Peninsula Clean Energy
Board of Directors Meeting
January 26, 2023
Peninsula Clean Energy
Agenda
• Call to Order / Roll Call
• Public Comment (for items not on the Agenda)
• Action to set the Agenda and Approve Consent Items 1-4 o Consent - Public Comment
• Regular Agenda
• Adjournment
Chair Report (Discussion)
CEO Report (Discussion)
Peninsula Clean Energy
Staffing Updates
Welcome to New Hires:
• Cassius Gray, IT Systems
and Support Administrator,
started January 23
Peninsula Clean Energy
Staffing Updates: Open Positions
Currently posted on PCE website:
• Director of Power Resources
• Human Resources Manager
• Administrative Assistant
• Director of Marketing and Community Relations
Soon to be posted on PCE website:
• Power Resources Analyst/Specialist
Peninsula Clean Energy
4th All-Staff In-Person Meeting
7 Peninsula Clean Energy
Supporting the Coastside Community
PCE is providing support for
the farmworkers with
donations to:
• ALAS
• Coastside Hope
8 Peninsula Clean Energy
Tumbleweed Storage Capacity Expansion
• Tumbleweed Long-Duration Storage
project, contracted with other California
Community Power (CC Power) members,
is expanding from 69 MW to 75 MW
o Peninsula Clean Energy’s share is expanding
from 14 MW to 15 MW
• Board approved on January 18, 2022
o 13.59 MW, with possible 25% increase (to
16.9875 MW)
o NTE amount of $100 million
• More details will be provided later tonight
9 Peninsula Clean Energy
News from Sacramento
Assembly Committee on Utilities
and Energy - New Memberships:
o Assemblymember Lisa Calderon
o Assemblymember Damon Connolly
o Assemblymember Pilar Schiavo
o Assemblymember Greg Wallis
10 Peninsula Clean Energy
Solar+Storage on Public Buildings
• First cohort of 15 projects in 13 jurisdictions
o Approval tonight of EPC contract and PPAs with
each jurisdiction
• Looking for projects for next cohort –
deadline is January 31 to qualify for NEM 2.0
o Other city facilities
o Other public facilities – school districts, water
treatment and waste treatment facilities, transit
agencies
o Please contact us if with contact information of
interested parties
11 Peninsula Clean Energy
PCE Ad Hoc Subcommittees
• Any interest in serving on:
oAd hoc Marketing
Subcommittee
12 Peninsula Clean Energy
Upcoming Meetings
• Citizens Advisory Committee:
o February 9 at 6:30 p.m. (Zoom)
• Audit and Finance Committee:
o February 13, 2023, at 8:30 a.m. (Zoom)
• Executive Committee:
o February 13, at 10:00 a.m. (Zoom)
• Board of Directors:
o February 23 at 6:30 p.m. (Zoom)
CAC Report (Discussion)
Peninsula Clean Energy | 15
8. Appointment of Ad-hoc Chair and Vice
Chair Nominating Committee
9. Appointment of Ad-hoc Citizens Advisory
Committee Nominating Committee
10.Appointment of Two Citizens Advisory
Committee Liaisons
2023 Rate Change Update
January 26, 2023
Peninsula Clean Energy
Guiding Principles for 2023 Ratemaking
• Continue to maintain two rate schedules for PCE customers o One rate for Vintage 2016-2021 customers, and
o One rate for Vintage 2022 customers
• Customers with negative PCIA keep the benefit
• Ensure a minimum net 5% discount on generation costs for PCE customers
17 Peninsula Clean Energy
PCE Standard Ratemaking Process
((PG&E Bundled Gen rate)*0.95)-PCIA-FFS
=PCE Gen rate
PCE Gen Rate + PCIA + FFS= net 5% discount from PG&E Gen Rate 18 PCIA = Power Charge Indifference Adjustment
FFS = Franchise Fee Surcharge
Peninsula Clean Energy
PCIA Rates Effective January 1, 2023
Customer Class 2016 Vintage 2021 Vintage 2022 Vintage
Residential 0.00335 (0.00397) 0.01309
Sm Commercial 0.00320 (0.00379) 0.01252
Md Commercial 0.00338 (0.00400) 0.01319
Lg Commercial 0.00317 (0.00375) 0.01239
19 Peninsula Clean Energy
PCE Customer Vintage Distribution
20 PCE Customers by Vintage
PCIA Vintage
2016-2020 2021 2022
Active PCE Customers
294,878 13,193 1,615
Net % Discount
5% 8-12% 5%
Peninsula Clean Energy
E1 Example Based on January 1, 2023 Rates
21 Peninsula Clean Energy
Questions?
