Peninsula Clean Energy
Board of Directors Meeting
September 22, 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 1-2 o Consent - Public Comment
• Regular Agenda
• Adjournment
Chair Report (Discussion)
September 22, 2022
CEO Report (Discussion)
September 22, 2022
Peninsula Clean Energy
Welcome!
Welcome -
• Jeffrey Wright, our new Power Contracts Manager who started on August 31st
• Moya Enright, our new Senior Renewable Energy Analyst who started on September 1st
• Zsuzsanna Klara, our new Regulatory Compliance Analyst who started on September 12th
Peninsula Clean Energy
Open Positions
• Director of Power Resources
• Strategic Accounts Manager
Peninsula Clean Energy
Tonight’s Schedule
5:30 Consent: 5 minutes
5:35 Chair report: 5 minutes
5:40 CEO report : 5 minutes
5:45 CAC update: 5 minutes
5:50 Arica Solar: 10 - 15 minutes
6:05 DEAI update: 5 minutes
6:10 Strategic Plan Update: 25 minutes
6:35 Break: 5 minutes
6:40 24/7 Renewables by 2025: 75 minutes
7:55 Break: 5 minutes
8:00 2035 Decarb Plan: 75 minutes
9:15 Board Member Reports: 5 minutes
9:20 Adjourn
Peninsula Clean Energy
Upcoming Meetings
• Audit and Finance Committee:
o Wednesday, October 12 at 8:30 a.m. (Zoom)
• Executive Committee:
o Wednesday, October 12 at 10:00 a.m. (Zoom)
• Citizens Advisory Committee:
o October 13 at 6:30 p.m. (Zoom)
• Board of Directors:
o October 27 at 6:30 p.m. (Zoom)
CAC Report (Discussion)
September 22, 2022
Authorize Amended and Restated Power
Purchase Agreement for Arica Solar +
Storage
Chelsea Keys
Interim Director, Power Resources
September 22, 2022
Peninsula Clean Energy
Recommendation
Approve Resolution Delegating Authority to the Chief Executive Officer to Execute an Amended and Restated Power Purchase and Sale Agreement (A&R PPA) with Arica Solar, LLC, and any necessary ancillary documents.
11 Peninsula Clean Energy
Background of Arica Solar + Storage project
12 Project Developer Technology Location Expected
Start Date
Board Approval
Date
Arica Clearway
Energy Group
100 MW solar +
50 MW storage (4hr)
Riverside
County Apr 1, 2024 Oct 26, 2021
Photos courtesy of Clearway Energy
Peninsula Clean Energy
Challenges & Disruptions in the Energy Market
• Inflation – High commodity prices (steel, copper, aluminum, fuel etc) • Lithium supply scarcity – EV market driving up demand • Changes in interest rates
• Supply Chain disruptions –
o COVID still has some impacts
o The precedent was that the costs for materials become fixed when developers sign contracts, but now some suppliers require that the material costs float up until a certain point in the contract
• Uncertainly around future solar tariffs which have potential to increase 13 Peninsula Clean Energy
Impacts to Buyers in 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
• 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
• While the Inflation Reduction Act signed by President Biden in August has provided some cost relief, challenges still exist, and costs remain high for developers
14 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) • Arica contributes toward Peninsula Clean Energy’s MTR requirements 15 Peninsula Clean Energy
Impacts on Arica
• Arica has been impacted by a combination of challenges - primarily supply chain disruptions creating a supply scarcity and driving up commodity prices for materials to construct renewable projects • The developer, Clearway Energy Group, has come back to Peninsula Clean Energy requesting changes to particular PPA terms to reduce the possibility of termination
• While this PPA was executed nearly a year ago, the market has changed considerably since then and the projects’ economics are at risk
16 Peninsula Clean Energy
Procurement Subcommittee
• Staff met with the Board Procurement
Committee on July 21, 2022, to relay the
impacts on our projects and the status of
our negotiations
• Each member of the subcommittee
supported staff’s efforts to negotiate an
amendment to alleviate the risk of the Arica
contract terminating
17 Peninsula Clean Energy
Impacts to PCE
• Staff conducted extensive analysis on the impacts of this A&R PPA to our power supply portfolio and has determined that these 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, Arica will meet our requirements as originally planned
18 Peninsula Clean Energy
Recommendation
Approve Resolution Delegating Authority to
the Chief Executive Officer to Execute an
Amended and Restated Power Purchase
and Sale Agreement (A&R PPA) with Arica
Solar, LLC, and any necessary ancillary
documents.
19 Diversity, Equity, Accessibility
and Inclusion Policy Update
Shayna Barnes
Operations Specialist
September 22, 2022
Peninsula Clean Energy
DEAI Policy Origins
Peninsula Clean Energy CAC Draft Statement
on Equity and Inclusion
1. Peninsula Clean Energy commits to
making anti-racism top of mind during
decision making
2. Develop a means of tracking revenue and
formulating a mechanism (qualitative and
quantitative) that ensures accountability
3. Pursue equity in energy generation and
programs
21 Peninsula Clean Energy
Policy Development and Stakeholder Review
• CAC Equity Statement as foundation for DEAI policy
• Includes themes from needs assessment phase
• Incorporates industry best practices
• Facilitated workshops to receive feedback:
o August 16: Staff
o August 19: Board DEAI Subcommittee
o September 8: CAC, CBOs, broader community
22 Peninsula Clean Energy
Policy Approval- Moved to October
• Policy originally scheduled for
approval at September Board retreat
• Moving to October allows more time
for consultant and internal project
team to incorporate feedback from
workshops into final policy
23 Peninsula Clean Energy
Living our DEAI Values
24 Excerpt from draft DEAI policy
DEAI is of strategic importance to
Peninsula Clean Energy
“Peninsula Clean Energy commits to
making diversity, equity, accessibility,
and inclusion a priority during
decision making.”
2020-2025 Strategic Plan Progress
Annual Update for FY and CY 2022
September 22, 2022
Peninsula Clean Energy
Introduction
26 On target
Challenges exist
At risk
PCE's Strategic Plan was adopted in April 2020; this is our third annual update
More detail in the Board memo; tonight's presentation is focused on functional dashboards, highlight of a few 2022 key accomplishments and 2023 priorities
Updated dashboard color-coding for "quick view"
Peninsula Clean Energy
Introduction
27 A few material changes since last September’s annual update:
1. Moved 100% GHG-free decarbonization target from 2045 to 2035 and narrowed the focus to personal vehicle transportation and small residential/ building electrification
2. Addition of a separate dashboard and discussion section for Account Services, which had previously been embedded within Marketing and Community Relations
3. Updated 2025 targets for Community Energy Programs to reflect current and more realistic market conditions going forward
4. Reorganization of Power Resources objectives
Peninsula Clean Energy
Market / Industry Context
Costs Still High • Costs still higher than pre
-pandemic
• Some material costs have eased • Vehicle costs remain at peak Worker shortages • Construction employment exceeds pre
-
pandemic levels
Building Electrification • Climbing utility costs • Low awareness and motivation 28 Peninsula Clean Energy
Organizational Priorities
29 Key Performance Indicators (Measured on CY)
2019 Baseline 2020 2021 2022* 2025 Target
100% Renewable Energy 24/7 47.0% 47.0% 49.2% 53.6% 100% 2035 Decarbonization (MT
GHG reduced)
3,800 14,300 23,100 26,600 See Below**
On target
Challenges exist
At risk
*Estimated for 2022
**Peninsula Clean Energy has a 2035 decarbonization target only. Total San Mateo County emissions inventoried in 2019 were 4.1 million MT GHG of which 3.2 million MT GHG are in buildings and transportation. Decarbonization figures for each year are the estimated reductions resulting from PCE programs on a cumulative basis through that year.
