Peninsula Clean Energy
Board of Directors Regular Meeting
6:30 p.m.
April 27, 2023
Peninsula Clean Energy
Agenda
• Call to Order / Roll Call
• Public Comment (for items not on the Agenda)
o Please note, send any chats to Board Clerk, Nelly Wogberg • Action to set the Agenda and Approve Consent Items 1-5 o Consent - Public Comment
• Regular Agenda
• Adjournment
Chair Report (Discussion)
CEO Report (Discussion)
Peninsula Clean Energy
Topics to be Covered Tonight
• CFO Staffing Update
• Staffing Update
• All-Staff In-Person
• Legislative Update
• Reach Codes: Berkeley Lawsuit Update
• CalCCA Annual Conference
• Upcoming Meetings
Peninsula Clean Energy
CFO Staffing Update
• Kristina Cordero’s last day was April 20
• Andy Stern, our previous CFO, is
serving as Interim CFO
Peninsula Clean Energy
Staffing Updates: Open Positions
Currently posted on PCE website:
• Power Resources Analyst/Specialist
• 6 Summer Intern Positions – apply by May 12
o Energy Equity Research
o Electric Vehicles
o Buildings Electrification
o Load Forecasting
o Data Analyst
o Power Supply Contracts
• Coming Soon: Senior Manager of Local Power Development and Account Services Specialist
Peninsula Clean Energy
All-Staff In-Person Meeting on April 25
Peninsula Clean Energy
Legislative Update
• SB 537 (Becker) to amend Brown Act –
PCE is sponsor
• AB 1373 (Garcia) to enable DWR to be
central procurement entity and CPUC
jurisdiction over CCA IRPs – Oppose
Unless Amended
• AB 538 (Holden) to expand CAISO as
a multi-state regional transmission
system
Peninsula Clean Energy
Ninth Circuit Ruling on Natural Gas Hookups
1. On April 17, 2023 the United States Court of Appeals for the Ninth Circuit ruled against the City of Berkeley with regards to the City’s ordinance prohibiting gas hookups for new construction o Court held that the Federal Energy Policy and Conservation Act governing appliance standards preempts the Berkeley ordinance o Plaintiff: California Restaurants Association
2. Many open questions remain regarding implications on reach codes adopted by PCE member jurisdictions.
3. The Berkeley code is a “municipal code” using local “police powers” in relation to health and safety and differs from codes adopted by PCE jurisdictions.
o The Reach Codes adopted by the County and cities are based instead on CA Title 24 and the applicability of the City of Berkeley ruling to Title 24-based Reach Codes has not yet been determined.
4. PCE is conferring with other agencies and is engaged in its own analysis. PCE is not recommending a specific action at this time until additional details become available.
5. This case may be appealed. Each agency is encouraged to make its own assessment of legal risk.
6. PCE counsel is available to discuss this issue upon request. 10 Peninsula Clean Energy
CalCCA Annual Conference
•“Powered by Community”
• May 17-19 in San Diego, CA
o May 19 elected officials luncheon
•Board Members are encouraged to attend; please let
Nelly know of your interest in attending
11 Peninsula Clean Energy
Upcoming Meetings
• Executive Committee:
o May 8, at 10:00 a.m. (In-person and zoom)
• Citizens Advisory Committee:
o May 11 at 6:30 p.m. (In-person and zoom)
• Audit and Finance Committee:
o May 8, at 8:30 a.m. CANCELLED
o May 16 at 10:00 a.m. (In-person and zoom)
• Board of Directors:
o May 25 at 6:30 p.m. (In-person and zoom)
CAC Report
Item 10 – Authorize Energy
Storage Services Agreement
with Lockhart Energy Storage
Project
Sara Maatta, Power Resources and
Compliance Manager
April 27, 2023
Peninsula Clean Energy
Recommendation
Approve Resolution Delegating Authority to Chief Executive Officer to Execute Energy Storage Service Agreement for an Energy Storage Project with Lockhart ESS LLC, and any necessary ancillary documents with a Power Delivery Term of 15 years starting at the Commercial Operation Date on or about June 1, 2024, in an amount not to exceed $142 million.
