benetti to serve as Peninsula Clean Energy’s local representative in Los Banos • 12,405 account enrollments as of May 2022
• Local press/reception has been generally positive; recent participation in county fair and other Los Banos events and activities
• April 2022 City Council voted to participate in Local Government Solar and Storage pilot • Opt-out rate as of May 6: < 2% (?)
• Next Up: Rolling NEM enrollments
18 Peninsula Clean Energy
Initial Staff Feedback: Benefits
Key Question: Do the benefits of current/future expansion off-set the costs, administrative impacts and added complexities that come with expansion?
Identified Benefits:
Cleaner energy, competitive rates, and local energy programs available to more Californians Increase in carbon reduction and general climate change awareness in Merced County and the Central Valley Complementary load could help PCE achieve its 24/7 goals Potentially expands Peninsula Clean Energy’s climate policy influence in Sacramento and at the CPUC Could open access to additional programs and funding (e.g. DAC programs) not available in San Mateo Co. territory With scale and over time, could have a positive impact on revenues 19 Peninsula Clean Energy
Additional Customer Complexity
o Different PCIA vintages, different rate tables and rates, different customer programs Higher Cost Exposure
o Higher energy costs in high-heat summer months, higher administrative costs related to marketing/communications, duplicate rate setting, program administration, etc.
Administrative Impacts
o Different messaging/branding, collateral and webpages; possible additional power contracts; variation in program administration and availability (e.g. BayREN), duplicative rate setting, other opportunity costs Governance and Mission Alignment
o Expansion will impact Board membership, dynamics, focus and direction o Principal focus may differ, potentially impacting Board consensus Greater External/Market Exposure
o Added complexity w/r/t load forecasting and resource adequacy allocations and requirements o Volatile summer demand and market volatility/pricing could negatively impact 24/7 renewable power goal o Potential for greater scrutiny from external parties
20 Initial Staff Feedback: Challenges
Peninsula Clean Energy
Other Lessons Learned
Having a local staff representative with strong connections and history in the area is of great value Staff labor and other fixed costs associated with expansion and new customer enrollment is not proportional to the number of accounts added; the level of effort is similar whether the enrollment is 5,000 or 300,000 customers
Successful expansion may require additional staffing so as not to divert resources from existing priorities or missing other key opportunities.
21 Peninsula Clean Energy
Considerations Going Forward
Level of local government interest in the potential expansion territory Interest among local partners and advocates to support policy adoption Local capacity to support program implementation in the near and longer term Peninsula Clean Energy governance and other internal/external impacts Load, cost, timing and revenue impacts
22 Peninsula Clean Energy
Recommended Next Steps
1. Research current expansion policies and practices of other CCAs - Seasonal enrollments, load and customer size thresholds, shared costs, etc.
2. Conduct further analysis once Los Banos settles in
- Consider future minimum enrollment threshold(s)
- Cost vs revenue analysis
- Consider impact on Peninsula Clean Energy staffing and other internal resources
3. Informally gauge level of interest among local governments in potential expansion territory
4. Return to Board for discussion and direction
- Staff would like to be an information resource should the Board decide to consider further expansion 23 Review of Updated Peninsula Clean
Energy Staff Organization Chart
Peninsula Clean Energy 25
Committee Members’ Reports