Peninsula Clean Energy
Power Resources Overview
30 Key Performance Indicators (Measured on CY)
2019
Baseline
2020 2021 2022 YTD 2025 Target
EcoPlus Annual Renewable Content (%) 52% 51.7% 49.2% 53.4% 100% EcoPlus Emissions Factor (lbs. / MWh) 102 13 5 9 16
Eco100 Annual Renewable Content (%) 100% 100% 100% 100% 100% Eco100 Emissions Factor (lbs. / MWh) 0 0 0 0 0
New Peninsula Clean Energy Capacity Statewide
(% of load served by new resources)
0 16% 24% 25% 50%
On target
Challenges exist
At risk
Peninsula Clean Energy
Power Resources: FY 2022 Key Accomplishments
1. Published 24/7 White Paper – Part 1
2. Progressing our 24/7 strategy and finalized model
3. Executed PPAs
o Chaparral & Arica solar + storage
o Gonzaga Ridge Wind
o Geysers Geothermal
o Second Imperial Geothermal (Heber 2)
o Participation in CC Power PPAs
o Tumbleweed long-duration storage
o Fish-lake Geothermal
o Ormat Geothermal Portfolio
31 Peninsula Clean Energy
Power Resources: FY 2023 Key Priorities
1. Publish 24/7 White Paper – Part 2
2. Issue multiple requests for proposals for renewable energy and storage resources
3. Negotiate and execute contracts for 24/7 goal and to meet CPUC Mid-Term Reliability obligation
32 Peninsula Clean Energy
Community Energy Programs Overview
33 Key Performance Indicators (Measured on CY)
2019 Baseline 2020 2021 2022 (6mo) 2025 Target
(revised)
Transportation: GHG Reductions (MT) 2,000 8,200 14,800 17,800 83,000 (was 120,000)
Buildings: GHG Reductions (MT) 1,800 6,100 8,300 8,800 9,800 (was 12,100)
EV charging ports installed (#) 0 13 146 241 3,500
(was 6,200)
Electric appliances installed (#) 0 0 187 297 1,800
(was 2,800)
Local Resources (MW) 0 1.47 4.26 5.54 20
Funds for Low Income 11% 47% 19% 24% 20%
1. All figures cumulative except Funds for Low Income
2. Overall County GHGs when last inventoried in 2019 were 4,100,000 MT
3. GHG measures reflect projected future average annual reductions of actions taken that year (ex:
adopted reach codes, charging installed, EVs acquired, etc.)
4. 2019, 2020, 2021 years updated to reflect additional EV reach code impacts for commercial sites
5. Charging and appliance outpace peer agencies but lower than desired
6. Revised 2025 targets reflect actual trajectory
EV Charging ports in pipeline: over 3,000
Peninsula Clean Energy
Programs: CY 2022 Key Accomplishments
1. EV Charging
o Over 3,000 ports in pipeline, subject to some attrition and addition going forward o Major program updates with increased incentives, increased flexibility for contractor selection, and funds shifted away from non-performing partner
2. Reach Codes
o 16 communities have adopted reach codes
o New model codes for 2022 adoption cycle, including existing building options
3. Local Government Solar
o Completed solicitation, moving into contracting for 2 MW across 15 sites 34 Peninsula Clean Energy
Programs: CY 2023 Key Priorities
1. EV Charging
o Execution on program ramp-up moving EV ports in the pipeline to installations
2. Buildings
o Major updates to program in two phases:
a) increasing incentives and flexibility, adding appliances and Zero Percent Finance (on-bill finance)
b) expanding overall program including "one-stop shop" and turnkey options o Existing building reach codes
3. Distributed Resources
o Installing and expanding local solar + storage projects (Local Government Solar) o Deploying first “virtual power plant” programs (FLEXmarket, EV Managed Charging) 35 Peninsula Clean Energy
Marketing & Community Relations Overview
36 Key Performance Indicators (Measured on FY)
2020 Baseline 2021 2022 2025 Target
Participation Rate (as of FY end)1 97% 97% 97% 97%
PCE Aided Awareness 34% 31%2 39%4 60%
PCE Favorability3 63% 61%2 57%4 80%
Residential & SMB Engagement1 Med/Low Med/Low Med/Low High
1. Shared responsibility with Account Services team
2. Given sample size in 2021, this is statistically equivalent to the 2020 baseline
3. Of those who are aware of Peninsula Clean Energy
4. Statistically different from 2020 baseline
On target
Challenges exist
At risk
Peninsula Clean Energy
Marketing/Outreach: FY 2022 Key Accomplishments
1. Los Banos enrollment – strong participation rate and positive perceptions
2. Electrification awareness program – All-Electric awards, new original content, well-attended webinars, new message development
3. Outreach Grantee program – strong execution against work scopes 37 Peninsula Clean Energy
Marketing/Outreach: FY 2023 Key Priorities
1. Launch of Zero Percent Financing program coupled with expanded electrification rebates
2. Increasing Peninsula Clean Energy aided awareness
3. Electrification campaign
4. Outreach grant program
38 Peninsula Clean Energy
Account Services Overview
39 Key Performance Indicators (Measured on FY)
2020 Baseline 2021 2022 2025 Target
Participation Rate (as of FY end)1 97% 97% 97% 97%
Customer Data Access & Analytics2 Low N/A Low/Med High
External Partner Relations Med/High High High High
Key Account Engagement3 Low Low Med/Low High
Residential & SMB Engagement1 Med/Low Med/Low Med/Low High
1. Shared responsibility with Marketing and Community Relations
2. Launched DataConnect platform for Key Accounts in early 2022
3. Key Account Engagement growth was impacted significantly due to COVID restrictions and uncertainty
On target
Challenges exist
At risk
Peninsula Clean Energy
Account Services: FY 2022 Key Accomplishments
1. Launched Data Connect platform for Strategic Accounts and PCE program partners to streamline access to customer energy data
2. Successful TOU-C transition in September 2021 with over 70% of eligible customers moving to TOU rates
3. CAPP 1.0 application recovering over $1.8M from State COVID relief funds to help offset residential utility debt accrued during COVID shutdowns 40 Peninsula Clean Energy
Account Services: FY 2023 Key Priorities
1. Re-engaging with Strategic Accounts to promote new PCE program opportunities and PCE broader decarbonization goals
2. Expand Data Connect functionality and customer access beyond Strategic Accounts
3. Prepare for eventual NEM 3.0 decision from CPUC and determine how PCE can best support customers under new NEM rules
41 Peninsula Clean Energy
Public Policy Overview
42 Key Performance Indicators (Measured on FY)
2020 Baseline 2021 2022 2025 Target
PCIA Containment Low Low Challenges See Below
Legislative Impact Medium Medium Challenges See Below
Regulatory Impact High High On Target See Below
Coalition Building Low Medium On Target See Below
Fostering CCA Growth Medium Medium On Target/Challenges See Below Regarding 2025 Targets
1) PCIA Containment: PCE staff interprets this goal as an objective to minimize PCIA-related costs applicable to PCE customers by 2025. With that said, PCIA costs applicable to PCE’s customers will remain long past 2025 and are expected to persist into the 2040s. 2) Legislative Impact: PCE staff interprets this goal as having a high level of influence with our local representatives and CalCCA’s legislative efforts, such that our efforts result in overall positive legislative outcomes in Sacramento. 3) Regulatory Impact: PCE staff interprets this goal as taking the steps necessary to enable the organizations programmatic and procurement objectives by 2025. 4) Coalition Building: PCE staff interprets this goal as having strong local, state and regional relationships to leverage our knowledge and influence towards positive outcomes.
