Peninsula Clean Energy
Board of Directors Meeting
June 23, 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 1-3 o Consent - Public Comment
• Regular Agenda
• Adjournment
Chair Report (Discussion)
June 23, 2022
CEO Report (Discussion)
June 23, 2022
Peninsula Clean Energy
Staffing Updates (1)
• Kristina Alagar Cordero, new CFO
• Starting July 25
Peninsula Clean Energy
Staffing Updates (2)
• Posted Positions:
o Regulatory Compliance Analyst
o EV Associate Programs Manager
o Power Resources Manager
o Renewable Energy Analyst
o Human Resources Manager
o Director of Power Resources
Peninsula Clean Energy
CC Power Update
• May 31 Special Meeting of CC Power Board
o Approved CC Power to execute agreements for Firm Clean Resources between CC Power and:
o Fish Lake Geothermal
o Ormat Geothermal Portfolio projects
• Next step
o Peninsula Clean Energy Board consider approving PCE participation in these two projects at July 28 board meeting
Peninsula Clean Energy
RFP Issued for Local Government PV Systems
• Portfolio of 15 public facilities in San Mateo County and Los Banos
• Peninsula Clean Energy will offer PPA directly to each city for the output of the solar (and storage)
• Peninsula Clean Energy will contract directly with solar contractors for the construction of these facilities
o Aggregating these projects is expected to result in lower costs for cities o Looking at two models to provide the savings from the tax benefits (ITC, accelerated depreciation) to pass on to the cities
Peninsula Clean Energy
Presentations on PCE’s 24/7 Goal
• June 16 – SVLG ”ESG to Carbon Free” at
Oracle
• June 22 – American Solar Energy Society
”Solar 2022” conference, plus publication of
PCE paper in conference proceedings
9 Peninsula Clean Energy
Legislative Activities Update
10 Bills Headed to the Assembly (1):
• SB 887 (Becker) would help California prepare for the necessary and increasing amounts of transmission of clean energy by requiring the CEC and CPUC to provide long term forecasts to the CAISO. SB 887 passed the state Senate and is now before the Assembly. • SB 1020 (Laird, Caballero, Durazo, Atkins) is the Senate leadership’s Clean Energy, Jobs and Affordability Act. Among its many provisions is funding for home infrastructure upgrades. The bill was passed in the Senate and is now being heard in the Assembly.
Peninsula Clean Energy
More Bills Headed to the Assembly (2):
• SB 1112 (Becker) encourages the creation of tariff on-bill financing investment programs to make low-cost capital for climate-beneficial building upgrades. The bill passed in the Senate and is now before the state Assembly.
• SB 1203 (Becker) would establish a planning goal for all state agencies to achieve zero net GHG by 2035 and electricity purchase by the state. The bill passed in the Senate and is now before the Assembly. • SB 1393 (Archuleta) would have limited local jurisdictions abilities to enact reach codes. The bill was heavily amended so that it is no longer opposed by the League of California Cities and CalCCA. It has cleared the Senate and is now before the Assembly.
11 Legislative Activities Update
Peninsula Clean Energy
Legislative Activities Update
12 Bills Headed to the Senate:
• AB 1944 (Lee and C. Garcia), which would permit an elected official to teleconference into a meeting from a non-disclosed location, was passed by the full Assembly and is now headed to the Senate for consideration.
Peninsula Clean Energy
Headed to Assembly Committee on Natural Resources:
• SB 1158 (Becker) would mandate the hourly reporting of the GHG intensity of load serving entities. SB 1158 passed in the Senate and was heard in the Assembly Committee on Utilities and Commerce on June 22. Peninsula Clean Energy provided testimony in support of the bill before that committee.
• Peninsula Clean Energy will provide testimony on Monday, June 27 at the Assembly Committee on Natural Resources.
