Peninsula Clean Energy
Board of Directors Meeting
August 25, 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 1-8 o Consent - Public Comment
• Regular Agenda
• Adjournment
Chair Report (Discussion)
August 25, 2022
CEO Report (Discussion)
August 25, 2022
Peninsula Clean Energy
Welcome!
Welcome -
• Cora Dino, our new Director of Human Resources, who
started on Monday, August 15
• Joe Ficalora, our new Electric Vehicles Associate
Programs Manager who started Monday, August 22
Peninsula Clean Energy
Hiring Updates
• Jeff Wright, new Power Resources Manager starting
August 31
• Moya Enright, new Senior Renewable Energy Analyst
starting September 1
• Zsuzsanna Klara, new Regulatory Compliance Analyst
starting September 12
Peninsula Clean Energy
Open Positions
oDirector of Power Resources
oStrategic Accounts Manager
Peninsula Clean Energy
Audit & Finance Committee – Opening!
Need one additional
board member to serve
on Audit & Finance
Committee
Peninsula Clean Energy
Presentations to City Councils
Starting update presentations to all city councils on what’s happening with PCE
Completed:
• June 8 – Colma
• June 21 – Half Moon Bay
• July 25 – Daly City
• August 8 – Hillsborough
• August 15 - Burlingame
Planned:
• September 13 – Millbrae
• October 3 – Redwood City
• October 6 – Brisbane
• October 12 – Portola Valley
9 Peninsula Clean Energy
September 22 Board Retreat – 5:30 to 9:30 pm
• Consent Agenda (5 min)
• DEAI Policy Adoption (30 min)
• Strategic Plan Dashboard Update (25 min)
o Break (5 min)
• Update and Discussion on 100% renewable on 24/7 basis by 2025 (75 min) o Break (5 min)
• Update and Discussion on 2035 Decarbonization Plan (75 min) 10 Peninsula Clean Energy
Inflation Reduction Act
Passed by Congress and Signed by President Biden on August 16 • Restores PTC (Production Tax Credit) to full subsidy level of $26/MWh (wind, solar, geothermal) • Restores ITC (Investment Tax Credit) to full subsidy level of 30% ITC, plus up to 20% additional bonus • Expands ITC to include standalone storage
• ITC and PTC require prevailing wage and apprenticeship requirements to receive full credit • Provides direct subsidy (“direct pay”) to non-tax paying renewable owners (CCAs, municipalities) • EVs:
o New vehicle tax credit of $7,500 for all customers
o Up to $4,000 tax credit for used EVs Energy Efficiency Credits • Buildings:
o Rebates for electrifying appliances for moderate and low-income households 11 Peninsula Clean Energy
Legislative Activities Update
12 • Amendment of the Clean Air Act
• Assembly’s Climate Legislation Proposal
• Governor’s 6 Proposals:
o AB 2133 – Increases 2030 GHG emission reduction goal to 55% from 40% o SB 1137 - Establishes a 3,200-foot setback requirement between new oil wells and places where people live or work o SB 1020 – Interim clean energy targets, 90% by 2035 and 95% by 2040 o AB 1395 – Codifies state’s 2045 carbon neutrality goal o SB 905 – Directs the Air Resources Board to establish a program on carbon capture and storage (CCS) o Diablo Canyon – Lend $1.4 billion to PG&E to keep Diablo Canyon operating through 2030 with an option to extend through 2035
Peninsula Clean Energy
Upcoming Meetings
• Citizens Advisory Committee:
o September 8 at 6:30 p.m. (Zoom)
• Executive Committee:
o September 12 at 10:00 a.m. (Zoom)
• Board of Directors (Retreat):
o September 22 at 5:30 p.m. (Zoom)
• Audit and Finance Committee:
o October 12 at 8:30 a.m. (Zoom)
CAC Report (Discussion)
August 25, 2022
Report from the Audit and Finance Committee
on Investment Management Strategies
(Discussion)
August 25, 2022
DAC-GT
Dos Palos Clean Energy Solar
Project
Peter Levitt, Program Manager
August 25, 2022
Peninsula Clean Energy
Recommendation
• Approve Resolution Delegating Authority to Chief Executive Officer to Execute Power Purchase and Sale Agreement for Renewable Supply with Renewable America, LLC for the 3 MW Dos Palos Clean Power solar project and any necessary ancillary documents with a Power Delivery Term of 20 years starting at the Commercial Operation Date on or about August 1, 2023, in an amount not to exceed $12.7 million. 17 Peninsula Clean Energy
Disadvantaged Community Solar (DAC-GT, CS-GT)
Program Overview
• Renewable energy in and for disadvantaged communities • Discount of 20% on participant bills
• “Above market” costs reimbursed through the CPUC
Status
• San Mateo County and Los Banos enrolled
• Served by interim resource from MCE (Goose Lake Solar) • Solicitation for new resource completed
Next Step
• Board approval of new resource PPA
18 Peninsula Clean Energy
CPUC Programs PCE is Administering
19 Program Resource Requirement Date PCE Began
Offering
# of Customers
Currently Served
Disadvantaged
Community Green
Tariff (“DAC-GT”)
• Renewable generation can be
sited at any DAC in PG&E
territory
SMC: January 2022
Los Banos: April 2022
SMC: 638 / 680 possible
LB: 364 / 364 possible
Community Solar
Green Tariff
(“CSGT”)
• Renewable generation must be
sited within 5 miles of participating
customers
• Must include a “community
sponsor” to support outreach
Peninsula Clean Energy
DAC-GT and DAC-CSGT Allocations
• Total PCE allocation = 2.57 MW
• 1.24 MW for San Mateo County
• 1.33 MW (estimated) for Los Banos. This is a transfer from PG&E, with final allocation still to be confirmed by CPUC.