5) Fostering CCA Growth: PCE staff recognizes that CCA growth has slowed in recent years. We believe this goal should be revisited.
Peninsula Clean Energy
Public Policy: FY 2022 Key Accomplishments
1. PCIA
o Present PCIA costs are low due to high gas prices
o Continued benchmark reform (e.g. valuation of renewable and greenhouse gas-free) o Diablo Canyon costs to leave PCIA in 2024/25
2. Regulatory
o Continued leadership on Resource Adequacy (RA), Integrated Resources Plan (IRP), and programmatic interests including Transportation and Building electrification.
3. Legislative/Expansion
o Continued impact on legislation of significance (e.g., AB 1814, AB 1944, SB 1158, SB 1203, SB 1287, SB 1393, Budget Priorities)
o Successful enrollment of Los Banos customers and building strong relationships with elected officials and key stakeholders 43 Peninsula Clean Energy
Public Policy: FY 2023 Key Priorities
1. PCIA
o Continued reform of valuation and pursuit of other reductions of costs
2. Regulatory
o Programs – Pursue State/Federal/Ratepayer funding and other opportunities o Procurement – Increase regulatory certainty in RA & IRP for 24/7 objectives
3. Legislative/Expansion
o Nurture new and continuing relationships with legislators and key stakeholders o Furtherance of CCA growth and influence in Merced County 44 Peninsula Clean Energy
Financial Stewardship Overview
45 Key Performance Indicators (Measured on FY)
2020 Baseline 2021 20221 2025 Target
Days Cash On Hand (Unrestricted) 238 257 201 231
Credit Rating (Fitch/Moody) BBB+/Baa2 same BBB+/Baa2 POS single “A” level Change in Net Position ($000s) $48,900 -$8,216 -$12,976 positive Investment Performance (FRB/PFM) 2% -4.4%/-4.7%2 TBD
Average Cost of Energy ($/MWh) $61.92 $59.04 $62.75 $62.73
1. Key Performance Indicator results for FY 2021-2022 are based on un-audited financial results – final results may change slightly with publication of final audited financials.
2. Investment Performance results reported for each portfolio manager's holdings in FY 2021-22 where previous results
On target
Challenges exist
At risk
Peninsula Clean Energy
Finance: FY 2022 Key Accomplishments
1. Positive credit rating action with the assignment of a Positive Outlook on PCE’s credit rating with Moody’s Investors Service
2. Change in Net Position at fiscal year end reflect better than budget performance through prudent financial management despite significant power market volatility
3. The actual average cost of energy in FY 2020-21, based on final audited results, show a better than previously projected performance on average cost of energy
46 Peninsula Clean Energy
Finance: FY 2023 Key Priorities
1. Continue the push to obtain PCE rating upgrades with credit rating agencies
2. Continue prudent and close financial tracking and management of expenditures to ensure the maintenance of a healthy and strong liquidity position 47 Peninsula Clean Energy
Organizational Excellence Overview
48 Key Performance Indicators (Measured on FY)
2020 Baseline 2021 2022 2025 Target
Staff Satisfaction High High On Target See Below
Innovation Impact High High On Target See Below
Technology & Systems High Med-High On Target See Below
Organizational Policies* High High On Target See Below
Governance High High Challenges See Below
*For external vendors and partners
Regarding 2025 Targets
1) Staff Satisfaction: PCE staff interprets this goal based on yearly surveys, assessment of employee satisfaction; evaluation of professional development and training efforts; evaluation of competitive benefits.
2) Innovation Impact: PCE staff interprets this goal as the assessment of the quality of technology, program design, and policy innovation developed by the organization and its impact towards the organization’s goals and the clean energy industry. 3) Technology & Systems: PCE staff interprets this goal as the assessment of quality and completeness of systems to support the organization’s work including for business processes, energy-related analysis, program impact evaluation and customer insights; evaluation of systems and practices that ensure data accuracy/privacy and security. 4) Organizational Policies: PCE staff interprets this goal as the assessment of progress toward implementation of key policies such as the Sustainable Workforce and Ethical Vendor Standards policies.
5) Governance: PCE staff interprets this goal as facilitating the succession process, providing high quality orientation materials, and eliciting broad support of the organization by new Board Members, Alternates, and Citizen Advisory Committee Members; incorporating DEAI policy when completed.
Peninsula Clean Energy
Org Excellence: FY 2022 Key Accomplishments
1. Hired COO, CFO, Board Clerk and Director of HR
2. Conducted DEAI Survey with internal and external stakeholders, started development of DEAI policy and action plan
3. Enhanced the Data Warehouse with analysis models and automations
4. Successfully conducted Board, Committee and CAC meetings virtually, with high attendance
49 Peninsula Clean Energy
Org Excellence: FY 2023 Key Priorities
1. Implement DEAI Policy and Action Plan
2. Strengthen training and professional development opportunities for all staff
3. Strengthen communication and onboarding support for Board Members and Alternates
50 Update and Discussion on 100%
Renewable on 24/7 Basis by 2025
September 22, 2022
Peninsula Clean Energy
Presentation Outline
• Introduction and Recommendation
• Background
• Modeling Approach
• Results
o Portfolios for 24/7 Renewable Energy
o Cost of 24/7 Renewable Energy
o Emission and Grid Impacts of 24/7 Renewable Energy
• Challenges and Risks
• Summary and Recommendation
52 Introduction and
Recommendation
Peninsula Clean Energy
Strategic Plan
54 ORGANIZATIONAL PRIORITIES:
By 2025, deliver 100% renewable
energy each and every hour of day.*
Contribute to our community reaching a
goal of 100% greenhouse gas-free in
buildings and transportation by 2035.
Peninsula Clean Energy
Terminology
• Throughout this presentation, we will use the terms "24x7", "Time-coincident", and "Hourly" interchangeably to refer to our goal.
55 Peninsula Clean Energy
Why do we have this goal?