22 Approval of Amendments to
CC Power Project
Participation Share
Agreements
January 26, 2023
Sara Maatta
Power Resources and Compliance Manager
(Interim Director of Power Resources)
Peninsula Clean Energy
Recommendation
• Delegate authority to the CEO to execute amendments to the Project Participation Share Agreements (PPSA) with California Community Power and Participating CCAs related to one long duration storage project and two firm clean resources projects:
o Amendment No. 1 to Tumbleweed Energy Storage PPSA
o Amendment No. 1 to the Fish Lake Geothermal PPSA
o Amendment No. 1 to the ORGP LLP Geothermal Portfolio PPSA 24 Peninsula Clean Energy
About California Community Power (CC Power)
• CC Power is a JPA of nine CCAs
• Vision: Leverage the buying
power of the members to deliver
more cost-effective, clean and
reliable energy solutions for our
customers
o Access to economies of scale and
greater efficiency by working
together
• Peninsula Clean Energy has been
a member since 2021
25 CC Power Members
Peninsula Clean Energy
Resources Contracted through CC Power
Resource Type Tumbleweed
Long Duration Storage
Open Mountain Energy
Firm Clean Resource
(Geothermal)
Ormat Portfolio
Firm Clean Resource
(Geothermal)
Developer LS Power Open Mountain Energy Ormat
Total Project
Capacity
75 MW / 600 MWh 13 MW 64 MW (min) – 125 MW (max)
PCE’s Share 14.77 MW / 118.1 MWh
(19.69%)
2.31 MW
(17.8%)
10.94 MW (min) – 21.38 MW (max)
(17.1%)
RFO Issued Oct 2020 Oct 2021 Oct 2021
PCE Board Approved Jan 2022 July 2022 July 2022
Contract Executed Apr 2022 Sept 2022 Sept 2022
Location Kern County Esmeralda County, NV Various – CA and NV Online Date 6/1/2026 6/1/2024 Various, as early as 2024 26 Peninsula Clean Energy
Typical CCA Contracting
27 Developer 1 CCA
Energy Storage Services Agreement
LDS Project CCA Customers
Typically, a CCA will procure storage services on behalf of its customers by directly entering into an Energy Storage Services Agreement (ESSA) with a developer. The ESSA addresses (1) payment obligations, (2) liability for damages, and (3) operational control of the storage unit.
Peninsula Clean Energy
CC Power Contract Structure: Power Purchase Agreement
(PPA) or Energy Storage Services Agreement (ESSA)
28 Developer CC Power
Power Purchase Agreement or
Energy Storage Services Agreement
LDS Project
Peninsula Clean Energy
CC Power Contract Structure: Project Participation
Share Agreement (PPSA)
29 Developer CC Power CC Power 7 CCAs
Project Participation Share Agreement
LDS Project CCA Customers Power Purchase Agreement or
Energy Storage Services Agreement
Peninsula Clean Energy
CC Power Contract Structure: Liability for Damages
30 Developer CC Power CC Power 7 CCAs
Project Participation Share Agreement
LDS Project CCA Customers
Buyer Liability Pass Through
Agreement
(Each participating CCA executes with Developer’s Seller entity and CC Power) Operating Agreement
Buyer Liability Pass Through Agreements
Power Purchase Agreement or
Energy Storage Services Agreement
Peninsula Clean Energy
CC Power Contract Structure: Operational Control
31 Developer CC Power CC Power 7 CCAs
Project Participation Share Agreement
LDS Project CCA Customers
Buyer Liability Pass Through
Agreement
(Each participating CCA executes with Developer’s Seller entity and CC Power) Buyer Liability Pass Through Agreements
Operations Agreement
Scheduling
Coordinator
Agreement
Power Purchase Agreement or
Energy Storage Services Agreement
Peninsula Clean Energy
Today’s focus: Project Participation Share Agreement
(PPSA)
32 Developer CC Power CC Power 7 CCAs
Project Participation Share Agreement
CC Power Project CCA Customers
Buyer Liability Pass Through
Agreement
(Each participating CCA executes with Developer’s Seller entity and CC Power) Buyer Liability Pass Through Agreements
Operations Agreement Scheduling
Coordinator
Agreement
Power Purchase Agreement or
Energy Storage Services Agreement
Peninsula Clean Energy
Project Participation Share Agreement (PPSA)
• The PPSA governs the overall mechanics for how members will fund payment obligations of the ESSA/PPA, how revenue will be shared, and how member defaults are covered. These major elements are functioning as intended and don’t require any change.