15 Peninsula Clean Energy
Agenda
1. Project Overview
2. Expected Operations and Fit in Portfolio
3. CPUC Mid-Term Reliability Procurement Mandate
4. Fit with Strategic Plan
5. Recommendations
16 Project Overview
Peninsula Clean Energy
Lockhart Energy Storage – Project Overview
Project Owner Lockhart ESS, LLC
Developer Terra-Gen
Location San Bernardino County, CA
(Near City of Barstow)
Technology Lithium-ion battery (4-hour)
Capacity 45 MW / 180 MWh
Term 15 years
Delivery Start June 1, 2024
Project Site The site is adjacent to the SEGS VIII and
SEGS IX solar thermal projects. Terra-Gen is
redeveloping SEGS VIII as Solar PV, with
additional storage, using existing
interconnection facilities. Not located in DAC.
Lockhart Energy Storage Project Vicinity Map
Peninsula Clean Energy
Contract Structure
• Pay for 45 MW of capacity at a fixed $/kilowatt-month rate, no escalation • Small, fixed-price rate operating fee assessed against each MWh discharged • Contract term: 15 years
• Peninsula Clean Energy is entitled to all capacity attributes from the facility:
o Storage Capacity (Charging and Discharging)
o Resource adequacy
o Ancillary Services
• Peninsula Clean Energy will be the Scheduling Coordinator 19 Peninsula Clean Energy
Labor
• Lockhart has agreed that the construction of the project will be conducted using a project labor agreement, or similar agreement, providing for terms and conditions of employment with applicable labor organizations
20 Peninsula Clean Energy
Environmental Review Process
• Staff worked with environmental non-profits to develop a system for evaluating the environmental impact of projects.
• Staff studied the geospatial footprint of the project to evaluate whether the project is located in a restricted or high conflict area for renewable energy development:
o Protected areas at the federal, state, regional, local level (e.g. County-designated conservation areas, BLM Areas of Critical Environmental Concern, critical habitat for listed species, national, state, county parks, etc.). o Identified and mapped important habitat and habitat linkages, especially for threatened and endangered species (either state or federally listed). 21 USGS PAD-US: https://www.usgs.gov/core-science-systems/science-analytics-and-synthesis/gap/science/protected-areas RETI: https://reti.databasin.org/
Peninsula Clean Energy
Environmental Review Results
• The Lockhart project is not located in a protected area based on the USGS Protected Areas Database (PAD-US)
• Because the transmission and interconnection facilities are already existing, there is no expected environmental impact from construction of these facilities.
• All environmental permits have been acquired.
22 Expected Operations and
Fit In Portfolio
Peninsula Clean Energy
Battery Charge/Discharge Profile (2025)
24 5 10 15 20
−40
−20
0 20
40 5 10 15 20
−40
−20
0 20
40 5 10 15 20
−40
−20
0 20
40 5 10 15 20
−40
−20
0 20
40 5 10 15 20
−40
−20
0 20
40 5 10 15 20
−40
−20
0 20
40 5 10 15 20
−40
−20
0 20
40 5 10 15 20
−40
−20
0 20
40 5 10 15 20
−40
−20
0 20
40 5 10 15 20
−40
−20
0 20
40 5 10 15 20
−40
−20
0 20
40 5 10 15 20
−40
−20
0 20
40 Hour Hour Hour Hour
MWh MWh MWh
Month=Sep Month=Oct Month=Nov Month=Dec
Month=May Month=Jun Month=Jul Month=Aug
Month=Jan Month=Feb Month=Mar Month=Apr
Peninsula Clean Energy
Contribution to Portfolio - Annual (2025)
25 5 10 15 20 −100
0 100
200
300
400
500
600
700
Existing Contracts
Lockhart Storage
Load
MWh
Peninsula Clean Energy
Contribution to Portfolio - Seasonal (2025)
26 −100
0 100
200
300
400
500
600
700
5 10 15 20 −100
0 100
200
300
400
500
600
700
5 10 15 20
Existing Contracts
Lockhart Storage
Load
Hour Hour
MWh MWh
Spring Summer
Fall Winter
Fit with Strategic Plan
Peninsula Clean Energy
Fit with Strategic Plan
• Priority 1: Design a power portfolio that is sourced by 100% carbon free energy by 2025 that aligns supply and consumer demand on a 24x7 basis • Power Resources Goal 2: Secure sufficient, low-cost, clean sources of electricity that achieve Peninsula Clean Energy's priorities while ensuring reliability and meeting regulatory mandates
o Objective B: Procure power resources to meet regulatory mandates and internal priorities at affordable cost
28 CPUC Mid-Term Reliability
Procurement Mandate
Peninsula Clean Energy
Procurement Category 2023 2024 2025 2026 2027 2028 Total New Generic Capacity 38 113 28 35 35 - 249
Zero-emissions generation, generation paired with
storage, or demand response resources2
- - 47 - - - 47
New firm zero-emitting resources - - - - - 19 19
New long-duration storage resources3 - - - - - 19 19
Total Annual Net Qualifying Capacity (NQC) Requirements 38 113 28 35 35 38 287 Peninsula Clean Energy MTR Requirement
30 1. Obligation is in NQC MW (not nameplate) and subject to ELCC factor
2. Zero-emissions resources required to replace Diablo Canyon must be procured by 2025 and are a subset of New Capacity Required and may occur in any of the years 2023-2025; therefore, this row is now additive with the others.