• Peninsula Clean Energy currently delivers to all of our customers electricity that is 100% from GHG-free or renewable resources on an annual basis o We have built a financially strong organization at the same time as providing cleaner energy at a 5% savings compared to PG&E
• Our goal is to match our electricity supply to consumer load on an hourly basis o We will not be relying on system power (methane gas plants) and can maximally reduce GHG emissions from our electricity supply
• Peninsula Clean Energy wants to take the lead to show it’s possible to provide hourly renewable energy in a cost-effective way
56 Peninsula Clean Energy
Progress to Date
2016
- Peninsula Clean Energy sets
100% renewable goal
2017
- Peninsula Clean Energy sets
24/7 100% renewable goal
2018-2019
- Procure resources and conduct
preliminary analysis
2020
- Begin development of 24/7
planning model
- Get preliminary modeling results
refine model
2021
- Publish White Paper, Part I
- Finalize model development and
analyze results
- Board Retreat and Subcommittee
Updates
- Convene external advisory group
2022
- Meet with 24x7 Subcommittee
- Finalize modeling work
- Developing Part II of the White Paper
57 Peninsula Clean Energy
Recommendation
• Target 99% time-coincident renewable energy on a planning forecast basis
o 100% time-coincident target will be less cost-effective o 99% target will maximize benefits to our customers in a cost-effective way 58 Background
Peninsula Clean Energy
Peninsula Clean Energy currently supplies energy from 100% Carbon Free or Renewable resources on a total annual basis • We currently purchase enough
renewable and carbon-free supplies
to meet customer demand in the
same year
• This annual framework:
o Is the current industry standard
o Does not show whether supply and
demand matched on an hourly basis
60 Peninsula Clean Energy
2021 Peninsula Clean Energy 24/7 Emissions Footprint
due to use of California grid energy
Hour of
Day
12am
6am
12pm
6pm
11:59pm
Day of Year
Jan 1 Apr 1 Jun 1 Oct 1 Dec 1
Color Scale: lbs CO2 / MWh of Carbon Emissions
61 Peninsula Clean Energy
Annual accounting vs 24/7 accounting
2021 24/7
Emissions
Footprint
2021 Annual
Emissions
Footprint
Averag
e
210
lbs/MWh
5 lbs/MWh
Minimu
m
0 lbs/MWh
N/A
Maxim
um
987 lbs/MW
h
N/A
• The two frameworks result in different calculated emissions footprints • The 24/7 accounting approach is needed to understand how to reduce emissions from the California grid during every hour of the year • Reflects our use of
California grid
energy
• Does not credit
oversupply
• Reflective of
recently adopted SB
1158 (Becker)
• Current reporting
standard
• Gives credit for
oversupply in
some hours
• Reflective of
current Power
Content Label
reporting rules
62 Peninsula Clean Energy
Phasing our time-coincident renewable goal
Phase 1
(by 2025)
• Use Planning Forecasts
• Target time-coincident renewable energy using
planning forecasts
Phase 2
(beyond 2025)
• Use Real-Time Data
• Continue to evaluate the cost/benefit of delivering
time-coincident renewable energy in real-time
63 Peninsula Clean Energy
Questions?
64 Modeling Approach
Peninsula Clean Energy
24/7 Objective
Used the "MATCH Model" to identify the least-cost portfolio of renewable generation and storage resources that can meet our load in every hour, considering factors such as available resources and associated costs
66 Peninsula Clean Energy
Types of Modeling
• Deterministic
o Assumes a single set of assumptions, and determines a single outcome o Can be fast and streamlined, and therefore good for optimization modeling o Doesn’t provide insight into range of likely of outcomes • Stochastic
o Runs many simulations with varied inputs
o Provides estimates on the range of likely outcomes – can evaluate risks and probabilities o More computationally intensive (slower), and therefore challenging to do iterative optimization 67 Peninsula Clean Energy
Modeling Approach
68 Scenario Design
MATCH model
(Deterministic
Portfolio Planning)
Analyze results
PowerSimm model
(Stochastic
Portfolio Analysis)
Analyze results
Final
Recommendation
Peninsula Clean Energy
Resources considered for our 24/7 Goal
• Resources considered:
o Solar PV
o Hybrid Solar + Storage
o Energy Storage
o Onshore Wind
o Geothermal
o Small hydro
o Emerging technologies (Offshore Wind, Solar Thermal, Ocean Wave) • Not considered: Large Hydro and Nuclear
o Not considered renewable under California RPS
o No new (additional) capacity available
o We cannot schedule these resources
69 Peninsula Clean Energy
Renewable Goal Scenarios
Scenario
Name
Note
Existing
Portfolio
Represents current budget. Assumes use
of Index-Plus RECs to cover the difference
between annual load MWhs and contracted
renewable MWhs.
100% Annual Match annual load with an equal amount of
contracted renewable energy.
100% Hourly Match 100% of load in all hours with
contracted renewable energy
99% Hourly Match 99% of load in all hours with contracted renewable energy
95% Hourly Match 95% of load in all hours with contracted renewable 70 Time-coincident
Scenarios*
* All Time-coincident hourly scenarios achieve the 100% Annual Renewable Goal Peninsula Clean Energy
Market Sensitivity Scenarios
71 Scenario Notes
Optimistic Case
• Based on late 2021 market conditions
Conservative Case
• Based on mid-2022 market conditions
(incorporating market disruptions such as
supply chain issues, the war in Ukraine, and
potential solar tariffs)
Peninsula Clean Energy
Questions?
72 Results: Portfolios for 24/7
Renewable Energy
Peninsula Clean Energy
Current Portfolio
74 • All model scenarios
assumed our base existing
portfolio of executed
contracts
• In the results that follow,
we show the incremental
capacity that we need to
add to meet our time-
coincident goal
Total Capacity
1033
MW
Total Capacity
1033 MW Standalone
Storage
14 Peninsula Clean Energy
New Capacity Required to Add to our Portfolio
• New capacity required
to be added to our
portfolio generally
increases as time-coincident target
increases.
• More firm resources are
needed at higher time-coincident targets.
75 Conservative Scenario
Peninsula Clean Energy
Excess Generation
Scenario Annual Volumetric %*
Existing Portfolio 85%
100% Annual 102%
90% Hourly 114%
95% Hourly 126%
99% Hourly 146%
100% Hourly 180%
76 • Time-coincident matching results in
procuring more energy than load on
an annual basis
• Values above 100% show over-procurement. For example, in the 99% Hourly scenario, we observed
46% over-procurement.
*Annual Volumetric % = Total Annual
Renewable Generation divided by Total Annual
Load
Peninsula Clean Energy
Questions?
77 Results: Cost of 24/7
Renewable Energy
Peninsula Clean Energy
Assumptions around Cost of Energy
• Our cost of energy results are dependent on whether we can resell excess RA and/or RECs
o In the short-term, we expect to be able to resell most excess RA and RECs o In the long-term, there is uncertainty around ability to resell o We will continually procure resources as renewable energy contracts expire and our load grows, and we will be able to re-assess our portfolio with each year's procurement 79 Variation Notes
Cost of Energy, No
Resale
Cost of Energy without reselling of any excess
RA/RECs
Cost of Energy, With
Resale
Cost of Energy with full (100%) resale of all
excess RA/RECs
Expected Cost of
Variations of Model Results
Peninsula Clean Energy
Cost of Time-Coincident Procurement
80 • Based on the Conservative Case results, time-coincident renewable energy procurement up to 99% can be achieved with only 2% cost increase Scenario Difference in Expected Cost of Energy*
relative to Existing Portfolio (%)
Existing Portfolio 0%
100% Annual -1%
90% Hourly 0%
95% Hourly 1%
99% Hourly 2%
100% Hourly 12%
*Deterministic Results
Peninsula Clean Energy
Market Sensitivity Analysis
81 • Our Optimistic Case showed lower
cost of time-coincident procurement
o 99% time-coincident goal can
be achieved at a 1% cost
decrease compared to our existing
portfolio
• The recent passage of the
Inflation Reduction Act may allow
the market to return to late
2021 conditions, which would
decrease the cost
Cost of Energy Relative to Existing Portfolio, Conservative Case *Deterministic Results
Peninsula Clean Energy
Interpreting Stochastic Results with a Box-Plot
• Our stochastic analysis includes
50 simulations.