13 Legislative Activities Update
Peninsula Clean Energy
Upcoming Meetings
• Executive Committee:
o July 11 at 10:00 a.m. (Zoom)
• Citizens Advisory Committee:
o July 14 at 6:30 p.m. (Zoom)
• Board of Directors:
o July 28 at 6:30 p.m. (Zoom)
CAC Report (Discussion)
June 23, 2022
Approval of Fiscal Year 2022-2023 Budget (Action)
June 23, 2022
Peninsula Clean Energy
Schedule – Budget Review and Approval
17 • 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/Proposed Final Budget w/Audit & Finance Committee o Include minor adjustments to forecast for year-end June 30, 2022 • June 23, 2022 – Approve Final Budget by Board of Directors Peninsula Clean Energy
Proposed Budget FY2022-2023 – Key Assumptions
18 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
19 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
Proposed Budget FY2022-2023 – and FY2021-2022 Forecast
20 Budget and Forecast 2022 2022 Variance - Fav/(Unf) 2023 Items Approved Budget Forecast $ Variance Proposed Budget $ Change - Inc/(Dec) % Change
OPERATING REVENUES
Electricity Sales, net 219,619,107 238,605,965 18,986,858 364,961,141 126,355,176 53% Green electricity premium 2,621,034 2,795,259 174,224 2,822,550 27,291 1% 222,240,141 241,401,224 19,161,082 367,783,691 126,382,467 52%
OPERATING EXPENSES
Cost of energy 216,705,953 222,759,361 (6,053,408) 264,208,440 41,449,079 19% Staff compensation 6,464,275 6,220,953 243,322 8,583,221 2,362,268 38% Data Manager 3,420,000 3,401,178 18,822 3,600,000 198,822 6% Service Fees - PG&E 1,260,000 1,244,528 15,472 1,350,000 105,472 8% Consultants & Professional Services 1,351,204 1,100,949 250,255 1,431,813 330,864 30% Legal 1,615,500 1,243,016 372,484 1,474,000 230,984 19% Communications and Noticing 2,068,197 1,497,702 570,495 2,686,208 1,188,506 79% General and Administrative 2,259,391 2,065,386 194,005 2,359,806 294,420 14% Community Energy Programs 6,555,671 2,721,655 3,834,016 8,640,000 5,918,345 217% Depreciation 111,675 84,269 27,406 96,000 11,731 14%
Total Operating Expenses 241,811,865 242,338,996 (527,130) 294,429,488 52,090,492 21% Operating Income (Loss) (19,571,724) (937,772) 18,633,952 73,354,203 74,291,975 NON-OPERATING REVENUES (EXP.)
Total Nonoperating Income/(Expense) 900,000 (5,649,493) (6,549,493) 600,000 6,249,493 CHANGE IN NET POSITION (18,671,724) (6,587,265) 12,084,459 73,954,203 80,541,468 Net Position at the beginning of period 184,271,220 180,798,537 (3,472,684) 174,211,272 (6,587,265) Net Position at the end of period 165,599,497 174,211,272 8,611,775 248,165,475 73,954,203 Unrestricted Cash Days on Hand 250 239 289
Current Fiscal Year (FY2022) Proposed Budget (FY2023)
Variance - Proposed Budget vs. Prior Year
Forecast
Peninsula Clean Energy
Proposed Budget FY2022-2023 – Budget Summary & 5-year Plan 21 Budget and Forecast 2023 2024 2025 2026 2027
Items Proposed Budget $ Change - Inc/(Dec) % Change Forecast Forecast Forecast Forecast
OPERATING REVENUES
Electricity Sales, net 364,961,141 126,355,176 53% 315,583,351 310,221,811 321,390,127 334,096,231 Green electricity premium 2,822,550 27,291 1% 2,973,323 3,132,849 3,301,644 3,480,252 367,783,691 126,382,467 52% 318,556,673 313,354,660 324,691,771 337,576,483
OPERATING EXPENSES
Cost of energy 264,208,440 41,449,079 19% 269,006,994 260,068,548 259,890,754 263,405,340 Staff compensation 8,583,221 2,362,268 38% 9,096,415 9,640,400 10,217,023 10,828,245 Data Manager 3,600,000 198,822 6% 3,708,000 3,819,240 3,933,817 4,051,832 Service Fees - PG&E 1,350,000 105,472 8% 1,390,500 1,432,215 1,475,181 1,519,437 Consultants & Professional Services 1,431,813 330,864 30% 1,454,973 1,453,785 1,450,217 1,449,390 Legal 1,474,000 230,984 19% 1,505,320 1,538,876 1,574,838 1,613,390 Communications and Noticing 2,686,208 1,188,506 79% 2,916,529 3,129,555 3,218,162 3,309,427 General and Administrative 2,359,806 294,420 14% 2,420,600 2,485,030 2,553,341 2,625,797 Community Energy Programs 8,640,000 5,918,345 217% 13,750,000 15,550,000 18,850,000 23,000,000 Depreciation 96,000 11,731 14% 96,000 96,000 96,000 96,000 Total Operating Expenses 294,429,488 52,090,492 21% 305,345,331 299,213,649 303,259,334 311,898,857 Operating Income (Loss) 73,354,203 74,291,975 13,211,342 14,141,011 21,432,437 25,677,626 NON-OPERATING REVENUES (EXP.)