• Total project size: 3 MW
o PCE’s procurement costs of 0.43 MW above its allocation are not reimbursed 20 Peninsula Clean Energy
Timeline / Evaluation
• Released RFO for projects, November 2021
• Received 7 offers from 4 bidders for DAC-GT projects (none for CSGT). All were compelling projects with good teams.
• Recommended Dos Palos Clean Power Project, key points:
o Executed SGIA with PG&E with minimal distribution upgrades, highest confidence it will reach COD
o Earliest online date of all offers
21 Peninsula Clean Energy
Dos Palos Clean Power
22 Developer Renewable America LLC
Owner (post COD) Excelsior Energy Capital
Location Merced County
Solar Capacity 3 MW
Capacity Factor 32.8%
Storage Size N/A
MWh / ~% of Load ~9,142 / 0.2%
COD August 1, 2023
Key Milestones SGIA: Executed
Labor PLA or similar agreement
DACs Located in DAC
CONFIDENTIAL
Peninsula Clean Energy
Contract Structure
• Solar PPA at fixed $/MWh price for the 20-year term
• No escalation
• Contract term: 20 years beginning at COD, 12/31/2023
• Peninsula Clean Energy is entitled to the following product attributes from the facility:
o Energy only
• Scheduling Coordinator: Peninsula Clean Energy
23 Labor: Commitment to use of PLA or similar agreement Environmental: May 2022 report by Panorama Environmental, Inc. advises no special status wildlife species and no special status plant species
Peninsula Clean Energy
Recommendation
• Approve Resolution Delegating Authority to Chief Executive Officer to Execute Power Purchase and Sale Agreement for Renewable Supply with Renewable America, LLC for the 3 MW Dos Palos Clean Power solar project and any necessary ancillary documents with a Power Delivery Term of 20 years starting at the Commercial Operation Date on or about December 1, 2023, in an amount not to exceed $12.7 million.
24 Item 14 - Authorize Amendment to
Power Purchase Agreement w/
Chaparral Solar + Storage Project
Chelsea Keys
Interim Director, Power Resources
August 25, 2022
Peninsula Clean Energy
Recommendation
Approve Resolution Delegating Authority to Chief Executive Officer to Execute a Third Amendment to the Power Purchase and Sale Agreement (PPA) and any necessary Ancillary Documents for the Solar + Storage Project with Chaparral Solar, LLC
26 Peninsula Clean Energy
Policy 15 – Energy Supply Procurement Authority
• Any amendments to agreements previously approved by the Board, require consultation with General Counsel and the Board Chair for approval
• In the interest of transparency, because this PPA has a term > 5 years, we are bringing this amendment to the Board tonight for approval
• On July 21, 2022, staff met with the Procurement Subcommittee to relay the details of this amendment and the challenges developers in the industry are facing for projects in development
27 Peninsula Clean Energy
Background of Project
28 Project Chaparral Solar
Developer Leeward Renewable Energy,
LLC
Technology 102 MW solar +
52 MW storage (4hr)
Location Kern County, CA
Term 15 years
Delivery
Start
December 31, 2023
Board
Approval
Date
September 25, 2021
Courtesy of Leeward Renewable Energy
(Chaparral Project construction)
Peninsula Clean Energy
Challenges & Disruptions in the Energy Market
• Inflation – High commodity prices (steel,
copper, aluminium, fuel etc)
• Lithium supply scarcity – EV market driving up
demand
• Interest rates rising
• Supply Chain disruptions
o COVID still has some impacts
o Developers experiencing hurdles as their suppliers
back out of their contracts because the production of
materials are delayed and costs are so much higher
• Solar tariff uncertainty
29 Courtesy of Leeward Renewable Energy
(Chaparral Project construction)
Peninsula Clean Energy
Solar Tariffs
• Solar developers fear the U.S. Commerce Dept. investigation into anti-dumping and countervailing duties could lead to tariffs rising to 250% on solar materials imported from SE Asia countries ~80% of US supply.