• We often use box-plots to show
results of our stochastic analysis
82 (75th Percentile)
(50th Percentile)
(25th Percentile)
Peninsula Clean Energy
Existin g Portfolio 100% An n u al 90% Hou rly 95% Hou rly 99% Hou rly 100% Hou rly 90%
100%
110%
120%
130%
140%
150%
with Resale
no Resale
Cost of Ene rgy
Cost of Energy: Range of Likely Outcomes
83 • While we have a forecast
for our expected cost of
energy, there’s a range of
likely outcomes.
• Range of likely outcomes
can be attributed to the
risk around market prices
and ability to resell
excess RA/RECs.
Cost of Energy Relative to Existing Portfolio, no Resale (Conservative Case) Peninsula Clean Energy
11.8%
8.2%
6.8%
6.5%
6.0%
7.1%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
Risk
Risk Premium
84 • Risk Premium* is a measure of
the potential for cost increase in
the worst-case scenario
• The 99% scenario has the lowest
risk premium.
*Risk Premium is defined as the cost
difference between the median
(50th percentile) simulation cost and the
95th percentile simulation cost. Here, we
express it as a percentage of average
simulation cost.
Conservative Case
Risk Premium as a Percent of Average Cost of Energy
Peninsula Clean Energy
Questions?
85 • How does the Board view the
potential for a 2% cost increase
in the Conservative Case if we
pursue the 99% Hourly goal?
Results: Emission and Grid Impacts
of 24/7 Renewable Energy
Peninsula Clean Energy
• Increasing our time- coincident target will reduce
our hourly carbon footprint
* The hourly carbon footprint
accounts for our use of grid
energy in some hours, and
does not give us "credit" for
supplying excess energy in
other hours
** This method is anticipated to
be similar to the method
adopted in SB 1158 (Becker)
Emissions Reductions: Hourly Carbon Footprint
87 Hourly Carbon Footprint:
Our share of grid emissions on an hourly basis.
Results are specific to Peninsula Clean Energy
Peninsula Clean Energy
• Increasing our time-coincident target
displaces more
emissions
Emissions Reductions: Avoided Emissions
88 Avoided Emissions:
Grid emissions displaced by our portfolio in the long run.
Results show benefits to the entire grid
Peninsula Clean Energy
Effects on Grid: System Net Peak
• Our portfolios reduce the
net peak, which improves
the entire grid system
operations
89 Peninsula Clean Energy
70 75
80 85
90 95
100
Sim u lation s
Plan n ed
% Tim e -coincide nt
90 • In real-time
operations, the
portfolios fall short of
the time-coincident
target by 1% to 3%,
due to variability in
load and generation.
Real-Time Operations: Time-coincident performance
Real-time time-coincident performance
Peninsula Clean Energy
Questions?
91 • Is 96% to 98% an acceptable real-time
performance of our time-coincident
portfolio?
Challenges and Risks
Peninsula Clean Energy
Challenges and Risks
• Uncertainty surrounding the ability to resell RECs and RA • Sensitivity to market conditions
• Ability to contract for resources
o Will we be able to find cost-effective resources according to our planning? o Will we need to accept unfavorable contract terms in order to secure the contracts in the current Seller's market?
• Regulatory uncertainty
o Will new Resource Adequacy or Integrated Resource Planning requirements inhibit our ability to build the optimal portfolio?
• There's no official tracking system or accounting framework to communicate the value of a 24/7 approach
o SB 1158 (Becker) will help to develop such accounting frameworks and could incentivize tracking systems to develop
93 Summary and
Recommendation
Peninsula Clean Energy
Summary
• Time-coincident renewable procurement can be cost-effective under a variety of market conditions
o Based on the Optimistic Case, 99% time-coincident can decrease our cost by 1% (on average) compared to our existing portfolio
o Based on the Conservative Case, 99% time-coincident would increase our cost by 2% (on average) compared to our existing portfolio
• Procuring time-coincident renewable energy results in benefits to society by reducing emissions and improving grid impacts
95 Peninsula Clean Energy
Recommendation
• Target 99% time-coincident renewable energy on a planning forecast basis
o 100% time-coincident target will be less cost-effective o 99% target will maximize benefits to our customers in a cost-effective way 96 Peninsula Clean Energy
Next Steps
• Continue working on the White Paper Part 2
• Continue to evaluate and procure short-, medium-, and long-term resources
• Continue to evaluate cost-effectiveness based on market conditions 97 Peninsula Clean Energy
Thank you!
A sustainable world with clean energy
for everyone.
98 September 22, 2022
2035 Decarbonization
Feasibility & Plan
Peninsula Clean Energy
Agenda
1. Recap: Schedule, Scope, Analysis
2. Scaling & Partnerships
3. Financial Strategy
4. Program Concepts
5. Policy Needs
6. Next Steps
| 100
Peninsula Clean Energy
Strategic Plan
101
ORGANIZATIONAL PRIORITIES:
By 2025, deliver 100% renewable
energy each and every hour of day.
Contribute to our community reaching a
goal of 100% greenhouse gas-free by
2035.
Contribute to our community reaching a
goal of 100% greenhouse gas-free in
buildings and transportation by 2035
Peninsula Clean Energy
Board and Advisory Committees
Board Sub-committee
Rick DeGolia
Jeff Aalfs
Dave Pine
Laura Parmer-Lohan
102
Advisory Committee
Jeff Aalfs Board of Directors, Peninsula Clean Energy
Diane Bailey Executive Director, Menlo Spark
Jeff Byron Former CEC Commissioner
Andrea Chow Sustainability Analyst, City of San Mateo
Pierre Del Forge Clean Buildings Director, NRDC
Cisco Devries CEO, OhmConnect
Adrienne Etherton Sustainability Manager, City of Brisbane Laura Feinstein Sustainability Policy Director, SPUR
Zach Franklin Chief Strategy Officer, GRID Alternatives Matt Golden CEO, Recurve
Ortensia Lopez Executive Director, El Concilio
Loren McDonald EV Industry Analyst, EVAdoption.com
Joshua Pierce EVP, Richard Heath and Associates
Mary Anne Piette Division Director, Lawrence Berkeley National Lab James Russell Energy Transition Director, CLEAResult
Nancy Ryan Former CPUC Commissioner
Justin Zuganis Director of Decarbonization, SVCE
Peninsula Clean Energy
Board and Advisory Comments
Over 120 comments and questions received. Key comments include:
1. Pursue rate design to create economic value in building electrification
2. Develop a “one-stop-shop” support for customers
3. Partner with providers for point-of-sale finance
4. Leverage load shaping across all appliances
5. Facilitate energy efficiency to create electric panel “headroom”
6. Promote resiliency to help with confidence in grid/electrification
7. Explore financing or leases for used cars
103
Recap
Schedule, Scope, Analysis Conclusions
104
Peninsula Clean Energy
Project Schedule
• Dec. ‘21: Scheduling and Scope
• Q1/Q2: Market Conditions
• Q2: Segments, Costs and Financing Options
• Q3: Financial Strategy, Policy, Programs, Scaling
• Q4: Final refinements (and Marketing, Metrics, Roadmap) Board Retreat
PCE Plan
• How much capital is needed?