Total Nonoperating Income/(Expense) 600,000 6,249,493 618,000 636,540 655,636 675,305 CHANGE IN NET POSITION 73,954,203 80,541,468 13,829,342 14,777,551 22,088,073 26,352,931 Net Position at the beginning of period 174,211,272 (6,587,265) 248,165,475 261,994,817 276,772,368 298,860,441 Net Position at the end of period 248,165,475 73,954,203 261,994,817 276,772,368 298,860,441 325,213,373 Unrestricted Cash Days on Hand 289 295 319 341 363
Proposed Budget (FY2023) Fiscal Year Projections
Variance - Proposed Budget vs. Prior Year
Forecast
Approval of New Peninsula Clean Energy
Rates to be Effective July 1, 2022 (Action)
June 23, 2022
Peninsula Clean Energy
23 • PG&E implemented rate adjustments across customers classes on June 1, 2022
• These adjustments were part of a ‘revenue neutral’ system-wide adjustment in accordance with PG&E’s 2020 GRC Phase II
proceeding on rate design.
• While the adjustments are revenue neutral across PG&E’s service territory, they are not entirely revenue neutral for Peninsula Clean Energy because we serve only a small segment of PG&E’s
customer base
June 1, 2022 PG&E Rate Change
Peninsula Clean Energy
24 (PG&E Generation Rate * 0.95) – PCIA –FFS
= PCE ECOplus Rate
Current PCE Rate Making Methodology
Peninsula Clean Energy
2016 Vintage PCIA
PCIA ($/kWh)
Customer Class 3.1.22 6.1.22 % Change
Residential $ 0.02002 $0.02018 0.80%
Small Commercial $ 0.01928 $0.01920 -0.41%
Medium Commercial $ 0.02072 $0.02035 -1.79%
Large Commercial $ 0.01938 $0.01923 -0.77%
Streetlights $ 0.01594 $0.01649 3.45%
Standby $ 0.01441 $0.01447 0.42%
Agriculture $ 0.01790 $0.01804 0.78%
E-20 T $ 0.01678 $0.01682 0.24%
E-20 P $ 0.01750 $0.01744 -0.34%
E-20 S $ 0.01793 $0.01779 -0.78%
BEV1 $ 0.01691 $0.01632 -3.49%
BEV2 $ 0.01929 $0.01902 -1.40%
Peninsula Clean Energy
2021 Vintage PCIA
PCIA ($/kWh)
Customer Class 3.1.22 6.1.22 % Change
Residential $0.02554 $0.02572 0.70%
Small Commercial $0.02458 $0.02446 -0.49%
Medium Commercial $0.02643 $0.02594 -1.85%
Large Commercial $0.02471 $0.02450 -0.85%
Streetlights $0.02033 $0.02101 3.34%
Standby $0.01837 $0.01843 0.33%
Agriculture $0.02283 $0.02299 0.70%
E-20 T $0.02140 $0.02143 0.14%
E-20 P $0.02231 $0.02223 -0.36%
E-20 S $0.02286 $0.02267 -0.83%
BEV1 $0.02156 $0.02080 -3.53%
BEV2 $0.02442 $0.02423 -0.78%
Peninsula Clean Energy
27 Approve Resolution to implement new rates
Authorize New Peninsula Clean Energy rates to be effective July 1, 2022 with a net 5% discount in generation charges for ECOplus compared to PG&E generation rates
Calpine Master Services
Agreement Amendment for
FlexMarket
Board of Directors
June 23, 2022
Peninsula Clean Energy
29 FLEXmarket Program Resolution
Delegate authority for the CEO to amend the Master Services Agreement between Peninsula Clean Energy and Calpine, resulting in payments by Peninsula Clean Energy in an amount not to exceed $4,678,563 over three years for the FLEXmarket program, and in a form approved by the General Counsel.