o Biden issued an executive order to place a 2-yr suspension of any new solar tariffs but the uncertainty of what will happen with the investigation lingers w/ developers
30 Peninsula Clean Energy
Impacts to Market
• Many developers are having to revisit their executed PPAs with the buyers for renewable projects that are in development
• PG&E issued an Advice Letter-6658 requesting approval of two contract amendments to PPAs from CPUC
o One PPA amendment requires a change to one project’s online date from 2022 to 2023 and a reduction to the capacity size. The other amendment required a price increase.
• These amendments are examples of the types of changes developers are seeking with buyers to ensure projects remain economical and on track in their development stage
31 Peninsula Clean Energy
CPUC Mid-Term Reliability Decision
• D21-06-035, the CPUC procurement order adopted June 24, 2021, requiring 11,500 MW of new generation between the years 2023 – 2026 to ensure grid reliability
• Created competition in the market – Load serving entities must procure to their set requirements for each year (2023 – 2026) • Chaparral contribute toward Peninsula Clean Energy’s MTR requirements
32 Peninsula Clean Energy
Impacts on Chaparral
• Chaparral has been impacted by a combination of challenges - primarily supply chain disruptions and inflation creating a supply scarcity and driving up commodity prices for materials to construct renewable projects
• The developer, Leeward, has come back to Peninsula Clean Energy requesting changes to particular PPA terms to reduce the possibility of termination
• While this PPA was executed roughly 1 year ago, the market has changed considerably since then and the project’s economics are at risk
33 Peninsula Clean Energy
Procurement Subcommittee
• Staff met with the Board Procurement Committee on July 21, 2022, to relay some of the economic impacts on Peninsula Clean Energy’s projects and the status of our amendment negotiations
• Each member of the subcommittee supported staff’s efforts to negotiate amendments, alleviating the risk of PPAs terminating o General consensus: The long-term projects Peninsula Clean Energy has contracted for are key to meeting its Mid-Term Reliability procurement obligations and further demonstrate that our organization is committed to bringing online new renewable resources to the grid, despite the current challenges.
34 Peninsula Clean Energy
Chaparral Amendment
• Staff conducted extensive analysis on the impacts of this amendment to our power supply portfolio and has determined that the changes are acceptable
• We believe it would be difficult to contract for other resources at a competitive price and be able to achieve commercial operations under the same timeline
• The amendment does not impact Peninsula Clean Energy’s Mid-term Reliability requirements, this project will meet the requirements as originally planned
35 Peninsula Clean Energy
Recommendation
Approve Resolution Delegating Authority to Chief Executive Officer to Execute a Third Amendment to the Power Purchase and Sale Agreement (PPA) and any necessary Ancillary Documents for the Solar + Storage Project with Chaparral Solar, LLC
36 Peninsula Clean Energy
Questions
37 Courtesy of Leeward Renewable Energy (Chaparral Project) – Installing wire harness Item 15: Power Purchase
Agreement for Buena Vista Wind
Chelsea Keys
Interim Director, Power Resources
August 25, 2022
Peninsula Clean Energy
Recommendation
• Approve Resolution Delegating
Authority to Chief Executive Officer
to Execute Power Purchase and
Sale Agreement for Renewable
Supply with Buena Vista Energy,
LLC, and any necessary ancillary
documents with a Power Delivery
Term of 5 years beginning on
January 1, 2023, in an amount not
to exceed $37 million.