• What funds are available?
• What policies are needed?
• How much can be done?
Peninsula Clean Energy
Transportation
(Not-in-Scope)
13%
Transportation
(In-Scope)
41%
Building Methane
(In-Scope)
24%
Building Methane
(Not-in-Scope)
7% Electricity (Non-PCE)…
Water
0%
Wastewater
0%
Solid Waste
8%
Stationary
Sources
5%
San Mateo Countywide Greenhouse Gas
Emissions,
PCE 2035 Plan Scope
• Primary Scope
o Transportation
o private passenger, local gov & small commercial fleets, o ride-hailing, alternative mobility
o Buildings
o "small" residential (single family & small multifamily), o office, small commercial
• Not in scope, or limited* (others to lead)
o Transportation: heavy-duty vehicles, off-road
o Buildings: industrial, large commercial*, large multifamily* o Non-energy: land-use, compost, stationary sources, landfills, embodied carbon o Adaptation, restoration
106
Note: Current analysis is based on SMC data; Los Banos data to be included as it becomes available
Peninsula Clean Energy
Transportation: EV Growth for New Vehicle Sales
107
-
100,000
200,000
300,000
400,000
500,000
600,000
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Annual Sales, Columns
Gas Cars at Year Start
“Business-as-usual” EV and Gas Vehicle Sales & Gas Vehicle Retirements Net New EVs
from New Sales
Annual Gas
Sales, New
Total Personal
Gas Cars
Population at
Year End
Annual EV
Sales, New
Peninsula Clean Energy
Current EV Charging Distribution
108
* data quality is poor for workplace charging and
multifamily so counts may be higher
** California Energy Commission adapted estimate
~4600
Charging stations
currently in SMC
• Min. need to support all-electric fleet, ~70k chargers (CEC**)
• Major need in multi-family
housing
• 80% of EV charging happens
at home
Workplace
36%
Car Dealers
2%
Retail
16%
Hotels
11%
Parking Garages
9%
Hospital
5%
School
3%
All Others
10%
Multi-family
2%
Fast Charging
6%
EV Chargers by Type and Site
~4600
charging stations currently
in San Mateo County*
Peninsula Clean Energy
PCE Analysis: Transportation Conclusions
• Young fleet: Our vehicles are younger than national average (our new vehicle segment is 2x national average) and appear to turn over faster • Vehicle age and EV adoption correlate with income: EV adoption and vehicle age and are highly correlated income (areas where average car age is 10+ years old have avg. income of <$100k, very low income) • Charging at multi-family: Virtually none exist currently, reach codes help but substantial gap remains affecting ~28% of population, mostly renters, many low income. Overall cost gap for all EV charging ~$400M. • Limited supply and slow turnover: New gas car sales will likely end before 2035 but used cars will electrify slowly; likely supply constrained 109
Peninsula Clean Energy
Impact of Utility Rates
• Residential rates in PG&E
territory are very high
• Effectively eliminates economic
benefit of electrification
• PCIA is ~$11/year
• Load shape 3% reduction
• Unless rate structures shift
$222
$76
$232
$232
PG&E TOU-C
SMUD Resi Fixed Rate
Annual Water Heating Operating Cost by Utility and
Rate (2022 rates)
HPWH electric cost per year Gas WH cost per Year
PG&E Trans & Dist
$147
PCE Gen
$64 $27
Non-bypassable charges
including PCIA
PG&E Residential
Rate (TOU-C)
Sacramento (SMUD)
Residential Rate
Peninsula Clean Energy
Overarching income distribution – SM County
Moderate Income
80% - 200% AMI
Upper Income
200% - 300% AMI
Very High Income
Over 300% AMI
49% 36% 8% 7%
0 2,000
4,000
6,000
8,000
10,000
12,000
14,000
- $50k $100k $150k $200k $250k $300k $350k $400k $450k $500k $550k $600k $650k $700k $750k $800k $850k $900k $950k $1,000k Household Income
MF Rented
MF Owned with Mortgage
MF Owned Outright
SF Rented
SF Owned with Mortgage
SF Owned Outright
Multifamily units are shown for
scale, but are not included in
Scope of 2035 Analysis
Source: US Census – American Community Survey
Note: Low-income categories likely include homeowners with significant assets that are not normally considered “low-income” 111
Low Income
Under 80% AMI*
*AMI=Area Median Income
Peninsula Clean Energy
Small residential income distribution – SM County
Moderate Income
80% - 200% AMI
Low Income
Under 80% AMI
Upper Income
200% - 300% AMI
Very High Income
Over 300% AMI
41% 37% 11% 11%
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
- $50k $100k $150k $200k $250k $300k $350k $400k $450k $500k $550k $600k $650k $700k $750k $800k $850k $900k $950k $1,000k Number of Households
Household Income by Tenure
Owned Free and Clear Owned with Mortgage Rented
Note: Low-income categories likely include homeowners with significant assets that are not normally considered “low-income” 112 *AMI=Area Median Income
Peninsula Clean Energy
Special Challenge: Very Low-Income – SM County
Very Low Income
Under 50% AMI 23% of small residential are owner-occupied, very low-income homes 15% of all residential are owner-occupied, very low-income homes -
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
- $50k $100k $150k $200k $250k $300k $350k $400k $450k $500k $550k $600k $650k $700k $750k $800k $850k $900k $950k $1,000k Number of Households
Household Income by Tenure
Owned Free and Clear Owned with Mortgage Rented
Note: Low-income categories likely include homeowners with significant assets that are not normally considered “low-income” 113 *AMI=Area Median Income
Peninsula Clean Energy
PCE Analysis: Buildings Conclusions
• Older, small-residential dominant: Small residential represents most of the building stock (>70%), and methane gas equipment predominates for space and water heating. Space heating is most expensive (~$20k).
• Total Capital Required: Estimated ~$3.6-4B needed to electrify single-family and small multifamily. • Economics improve with increasing gas rates, forthcoming technologies, manufacturing scale but not enough to drive market.
• High electric rates are major obstacle producing poor economics for electrification. • Potential CARB and AQMD policies implemented in 2027-2031 would have enormous impact. • Low-income segment challenge: High percentage of small residential units (~20%) owned by very low-income residents creates a challenge to self-fund electrification. 114
Peninsula Clean Energy
2035 PCE Decarb Plan - Feasibility Conclusions
• In Sept 2021, PCE Board asked that staff study the feasibility of 100% GHG reduction by 2035 for transportation and buildings in PCE's service territory • Given current market conditions, funding and financing availability, current rate structures and policy status, achieving 100% GHG reduction by 2035 in PCE's service territory is infeasible.