Peninsula Clean Energy
30 FLEXmarket Overview
Overview
• Multi-technology load shaping program
• Pay-for-performance structure based on actual metered readings • All program expenses reimbursed by the CPUC
• Leveraging strategic partnership between Calpine and Recurve • Other CCAs have launched similar programs (MCE, EBCE, SCP) Objectives
• Pilot an innovative program model
• Support summer reliability (Governor’s 2021 Emergency Proclamation) • Align load with grid needs and complement 24/7 renewables Peninsula Clean Energy
FLEXmarket Structure
31 Receive Meter
Data Register Price
Installations/
Aggregators Programs
PCE Customers
Process Meter
Data
Determine net
load impact
FLEXmarket Platform
Peninsula Clean Energy
History & Schedule
32 Timeframe Activity
Nov 2021 PCE Board approves PCE Program Plan
PCE submits FLEXmarket Program Plan to CPUC
Feb 2022 PCE submits updated FLEXmarket Program Plan
May 2022 CPUC approves PCE’s proposal (up to $4.6M/3 years, fully reimbursed) PCE continues program design work with Recurve
June 2022 Negotiated Contract with Calpine & Recurve
Developed Implementation Plan
Summer 2022 Finalizing program design, recruiting aggregators, and launching Peninsula Clean Energy
Calpine Master Services Amendment: Key Points
33 • Scope of Work for Calpine & Recurve to implement & administer FLEXmarket for PCE
o Recruit aggregators and process payments
o Collect and share project data with PCE
o Calculate customer energy savings, grid value, and aggregator payments o Validate aggregators’ invoices on a quarterly basis
o Support regulatory reporting
o Create a dashboard monitoring program results
o Pay-for-performance payments to Recurve/Calpine
Board of Directors
June 23, 2022
2022 Reach Codes
Peninsula Clean Energy
What are Reach Codes and Why Are They Important?
35 What are Reach Codes?
• Local enhancements to state code
• Can be adopted at any time
• Addresses:
1. Building electrification – reduced use of methane gas
2. Electric vehicle (EV) charging infrastructure – increased readiness • Improves economic and energy performance of buildings Why Pass Them?
• It is the most cost-effective way to decarbonize buildings and add EV charging • All-electric buildings are typically less expensive to construct that buildings with two fuels • EV charging is much less expensive to add during construction than after Peninsula Clean Energy
2019 Recap: Adopters
36 33
12 15
6 16
1 6
9 0 10 20 30 40 50
Total
Silicon Valley Clean Energy
Peninsula Clean Energy
East Bay Community Energy
Adopted Not Yet Adopted
• 67% of member agencies
• 61% of electrification Reach Codes statewide
• 23 of 33 also had EV infrastructure codes Plus Hillsborough and Belmont!
Peninsula Clean Energy
2022 Reach Code Support Timeline
January
Kickoff
February
Begin on-going
outreach
March-May
Cost
effectiveness
studies
June
2nd draft
reach
codes,
outreach
September-October
Local
adoption
January 1,
2023
Codes take
effect
Peninsula Clean Energy
Proposed 2022 Building Electrification Reach Codes
38 • Also could restrict extension of any existing gas infrastructure All-electric new construction required
• If either of the below are replaced over 3 years for purposes other than repair or reinforcement
• 50% of above-sill framing, or
• 50% of foundation
New construction definition
• Infeasible to construct according to CA Energy Code
• “Public interest”
• Technology-specific exceptions expiring in 2025
• Electric-readiness required
• Pre-wiring
• Physical space
Optional exceptions
Find our codes on:
BayAreaReachCodes.Org
Peninsula Clean Energy
EV Code Terminology
39 Speed Readiness Number
Level 1
3-4 miles per
charging hour
Level 2
10-20 miles per
charging hour
Level 3
150+ miles per charging hour
EV Capable
EV Charging Station
Percent of
Parking Spaces
EV Ready
Peninsula Clean Energy
Proposed 2022 Electric Vehicle Reach Code
Multifamily New Construction
2019 CALGreen 2022 CALGreen
Model code
Mandatory Mandatory
Multi-Family
10%
40% 60%
10% Level 2 EV
Capable
5% Level 2 EVCS
25% Level 2 EV Ready
(low-power)
10% Level 2 EV Capable
SVCE Preferred
Lower-Power Model Code:
40% Level 2 EVCS
60% Level 1 EV Ready
5%
10%
25%
85%
PCE Higher-Power Model Code
15% Level 2 EVCS
85% L2 EV Ready (low-power)