3. Minimum 8-hour discharge
Procurement Obligation in NQC1 MW for Peninsula Clean Energy by Category and Year (Lockhart Energy Storage project will contribute toward the 2024 MTR requirement) Recommendations
Peninsula Clean Energy
Recommendation
Approve Resolution Delegating Authority to Chief Executive Officer to Execute Energy Storage Service Agreement for an Energy Storage Project with Lockhart ESS LLC, and any necessary ancillary documents with a Power Delivery Term of 15 years starting at the Commercial Operation Date on or about June 1, 2024, in an amount not to exceed $142 million.
32 Item 11 - Adopt a Resolution Approving Plan to
Delay Compliance with Uploading Time Varying
Rates to the Market Informed Demand
Automation Server (MIDAS) Database (Action)
April 27, 2023
Item 9 - Strategic Plan, Policies
#9 and #10 Proposed Edits
April 27, 2023
Peninsula Clean Energy
Agenda
• Background: DEAI Scope of Work
• Proposed edits to Strategic Plan
• Proposed edits to Policy #9
• Proposed edits to Policy #10
• Executive Committee Recommendation
35 Peninsula Clean Energy
DEAI Scope of Work
1. Review Relevant DEAI Legislation and Regulatory
Requirements (complete)
2. Conduct DEAI organizational needs assessment (complete)
3. Create organizational DEAI Policy (complete)
4. Update relevant organizational policies (in progress)
5. DEAI Action Plan: departmental goals and metrics to
operationalize DEAI (in progress)
36 Peninsula Clean Energy
Proposed Edits to Strategic Plan
37 Proposing edits to Organizational Excellence pillar:
• Current: Ensure organizational excellence by adhering to sustainable business practices and fostering a workplace culture of innovation, diversity, transparency, and integrity.
• Proposed Change: Ensure organizational excellence by adhering to sustainable business practices and fostering a workplace culture of innovation, diversity, equity, accessibility, inclusion, transparency, and integrity.
Peninsula Clean Energy
Proposed Edits to Policy #9
• Policy originally approved November 17, 2016
• Current title: Ethical Vendor Standards
• Proposed new title: Ethical Procurement Standards
• Focus of policy had broadened to include staff’s procurement conduct • Borrowed from San Mateo County Code of Ethical Conduct:
Procurement Ethics
38 Peninsula Clean Energy
Proposed Edits to Policy #9 Continued
• Proposed revised policy has the addition of the following sections:
o Sustainability and Social Responsibility
o Transparency
o Confidentiality
o Impartiality
o Professionalism
o Compliance
o Accountability
39 Peninsula Clean Energy
Proposed Edits to Policy #10
• Policy originally approved December 15, 2016, updated October 25, 2018
• Updated formatting for easier policy navigation
• Reformatting of and additions to Policy Statement under Section 1 • Revisions to Section 2b: Supply Chain:
o Revised Item 4: request info on diverse business ownership o Revised Item 6: encourage reporting on inclusivity in business staff o Added Item 7, Supply Chain Code of Conduct
40 Peninsula Clean Energy
Attachment A: Supply Chain Code of Conduct
• Derived from principles of UN, International Labour Organization (ILO), solar and business social responsibility organizations
• Sections:
o Freely Chosen Employment
o Young Workers
o Working Hours
o Wages and Benefits
o Humane Treatment
o Non-Discrimination/Non-Harassment
o Freedom of Association
o Restricted Jurisdictions
41 Peninsula Clean Energy
Proposed Edits to Policy #10 Cont.
• Addition of the City of Los Banos/Merced County/Central Valley:
o In Section 2c: Inclusive Business Practices
o When defining ”local” in Section 3b: Sustainable Workforce Objectives • Modification of “shall use” to “shall use best efforts to use” in Section 3d. Later modified by EC to “shall prioritize and give preference to” • Modification of apprenticeship requirement in Section 3d 42 Peninsula Clean Energy
Proposed Edits to Policy #10 Cont.