• What PCE can achieve:
o Private Vehicles: ~50-60% vehicles electrified, ~70-80% EV port need (not DCFC) o Small Residential: ~25-35% homes electrified
o Assuming stable external funds, aggressive finance, and modest PCE budget growth o All resources must be leveraged (incentives, DR value, finance, etc.) o Assuming no rate reform (identified as a major policy need) 115
Scaling & Partnerships
We're Not In This Alone
116
Peninsula Clean Energy | 117
Lowers
Costs
Increased
Manufacturing
Increase
Demand
Lowers
Costs
Increased
Manufacturing
Increase
Demand
Lowers
Costs
Increased
Manufacturing
Increase
Demand
Market Transformation: Generating Scale
Policy
Intervention
Policy
Intervention
Peninsula Clean Energy
Acting with Others
118
Local
Governments
State &
AQMD
Capital
Providers
Private
Companies
CCAs
Local codes
& policies
Policies &
Incentives
Financial
Tools
Products &
Services
Best Practices
& Partnerships
Next Up:
Capital Providers
Peninsula Clean Energy
Objectives
• Policy advocacy
• State and Federal funding
• Communications
• Standardized metrics & timelines
• Sharing analysis and equity strategy
• Coordinated implementation
Intentional coalition of three main countywide Board organizations towards carbon neutrality 119
SMC Carbon Neutrality Action Plan
Peninsula Clean Energy
Replication
| 120
• Develop Methods & Partners
• Technology & Technical method, Financial tools, Program models • Policies
• Partnerships
• Foster Early Market
• Generate early volume to establish initial market
• Foster manufacturer and supply chain pipeline
• Workforce
• Replicate
• Push policies and methods to peers, practitioners, and state Peninsula Clean Energy
Replication: Initial Successes
• Building Codes
o Local codes: 16 local adopters
o State codes: Single-family electrification, multi-family EV ready with power mgmt., low-power o Replicated: SVCE, EBCE, Clean Power Alliance, San Luis Obispo • EV Charging methods
o Power Management/Level 1: Adopted by CEC, PG&E, AQMD, SVCE, MCE o Advance design and technical assistance: CLEAResult with SVCE, EBCE, Palo Alto • Other Programs
o Government Solar: EBCE, CalChoice, Prime
o Portable batteries (MCE)
o Residential solar + storage (SVCE, EBCE)
o Ebikes (SCP)
o Fleets (SVCE, 3CE)
o On-Bill Finance (SCP)
o New EV Dealer Incentive (SCP)
o Low Income Turnkey (EBCE)
o Heat Pump Water Heaters (CPSF, EBCE, MCE, SCP, SVCE)
121
Peninsula Clean Energy
Key Questions
• Are there particular partnerships we should explore?
• Are there other agencies that can provide assistance? 122
Financial Strategy
123
Peninsula Clean Energy
Questions Financial Strategy aims to answer
• How much does the plan do: GHG, # EVs, chargers, buildings • With what resources: $ from all sources
• How much we can capture: Other value streams
• What is the role of policy: Local, regional, state
• What are the limits: State/Fed funds, finance, PCE budget • What is the gap: GHG & financial gap
124
Peninsula Clean Energy
PCE Financial Strategy – Key Principles
1. Leverage market forces, innovation and policy support for cost-effective GHG reduction measures
2. Provide higher incentives early, better than cost parity where possible, then reduce incentives as market matures and costs decline
3. Offer more support to those with less capacity to bear costs
4. Mobilize traditional and innovative finance solutions for scale
5. Where practical, leverage other/existing programs and fill gaps
6. Target and fund programs to enable key policy adoption for required action and market transformation
125
Peninsula Clean Energy
Modeling Assumptions (as of Aug. 2022)
Assumption Basis/Notes
Model is in constant dollars (no inflation)
Costs are estimated on 2021 costs
Service territory: San Mateo County Los Banos data will be integrated at later date Assumed external Building electrification (BE) funding:
$27-33M/year
Assumes TECH and CEC budgets are continually
funded at initial/current levels. Assumes IRA and tax
credits are renewed once and extend to 2035.
Assumed external Transportation electrification
(TE) funding: $8-10M/year
Approved CEC budget continued, expected CPUC
TEF funding, & Federal for EVs & multi-family (MUD)
Existing building reach codes adopted over 10 yrs
with increasing efficacy over time
Some cities beginning to consider adoption, increasing
stringency over time. Policies drive adoption.
PCE investment grows moderately: 3.5 to 5%
annual program budget growth beyond FY22-FY26
forecasted baseline; 80% for decarbonization
Current conditions for budget growth are favorable
Additional value streams to be captured, ex: demand
response (DR): estimated at $4-5M/year
Majority DR value from res. EV load shaping. Assumes
10% EV participation. Buildings provide modest load
shaping potential (excl. storage, TBD) 126
Peninsula Clean Energy
Cost of home upgrade (current)
127
Electrification Cost Gas Equipment Cost
Water Heating (includes 240V circuit) $6,100 $2,000
Space Heating $20,700 $6,132
Cooking $1,098 $1,155
Clothes Drying $925 $925
Total $28,823 $9,057
Panel, if required $3,700
Total non-optimized cost $32,523
The most common single-family home in SM County has:
• Gas water heating, tank-type
• Gas space heating, without air conditioning
• Gas cooktop
• Electric drying
The cost to electrify will be $28,000, an increased cost to the homeowner of $18,600 versus typical gas replacement costs.
Peninsula Clean Energy
12.8k 12.5k 11.9k 11.7k 11.1k 10.5k
9.0k
4.4k 4.2k 3.0k 3.0k 3.0k
0.6k 0.9k 1.5k 1.7k 2.3k 2.8k
4.4k
8.9k 9.2k 10.4k 10.4k 10.4k
0.0k
50.0k
100.0k
150.0k
200.0k
250.0k
0.0k
2.0k
4.0k
6.0k
8.0k
10.0k
12.0k
14.0k
16.0k
2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Gas Home-equivalents at Year Start
(Line)
Annual ”Home-equivalent”
Replacements (columns)
Expected ”Home-equivalent” Electrification and Gas Replacements per Year & Remaining Electrified
"Homes"
Gas Reinvested
"Homes"
Remaining Gas
"Homes"
Existing Buildings: Electrification
128
Reach Codes Drive Adoption
Increasing # cities & stringency
Peninsula Clean Energy
12.8k 12.5k 11.9k 11.7k 11.1k 10.5k
9.0k
4.4k 4.2k 3.0k 3.0k 3.0k
0.6k 0.9k 1.5k 1.7k 2.3k 2.8k
4.4k
8.9k 9.2k 10.4k 10.4k 10.4k
0.0k
50.0k
100.0k
150.0k
200.0k
250.0k
0.0k
2.0k
4.0k
6.0k
8.0k
10.0k
12.0k
14.0k
16.0k
2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Gas Home-equivalents at Year Start
(Line)
Annual ”Home-equivalent”
Replacements (columns)
Expected ”Home-equivalent” Electrification and Gas Replacements per Year & Remaining Electrified
"Homes"
Gas Reinvested
"Homes"
Remaining Gas
"Homes"
Existing Buildings: Electrification
129
Reach Codes Drive Adoption AQMD & CARB Policy Increases Adoption Peninsula Clean Energy
0.0k
50.0k
100.0k
150.0k
200.0k
250.0k
0.0k
2.0k
4.0k
6.0k
8.0k
10.0k
12.0k
14.0k
16.0k
2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Gas Home-equivalents at Year Start
(Line)
Annual ”Home-equivalent” Replacements
(columns)
Expected “Home-equivalent” Electrification and Gas Replacements per Year & Remaining Electrified
"Homes"
Gas
Reinvested
"Homes"
Remaining Gas
"Homes"
Existing Buildings: Electrification
130
Peninsula Clean Energy
1 Small Residential – Projected Available Resources 2024-2035 Financial Summary, Buildings (sm resi)
131
PCE Low-Income Project Finance
$40 – 50M
~25-35%
electrified
Customer Spend
$600 – 700M
State & Federal
$300 – 400M
PCE Incentives
$160 – 200M
$1.1-1.3B
Total Need
• 200,000 small residential in
San Mateo County
• Est. optimized cost ~$20k/ea.