• The PPSA also addresses project operations and administration • The PPSA originally required approval at a formal, noticed meeting of the Project Committee, composed of staff from each of the participating CCAs, for administerial actions such as:
o Project management during the development phase (such as authorizing change of control and assignment)
o Project management budget authorization
o Determining scheduling and bidding of the project
• The requirement of Project Committee approval for administerial actions severely limits the ability of the project to efficiently and timely operate and meet constraints
33 Peninsula Clean Energy
Motivation for Amendment 1 to the PPSAs
• Since execution of the contracts, CC Power has adopted a Strategic Business Plan that makes recommendations regarding the roles and responsibility of the CC Power Board of Directors, CC Power General Manager, and project participants.
• Amendment 1:
o Aligns the PPSAs with the recommendations in the Strategic Business Plan o Improves operational efficiency of the projects
34 Peninsula Clean Energy
Project Participation Share Agreement (PPSA)
Amendment 1
• Removes the Project Committee and assigns those responsibilities to the CC Power General Manager
o The General Manager may still form a Project Committee to coordinate amongst members on an as-needed basis
• Further defines the roles and responsibilities of the General Manager and the CC Power Board of Directors, consistent with CC Power’s Strategic Business Plan
• Greatly increases the efficiency of CC Power’s ability to manage projects in development and schedule the projects in the CAISO market once they are online.
• There is no financial impact of Amendment 1
• Peninsula Clean Energy staff support Amendment 1.
35 Peninsula Clean Energy
Environmental and Labor Review
• Environmental and labor are negotiated prior to the execution of the ESSA/PPA contracts
• Amendment 1 only affects administerial matters that arise after the ESSA/PPA contracts have been executed, and does not affect our ability to enforce environmental and labor terms of the contracts • Peninsula Clean Energy retains the ability to negotiate for environmental and labor terms consistent with our policies • Any future projects considered by CC Power will be brought to Peninsula Clean Energy’s board for review and approval prior to execution.
36 Peninsula Clean Energy
Amendment 1 Timeline
• CC Power Board voted to approve the
Amendments 1 on Dec 14, 2022
• Participating members are targeting
Board approvals for January through
March 2023
• Peninsula Clean Energy staff support
the Amendments
37 CC Power
Member
Will seek Board approval
for Amendment 1?