15%
% of Parking Spaces % of Dwelling Units with Parking Spaces
AUTOMATIC LOAD MANAGEMENT ENCOURAGED
Peninsula Clean Energy
Existing Building Reach Codes: New Opportunity
41 Electrifying existing buildings provides the greatest opportunities for local decarbonization.
Overview
• 99% of our buildings are existing
• It takes 15 years to cost-effectively electrify our building stock • Some measures are zero cost
• Some electrification measures need incentives to close the cost gap • Broad policy actions can help with planning
Peninsula Clean Energy
EV Infrastructure – Existing Buildings
42 Multifamily and Non-Residential
2022 CALGreen
(baseline state requirement) Reach Code
At time of alteration*:
10% of added/altered spaces to be EV Capable
At time of alteration:
10% of added/altered spaces to be Level 2 EVCS
By Jan 1, 2025:
Existing EV Capable must convert to minimum Level 1
*Alterations are defined in CALGreen as a project that adds new parking facilities or when electrical or lighting are added to existing parking facilities and the project requires a permit.
Peninsula Clean Energy
Possible Timeline for Existing Model Code Concepts
(Residential)
Title Summary of Policy
No-cost measures -2-way AC (if we add incentive,)
-Dryer (if circuit exists and short vent run)
-Range (if circuit exists)
No-cost policies -End-of-flow ordinance (ex. Half Moon Bay) -Time of sale disclosure
Low-cost and highly variable cost
measures
-Certain renovations
-Electric make-ready
-HPWH
-Dryers (without existing 240V)
-Ranges (without existing 240V)
High-cost measures -Furnace to HP
43 Peninsula Clean Energy
Examples: Existing Building Measures
44 End of flow ordinances
Time of sale disclosures
Permit / equipment replacement
Panel replacement electric readiness
Peninsula Clean Energy
Example Costs – Variable
45 $3,000
Gas $1,500
Electric
$1,051 $950
$2,175
Gas Dryer Electric Dryer (if
outlet exists)
Electric Dryer
Dryer Cost Comparison
Replace In-Kind vs Electrification
Cost to Homeowner
Saves up to $100, or costs up to $1,100
Peninsula Clean Energy
Example Costs – Incentives Backstop Policy
$3,000
$1,500
$16,000 $17,000
Air Conditioner Replacement 2-Way A/C + Heat Pump
Air Conditioner Cost Comparison
Replace In-Kind vs Electrification
Cost to Homeowner Electric AC
Gas Heating
All-Electric
46 Peninsula Clean Energy
Example Costs – Incentives Backstop Policy
$3,000
$1,500
$16,000 $14,000
$3,000
$16,000 $17,000
Air Conditioner Replacement 2-Way A/C + Heat Pump
Air Conditioner Cost Comparison
Replace In-Kind vs Electrification
Cost to Homeowner Incentive
Electrification Saves up to $2,000
Electric AC
Gas Heating
All-Electric
47 Peninsula Clean Energy
Example Costs – Operating Costs
$3,000
$1,500
48 End Use Monthly Energy Cost Impact
Water heating $1 savings
Space heating $10 savings
Clothes drying $11 increase
Cooking $6 increase
Gas meter fee $7 savings
Total $1 savings
The following table summarizes expected operating costs associated with different electrification measures, assuming standard, code-compliant equipment. These numbers are based on previous consultant studies and will be updated as we compare actual on-bill savings of program participants.
Peninsula Clean Energy
Timing?
1. New Construction Reach Codes
A. When do you think your city will bring new construction reach codes to council?
B. Do you think a study session and two meetings will be required, or will there be less meetings this cycle than last cycle? C. How controversial will new construction reach codes be this cycle?
Peninsula Clean Energy
Timing?
2. Existing Building Reach Codes
A. When do you think your city will bring existing building reach codes to council?
B. How many public meetings associated with this process would be appropriate?
C. How controversial will existing building reach codes be? D. Are you considering passing any existing building reach codes at the same time as new construction, or staggering the efforts? Questions & Discussion
| 51
Board Members’ Reports (Discussion)
June 23, 2022
Adjournment
Peninsula Clean Energy