Projected Resources
• Through 2035: $1-1.3 billion
Peninsula Clean Energy
Financial Strategy: Transportation (EV Charging)
~75-90%
EV charging
need
EV Charging – Projected Available Resources 2024 - 2035 Customer Spend
$55 – 70M
Low Carbon Fuel
Standard credits (LCFS)
$10 - $12M
State & Federal
$27 - $33M
PCE Investment
$22 - $28M
132
Load Shaping
$14 - $18M
Total Need
• ~67k EV chargers (not incl. single
family homes or fast charging,)
• Cost per EV Charger: ~$6k
Projected Resources
• Through 2035: $130 - $160 M
• 75-90% EV charging need (not
incl. fast charging)
Peninsula Clean Energy
Financial Strategy: Transportation (Vehicles)
17% of low-income residents
getting EV or
bikes
Customer Spend
$650 – 700M
EVs – Projected Available Resources 2024 - 2035
Load Shaping
$34- $38M
State & Federal
$75 - $85M
PCE Investment
$22 - $28M
Total Need
• ~600k personal vehicles, 60%
electrified in 2035
• Cost to electrify:
o E-bike: $1,000 - $2,000
o Used EV: $25k - $30k
Projected Resources
• Through 2035: $715 - $875 M
Program ensures low-income access to
EVs, not net new EVs in market
133
Peninsula Clean Energy
Risks/Uncertainties
1. State and Federal funding is not renewed or not fully accessible
2. Cities and agencies do not adopt codes/regulations
3. Programs are not able to coordinate to achieve scale
4. Programs are unsuccessful in delivering cost reductions
5. Supply chains do not scale to meet demand
6. Additional value streams are not realized (DR, LCFS)
7. Interest rates make consumer finance too expensive
8. Capital for aggregate project finance cannot be secured 134
Peninsula Clean Energy
Key Questions
• Are the Financial Strategy Principles the right ones? • Are there other resources to consider?
• Is the rate of local, regional and state policy adoption plausible?
135
Program Concepts
Building on PCE's Strong Program
Foundation
136
Peninsula Clean Energy
Decarbonization Programs
1. Building Electrification
o Flexible incentives
o High touch support
o Links to finance
2. Reach Codes & Other Local
Policies
o Continue new construction
o Support existing buildings
o Ensure programs support policies
137
3. Transportation Electrification
o Vehicle Incentives
o EV Charging (esp. MUD)
o Fleets & Alternative Mobility
4. PCE as Conduit to Capital
o On-Bill Finance
o Information Conduit & Credit
Enhancements
o Project Finance
Peninsula Clean Energy
Buildings Electrification
1. Flexible Incentives
o All measures, incl. prewiring and panels
o Broader building segments
o Integrated load shaping & solar+storage
options
2. High touch support
o Advanced “right-sizing” design
o One-stop shop, hotline assist, turnkey option
o Procurement aggregation to lower costs
o Greater contractor support
3. Links to Finance
o Specific linkages by customer segment
138
Peninsula Clean Energy
Reach Codes and Other Local Policies
1. Continue to Support New Construction
o Re-adopt and increase jurisdictions
o Remove exemptions and expand building types
o Progressive increase in EV charging capacity as
needed
2. Support Existing Building Policy
o Adopt no-cost and low-cost measures first
o Adopt new measures as programs and funding
become available
o Increase city count over time
3. Build Programs to Support Policy
o To support local reach code adoption
o To support BAAQMD goals
o Work with state and federal agencies to leverage
funding streams
139
Peninsula Clean Energy
Transportation Electrification
1. Vehicle Incentives
o Low income used EV incentives with tech. assistance
o Integrated load shaping
2. EV Charging
o Technical assistance and incentives for multi-family and public agency parking, “right-sizing” design
o Incentives in other market segments taper over time
o Integration with SFH whole-home solutions (and V2H
resiliency as appropriate)
o Contractor training for grid & load mgmt. solutions
3. Fleets & Alternative Mobility
o Local government and small commercial fleet incentives and technical assistance
o E-bikes and, until state EV requirements come into
effect, ride-hailing
140
Peninsula Clean Energy
PCE as Conduit to Capital
1. On-bill finance (OBF) from PCE
o Limited scale 0% interest credit for any customer
o Could expand to include third-party capital
2. Provide customer information on third-party finance
o Guidance on consumer credit, including point of sale
3. Advocate for state credit enhancements
o Foster credit enhancements to lower credit cost
4. Aggregate residential project finance (under study)
o Adapted from Government Solar
o Target lowest income customers without capacity for debt or added cost
o PCE fully funds installations using external capital, repays capital under long term plan
o Customers assume no debt or added expense
141
Peninsula Clean Energy
Key Questions
• Do we have the right mix of programs?
•Are there missing program features?
142
Policy Needs
Regional and State
Peninsula Clean Energy
Key Regional and State Policies
Category Objective Target
Overall Influence rates to improve economics Lowering T&D rates incl. exploring:
• Marginal rates for incremental electrification load
Buildings Phase out gas appliances Local code requirements (new & existing) State code requirements (new & existing)
AQMD NG standard
CARB ban on NG appliances
Ensure availability of scaled finance Capitalization of statewide low-cost finance facility Tariff On-Bill
Improve economics State incentive support (continue & expand) Transportation Phase out of gas vehicles New gas car ban by 2035 CARB (-done-) Model credits - Increased EV model availability, esp. low-cost models Used EV incentive program (done)
Used car buybacks, early retirements
Improve economics State incentive support (continue & expand) Charging access State/local codes (new & existing)
Increased state support (all charging)
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Peninsula Clean Energy
Additional Regional and State Policies
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Category Objective Target
Workforce Increase trained workforce Increase diversity and underserved community training for building and transportation electrification
Transition legacy sectors Support retraining programs
Grid Grid readiness Resiliency for electric-only homes, vehicle-to-building power (V2B) Distribution interconnection timelines
Behind-the-meter (BTM) resources compensation, load shaping, dispatchability Gas System Reduce investment in gas infrastructure
Gas legacy cost management
Limit expansion and minimize continued investment
Shift capital from gas grid to electric grid
Oppose gas cost-shift to electric ratepayers
Oppose enhancements & requirements, esp ratepayer funding Next Steps
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Peninsula Clean Energy
Next Steps
1. Refine plan based on Board feedback
2. Develop final elements of plan including:
o Program roadmap
o Marketing plan
o Partners
o Metrics
o Policy platform
3. Return to the Board in Q1 2023
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Board Members’ Reports (Discussion)
September 22, 2022
Adjournment
Peninsula Clean Energy