CCCE
CPSF No
PCE Yes – Target 1/26/2023
RCEA Yes – Target January 2023
SJCE Yes – By March 2023
SVCE Yes – Target January 2023
SCP No
VCE Yes – January 2023
Peninsula Clean Energy
Recommendation
• Delegate authority to the CEO to execute amendments to the Project Participation Share Agreements (PPSA) with California Community Power and Participating CCAs related to one long duration storage project and two firm clean resources projects:
o Amendment No. 1 to Tumbleweed Energy Storage PPSA
o Amendment No. 1 to the Fish Lake Geothermal PPSA
o Amendment No. 1 to the ORGP LLP Geothermal Portfolio PPSA 38 Additional Context on Item 21
Amendment to CC Power Tumbleweed Energy
Storage Service Agreement (ESSA)
(Information Only)
Board of Directors, January 26, 2023
Peninsula Clean Energy
CC Power Tumbleweed Project History
• CC Power Long Duration Storage RFO Issued October 2020 • Tumbleweed Storage (developed by LS Power) shortlisted June 2021 • Peninsula Clean Energy Board Approved January 18, 2022 • Fully Executed April 19, 2022
• Original total project capacity was 69 MW/552 MWh (8-hr duration) • Peninsula Clean Energy share is 19.69%, and was originally 13.59 MW / 108.7 MWh
40 Peninsula Clean Energy
CC Power Tumbleweed Capacity Expansion
• The developer, LS Power, recently approached CC Power and offered to expand the total project capacity to 75 MW / 600 MWh • All project participants support the expansion of the project • Peninsula Clean Energy’s share remains 19.69%, and the same price and contract terms will apply to the expansion
41 Original
69 MW / 552 MWh
19.69%
13.59 MW / 108.7 MWh
Expanded
75 MW / 600 MWh
19.69%
14.77 MW / 118.1 MWh
Total Project Size
PCE Share (%)
PCE Share (MW/MWh)
Peninsula Clean Energy
Review: CC Power Contract Structure
42 Developer CC Power
Energy Storage Service Agreement
CC Power 8 CCAs
Project Participation Share Agreement
Tumbleweed
LDS Project CCA Customers
Buyer Liability Pass Through
Agreement
(Each participating CCA executes with Developer’s Seller entity and CC Power) Buyer Liability Pass Through Agreements
Operations Agreement Operations Agreement Scheduling
Coordinator
Agreement
Peninsula Clean Energy
Review: CC Power Contract Structure
43 Developer CC Power
Energy Storage Service Agreement
CC Power 8 CCAs
Project Participation Share Agreement
Tumbleweed
LDS Project CCA Customers
Buyer Liability Pass Through
Agreement
(Each participating CCA executes with Developer’s Seller entity and CC Power) Buyer Liability Pass Through Agreements
Operations Agreement Operations Agreement Scheduling
Coordinator
Agreement
Tumbleweed capacity expansion
amendment (from 69MW -> 75MW)
only affects the ESSA
Peninsula Clean Energy
Tumbleweed Approval Process
• CC Power Board voted to approve the amended ESSA 12/14/2022 • Peninsula Clean Energy does not need to execute the agreement o No change to the PPSA or BLPTA, and PCE is not a signatory to the ESSA • Peninsula Clean Energy Board approved a not-to-exceed (NTE) amount of $100M at the January 2022 Special Meeting
• The expanded capacity will remain within the NTE amount • No action is required by the Peninsula Clean Energy Board 44 2023 Legislative and
Regulatory Policy Platform
January 26, 2023
| 45
46 2023 Policy Platform
I. Governance and Authority
II. Decarbonization
III. IOU Charges and Exit Fees (PCIA)
IV. Power Procurement & Grid Reliability
V. Environmental Justice & Affordability
VI. Community Resilience
VII. Local Economic Development
VIII. California Energy Market Structure
46 Solar and Storage for
Public Buildings
Presentation to the Board of Directors
January 26, 2022
| 47
Peninsula Clean Energy
Solar and Storage for Public Buildings: Request
Program: Solar and Storage for Public Buildings
Request: Board delegate authority to CEO to execute two contracts:
1. Engineering, Procurement, and Construction (EPC), and
2. Power Purchase Agreement (PPA) contracts with participating public agencies to deploy solar and storage at customer sites 48 Peninsula Clean Energy
Program Overview
Summary: Accelerate local renewable energy deployment at local government facilities
Objectives
• Local solar and storage towards PCE’s goal of 20 MW by 2025 • Reduce customer energy costs; insulate against rise in PG&E rates • Help local governments achieve sustainability goals
• Develop a reproducible program and new service model
49 Program Detail
Portfolio
Structure
Policy
50 Peninsula Clean Energy 51