• Removal of entire section/paragraph on PCE Feed-In Tariff Price Projects
• Renaming Section 3e to Peninsula Clean Energy Programs, updating rest of this section to reference energy programs
43 Peninsula Clean Energy
IRA Apprenticeship Requirements
• Described in IRS Notice 2022-61
• Different kinds of apprenticeship requirements:
1. Apprenticeship Labor Hour Requirements
2. Apprenticeship Ratio Requirements
3. Apprenticeship Participation Requirements
44 Peninsula Clean Energy
Meetings with Labor, January 25 and March 6
• Peninsula Clean Energy staff met with labor to discuss proposed edits to Section 3d of Policy #10
• Outcomes of first meeting with labor:
1. Peninsula Clean Energy staff proposed retaining the proposed edits for “shall use best efforts” language to present to EC for their guidance and consideration.
2. Conduct further research on the IRA’s apprenticeship requirements to receive full tax credits
• Met again on 3/6, Labor reiterated concerns with proposed revision 45 Peninsula Clean Energy
Recommendation from EC, April 10
• Robust discussion at EC meeting on April 10 on staff’s original proposal of ”shall use best efforts” in Section 3d
• Committee members ultimately decided to modify language to “shall prioritize and give preference to”
46 Peninsula Clean Energy
Meeting with Workforce and EJ Alliance, April 20
• Staff met with the Workforce and EJ Standards Alliance • Constructive meeting; the Alliance had a positive reaction to the EC’s recommendation
• Staff is open to meeting with the Alliance again
47 Peninsula Clean Energy
Recommendation
Approval of Diversity, Equity, Accessibility, and Inclusion (DEAI)- Related Amendments to the Strategic Plan and Policy #9 and #10 48 Item 12 - NEM 2.0 Sunset and NEM 3.0
Transition
Leslie Brown
Director of Account Services
April 27, 2023
Peninsula Clean Energy
Discussion Overview
For Tonight:
o Brief history of Net Energy Metering (NEM) in California o High level overview of NEM 3.0
More to Come:
o Details on billing/credit options for future solar customers 50 Peninsula Clean Energy
Net Energy Metering (NEM) History
• NEM 1.0 in effect from 1996-2016/17 throughout CA
o Promote proliferation of rooftop solar
o Tariffs that heavily favored mid-day solar production o 12-month credit/charge aggregation at retail rate
o 20 year Interconnection Agreement
• NEM 2.0 in effect from 2016/17-April 14, 2023
o Required TOU rates for NEM customers (4-9 pm peak rates) o Included Non Bypassable Charges (NBCs)
o 12 month credit/charge aggregation at retail rate
o 20 year Interconnection Agreement
51 Peninsula Clean Energy
No Immediate Changes for Current Customers
• If you have an existing solar system, nothing will change about your current billing/compensation
• Existing NEM customers have 20 years from their original interconnection date before new policy applies*
o Changes and/or upgrades to an existing solar system can trigger an early transition to new program
• Processes for transitioning customers are still being developed 52 Peninsula Clean Energy
What is NEM 3.0?
• New solar interconnection policy for systems applying after April 14, 2023
o NEM 3.0 => Net Billing Tariff => Solar Billing Plan
• Per the CPUC the new policy changes are intended to:
o Credit excess solar generation at its grid value (vs retail) o Charge NBT customers for grid electricity based on high differential TOU tariffs and encourage solar + storage installations (encourage shifting exports to later in the day)
o Promote equitable access and benefits of solar for low-income customers o Support sustainable growth of solar in CA
53 Peninsula Clean Energy
NEM 3.0/NBT Major Differences
• E-ELEC is the only qualifying rate plan for residential customers • Reduces compensation for excess generation-no more retail credit o Avoided Cost Calculator (ACC) to calculate hourly value of solar export • Additional incentive for solar + storage
• Larger incentive for low-income (CARE/FERA) customers to allow for shorter payback (~9 years)
• Customers can oversize system (150%) if they attest to load growth within next 12 months
• NBT customers will be charged monthly for energy use (no more large, annual true-up statements)
54 Peninsula Clean Energy
What does this mean for PCE?
• PCE customers who did not submit a solar interconnection application by April 14, 2023 will be served under NEM 3.0/Net Billing Tariff rules • PCE is still responsible for setting our own compensation rates for excess solar generation and staff is still studying what is viable o Alternatives to the ACC may be costly and/or difficult to implement o ACC vales will still apply to T&D exports regardless of CCA Generation rates • More to come over the next few months as staff evaluates options 55 Adjournment
Peninsula Clean Energy