Courtesy of Leeward Renewable Energy (Buena Vista) 39
Peninsula Clean Energy
Background
• The Peninsula Clean Energy Board
previously approved a PPA with Buena
Vista on March 23, 2017, for a term of 5
years
• The PPA expired in April 2022 and staff
has been negotiating with the developer
to extend this PPA for another term for
several months
• There is strong demand to contract for
wind projects in California and the
Buena Vista project is an attractive
project for Peninsula Clean Energy’s
portfolio
Courtesy of Leeward Renewable Energy (Buena Vista)40
Peninsula Clean Energy
Project Overview
41 Owner Leeward Renewable
Energy, LLC
Counterparty Buena Vista Energy, LLC
Location Contra Costa County, CA
(North of Altamont pass)
Term 5 years
Delivery Start January 1, 2023
Price Fixed $/MWh
Environmental
/ Permitting
Completed, existing project
Labor N/A
Courtesy of Leeward Renewable Energy (Buena Vista)
Peninsula Clean Energy
Contract Structure
• Peninsula Clean Energy is entitled to all
product attributes from the facility:
o Energy
o Renewable energy
o Ancillary services
o Resource adequacy
• Project Share:
o Energy: PCE will receive 90% of 38 MW
capacity for 2023-2024, 100% 2025-
2027
o Resource Adequacy: PCE will receive
100% for the full term
• Scheduling Coordinator: PCE will become
the SC beginning 2025
Courtesy of Leeward Renewable Energy (Buena Vista) 42
Peninsula Clean Energy
Developer
• Leeward Renewable Energy, LLC
o US based energy developer that owns and
operates a portfolio of 24 utility-scale projects
across 9 states w/ a total generating capacity >
2,500 MW
o Leeward is also the developer for the Chaparral
102 MW solar and 52 MW battery storage project
43 Peninsula Clean Energy
Generation Profile
44 • Buena Vista’s generation profile compliments Peninsula Clean Energy’s energy profile – generates less during solar hours and more in the evening hours
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MWh MWh MWh
Mo nth=Se p Mo nth=Oct Mo nth=Nov Mo nth=Dec
Mo nth=Ma y Mo nth=Ju n Mo nth=Jul Mo nth=Au g
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Peninsula Clean Energy
Project Benefits
• Peninsula Clean Energy previously contracted for this project • Very few projects available to start deliveries in 2023 • Adds portfolio diversity – important to have contracts with various term lengths to allow room to procure different resources for the portfolio that may come available later
o Buena provides a shorter-term: 5-year contract
• The financial impact of adding this project is a net benefit compared to expected supply costs
45 Peninsula Clean Energy
Recommendation
• Approve Resolution Delegating
Authority to Chief Executive Officer
to Execute Power Purchase and
Sale Agreement for Renewable
Supply with Buena Vista Energy,
LLC, and any necessary ancillary
documents with a Power Delivery
Term of 5 years beginning on
January 1, 2023, in an amount not
to exceed $37 million.
Courtesy of Leeward Renewable Energy (Buena Vista) 46
Approval of Increased Budget
Flexibility in Programs
Board of Directors
August 25, 2022
| 47
Peninsula Clean Energy
Program Overview
Request: Board approval of increased flexibility for use of funds within the approved Community Energy Programs departmental budget.
Objectives
• Improve responsiveness to customer demand
• Reduce actions at the Board
• Increase program impacts
48 Peninsula Clean Energy
Current Practice
The Board takes budget-related actions related to programs at three levels:
1. Organization and Departmental budget: PCE’s organizational budget which includes a specific Community Energy Programs department allocation that covers expenses for our various programs.
2. “Programmatic” budgets: Multi-year budgets for distinct programs
3. Contracts: Over $100,000 within a Fiscal Year
49 Peninsula Clean Energy
Challenge
• Program uptake projections are made with best available information • Market conditions and other factors make projections are very imprecise • Uptake can vary significantly and can create excess capacity in some programs while other programs are oversubscribed
• Opportunities arise to advance objectives and be responsive to customer demand if funds can be shifted in a timely manner
• The current practice requires returning to the Board for budget change authorizations slowing responsiveness and creating added administrative burden 50 Peninsula Clean Energy
Proposed New Practice
The Board takes budget-related actions at two levels:
1. Organization and Departmental budget: PCE’s organizational budget which includes a specific Community Energy Programs department allocation that covers expenses for our various programs.
2. Contracts: Over $100,000 within a Fiscal Year
Staff manages program budgets to maximize objectives and will inform the board about any re-allocations of funding between programs. 51 Peninsula Clean Energy
Legacy Budget Approvals
Request is proposed to apply retroactively:
• EV Ready – EV charging incentive program
• Existing Buildings – including Appliance Incentives and Home Upgrade
• Used EV – Electric vehicle incentives
• E-Bikes – Electric bike incentives
52 Peninsula Clean Energy
Program Overview
Request: Board approval of increased flexibility for use of funds within the approved Community Energy Programs departmental budget.
Objectives
• Improve responsiveness to customer demand
• Reduce actions at the Board
• Increase program impacts
53 Board Members’ Reports (Discussion)
August 25, 2022
Adjournment
Peninsula Clean Energy