Pilot Portfolio
• Systems designed by
McCalmont
Engineering under
contract approved by
Board in Oct 2022
• Each jurisdiction has
approved participation
pending determination
of “financial and/or
community benefits”
Facility Rooftop PV
(kW DC)
Carport PV
(kW DC)
Ground
Mount Solar
(kW DC)
Battery
(kW)
Battery
(kWh) Status
Atherton Town Hall 113.5 GO
Belmont Police Station 29.5 59 Waiting on City’s
decision
Brisbane Mission Blue Center 11.1 25 155 GO
Colma Community Center 17.2 44 40 415 GO
Hillsborough Public Works Yard 23 39.4 GO
Los Banos Community Center 162.4 GO
Los Banos Wastewater Plant 277 GO
Millbrae Chetcuti Building & Complex 118.5 293 GO
Millbrae Rec Center 128.3 GO
Pacifica Community Center 76.7 60 240 GO
Redwood City Fair Oaks Community
Center 29.5 59 75 300 Waiting on City’s decision
San Bruno Aquatic Center 276.8 Waiting on City’s
decision
San Carlos Youth Center 29.5 GO
San Mateo County HSA Building (2500
Middlefield) 125.5 GO
San Mateo Police Building 81.2 89 Removed late due to roof repair issue Removed Total Solar: 1,913 kW
Total Battery: 200 kW / 1110 kWh (subject to change)
Peninsula Clean Energy
Value to Customers
• $12 million in savings projected over 20 years
• No upfront cost to customers
• Peninsula Clean Energy fully manages:
oProcurement
oFinancing and tax-credits
o Installation
oOperations and maintenance
52 Peninsula Clean Energy
Contract Structure
• PCE executes an Engineering, Procurement, and Construction (EPC) contract for equipment • PCE owns and operates resources
• PCE has a PPA for each facility for the solar production from the equipment (battery terms TBD) 53 Peninsula Clean Energy
Cash Flows
• Cash outflow to EPC, fully paid at Commercial Operation Date (COD) • Cash inflow from each PPA contract over 20-year PPA term • Result is cash neutral over the PPA term
54 Peninsula Clean Energy
Inflation Reduction Act (IRA) and Direct Pay
• Increases federal Investment Tax Credit (ITC) to 30% (from 26%) o Also removes stepdown in 2023
• Allows for ‘Direct Pay’ – qualifying tax-exempt organizations can directly claim the ITC without requiring a tax equity partner o No need for a tax equity partner (and sharing the ITC value) o Improves the PPA price that PCE can offer
o PCE conducted due diligence with external federal tax counsel on Direct Pay 55 Peninsula Clean Energy
NEM Successor Tariff / Interconnection
• Net Energy Metering (NEM) rules specify how excess hourly generation is valued
• CPUC released a decision for NEM 3.0 in December
o Reduces economic value of solar-only systems
o Would likely require redesign/downsizing of solar systems • Systems will be grandfathered in current, preferred NEM 2.0 rules o All interconnection applications submitted to PG&E in October 56 Contracts
Construction Services
Power Purchase Agreement
57 Peninsula Clean Energy
Construction Contractor (EPC) Overview
• Selected via competitive RFP in August 2022
• Intermountain Electric Company (IME) selected
o Based on price, experience, qualifications, contract terms, approach, Workforce Policy o Union labor
o Local, headquartered in PCE territory (San Carlos)
o Excellent reputation as confirmed by multiple reference checks • Scope of contractor role
o Procurement of equipment
o Installation and commissioning
o Operations and Maintenance (O&M)
o Warranty service
58 Peninsula Clean Energy
EPC Contract – Key Details
• Solar pricing enabling PPA price to cities with substantial savings • Battery pricing higher than expected
o Requires more iteration with customers on system sizing o Will move forward with solar projects while continuing to explore battery viability • PCE to own and operate resources
• Milestone based payments through Commercial Operation Date (COD) • Warranties: 25 years modules, 15 years inverters, 1 year labor • Operations and Maintenance (O&M) contract
• Solar production guarantee
59 Peninsula Clean Energy
Customer PPA Overview
• One PPA contract for all cities
o Created from Solar Energy Industries Association template recognized as fair to both parties
• Refined with all participants, incorporated requests where possible • Key terms tied to those in EPC contract (e.g. performance guarantee) • Battery projects (4 sites with batteries) will need further iteration o Exploring grid services to improve economics
o Will proceed with solar first. Battery systems can follow and would be an addendum to the Customer PPA.
60 Peninsula Clean Energy
PPA Contract - Key Details
• $/kWh price with 0% escalation
• Pricing delivers savings near 20% or better
o Pricing and savings varies by install type (roof, carport) o Projection based on increasing PG&E rates (5%/year)
• 20-year initial term
o Option for up to 2 addl. 5-year terms or customer buyout at end of initial term • Performance guarantee (matched to EPC performance guarantee) • PCE provides operations and maintenance (O&M)
61 Peninsula Clean Energy
PPA Pricing Determination
• Developed financial model for determining a PPA price based on costs and revenues • Based on portfolio-level costs, we determine an average PPA price and then adjust it to each facility based on the equipment specific to that facility. (e.g., carport is more expensive than rooftop, so there is a premium for carports). The only difference between PPA prices for different customers is based on relative amount of carport solar. 62 Included Costs Costs Not Included
1. Engineering, Procurement, and Construction Costs
2. System design costs
3. Contingency
4. Insurance
5. Permitting and Interconnection
6. System removal (end of term, if customer declines
purchase or no agreement for PPA extension)
7. Operations & maintenance (including reserves)
8. Small direct staff expense (1/8 FTE)
1. Cost of capital
2. Program pilot development costs (legal, etc.)
3. PCE overhead
Next Steps
63 Peninsula Clean Energy
Fiscal Impact
• EPC contract: Not to exceed $10 million
o 30% (up to $3 million) to be received back via federal Investment Tax Credit • PPA Agreements: Receive ongoing revenues for balance of costs over 20 years • Net neutral cost to Peninsula Clean Energy
o Time differential between cash outflows and inflows per below:
64 Expected year Cashflow
2022 – early 2023 Outflow of up to $10,000,000 for EPC contract-related work 2023 – 2024 Receipt of up to 30% of the amount spent on EPC contract-related work
2023-2043 Receipt of PPA revenues
2043 Breakeven year (when total cash inflows equal total cash outflows) Peninsula Clean Energy
Project Timeline
65 Date Project Status
Oct 2022 Interconnection applications submitted to PG&E to secure NEM2 grandfathering position
Jan 2023 Execution of EPC contract & execution of all PPAs with cities that are moving forward
Jan – May 2023 EPC site walkdowns, design diligence, permit applications Jan – Apr 2023 Iteration with customers on batteries (4 sites) and, if moving forward, addendum to PPA agreement
Jun 2023 Completion of final site design packages, and receipt of required permits Sept 2023 Equipment procured and construction started
Q1 2024 Target completion at all sites
• There is always potential for PG&E delays on interconnection • Process is a “black box” and PG&E can easily delay regardless of any published timelines • Expect a rush of applications from others also looking to get ahead of NEM3 Peninsula Clean Energy
Key Next Steps
• Execute Engineering, Procurement, and Construction (EPC) contract with Intermountain Electric Company
• Execute Power Purchase Agreement (PPA) with each city that wishes to move forward
66 Peninsula Clean Energy
Recommendations
Recommend the Board delegate Authority to the Chief Executive Officer to:
1. Execute Engineering, Procurement, and Construction (EPC) Contract with Intermountain Electric Company in an amount not to exceed $10,00,000 for the deployment of solar and solar + storage systems
2. Execute Power Purchase Agreements (PPAs) with Participating Jurisdictions (Buyers) for a term of 20 years to sell the energy generated by these systems, with revenues expected to fully offset cost of EPC Contract over the PPA term
67 Board Members’ Reports (Discussion)
Adjournment
Peninsula Clean Energy