Peninsula Clean Energy
Board of Directors Regular Meeting
August 24, 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
CEO Topics For Tonight
• Results of Board Survey
• Update on Surplus Funds Ad-Hoc Subcommittee Meeting 2 • Solar on Public Buildings "GovPV" Installations Update • Open Positions
• September Meeting Dates
Peninsula Clean Energy
Board Survey - Feedback
6 Peninsula Clean Energy
Surplus Funds Committee Update
7 • Committee met on August 9th and made good progress
• Organized potential allocations around 4 funding categories
1. Increase reserves/days cash on hand
2. Increase customer savings through additional rate discount or rebate
3. Additional funding for customer programs (resi/commerical/municipal)
4. Funding for PCE sponsored local power projects
o Also discussed potential for schools support
Next steps
o Meeting #3 on September 7
o Consolidate committee ideas and continue discussions
Peninsula Clean Energy
Solar on Public Buildings: Installations Begun
8 • Solar installations in our first "Gov
PV" cohort have begun!
• Systems to begin coming online in
November
• 1.7 MW across 12 sites
• Next up: RFP release for second
cohort of projects spanning 35 sites
San Carlos Youth Center
29.5 kW
Peninsula Clean Energy
Currently Posted Positions
Please help us spread the word!
• Chief Operating Officer (recruiter support)
• Chief Financial Officer (recruiter support)
• Energy Programs Analyst
• Regulatory Analyst
• Los Banos Community Relations Associate Manager
https://www.peninsulacleanenergy.com/join-our-team/
Peninsula Clean Energy
September Meetings
• Special Audit and Finance Committee:
o Monday, September 11 at 8:30 a.m.
• Executive Committee:
o Monday, September 11 at 10:00 a.m.
• Citizens Advisory Committee:
o Thursday, September 14 at 6:30 p.m.
• Board of Directors:
o Thursday, September 28 at 6:30 p.m.
CAC Report
Local Government Building
Electrification Program
(GovBE)
Board of Directors – August 24, 2023
12 Peninsula Clean Energy
Program
Board approval of Local Government Building Electrification Program, including new $10 million revolving loan fund, and existing budgeted incentive funding to support electrification projects at local government facilities
13 Recommendation
Background and Context
| 14
Peninsula Clean Energy 15
Background: Govt Emissions and PCE Program
EV Ready
Fleets Procurement
GovPV
GovBE
Electricity
19%
Methane gas
in buildings
42%
Employee
commute
17%
Vehicle
fleet
22%
Source – Menlo Park Climate Action Plan Progress – Figure 14, 2016 emissions.
Peninsula Clean Energy
Excerpt from Millbrae 2020 Climate Action Plan
Millbrae’s new all-electric rec center
Atherton
Burlingame
16 CAP Goals to Decarbonize Government Buildings
Peninsula Clean Energy 17
BAAQMD Ruling Will Impact Govt Buildings
2027 - Rule 9-6 Boiler and Water Heaters
2029 - Rule 9-4 Space Heating Furnaces
2031 - Rule 9-6 Boiler and Water Heaters
Peninsula Clean Energy 18
Merced County Library, Los Banos San Carlos Youth Center San Mateo Animal Shelter Menlo Park Burgess Pool
GovPV
GovPV
What Is Needed? Flexible Funding Solutions
East Palo Alto City Hall
Brisbane Pool
Proposed Program
Local Government Building Electrification
| 19
Peninsula Clean Energy
Program Components
Flexible
Incentive
Revolving
Loan
Match
Funding
$
Peninsula Clean Energy 21
Why local governments need
access to incentives: • Electrification does not always have a payback
• Governments cannot take out unlimited loans • Cities have noted a need for a mix of both loan and incentive options
Incentive Program
Recommending: • Flexible incentive based on gas usage, at an amount similar to residential incentives or
$16/therm.
• Each 1,000 therms of gas saved per
year translates to ~5 MT CO2e/yr
Peninsula Clean Energy
Electrification Revolving Loan Fund
22 $10 million
seed funding
Governments install
electrification
equipment
PCE funds
projects
Governments
repay loan
Why local governments need
access to loans:
• Budgets are limited
• Individual projects are the wrong size for
one-off traditional finance, such as Power
Purchase Agreements
• California Energy Commission loan is too
restrictive
• Gas replacement programs in the capital
improvement pipeline are typically under-funded to enable electrification Peninsula Clean Energy 23
Revolving loan fund
• 7-year loan term
• 1% interest rate
• $10 million seed funding
• Max loan of $600k per project
• Max loan of $600k per agency per year
Proposed Program Terms
Incentive program
• $1 million/yr in current budget ($750k for FY24)
• Up to $16 per therm per year gas reduction
• $600k cap per project
• Max of $600k per agency per year
Match Requirement
• Minimum 25% cost-share by non-PCE funds
Examples
| 24
Peninsula Clean Energy
Local Government Pool Example
25 Total Installation Cost $700,000
Business as Usual Gas Cost $180,000
Incremental Cost to Electrify $520,000
Gas Savings per year $60,000
Electricity Increase per year $34,000
Energy Cost Savings (1st year) $26,000
Energy Cost Savings (12 years) $312,000
• Large municipal pool
• Aging gas water heater with $100k+
replacement cost
• Partial electrification - Plans to keep gas
water heater as backup system to avoid
extra $1M in electrical upgrade costs while
saving 80%+ of gas use
25% Project
Match,
$175,000
$16/therm
incentive,
$390,000
PCE Loan,
$135,000
$700,000
Project
Cost
Peninsula Clean Energy
Hypothetical Community Center Example
26 Example community center
electrification project:
• Eight HVAC gas units replaced with
heat pumps
• Heat pump water heater installed
• 11 Metric Tons CO2e saved per year
$200,000
Project
Cost
25% Project
Match, $50,000
$16/therm
incentive,
$32,000
PCE Loan,
$118,000
Peninsula Clean Energy
Project Selection Process
• Annual, streamlined application process
• Prioritize projects based on:
o Urgency (gas equipment aging out)
o Shovel-readiness
o Total therm savings
o "Showcase project" or high community visibility
• Retaining existing gas system allowed
27 Operating Cost Analysis
| 28
Peninsula Clean Energy 29
Operating Cost Impact
• Multiple recent studies have found that conversion from gas to heat pumps typically reduces operational costs, but in some cases adds negligible cost • The operational cost savings is higher if paired with solar PV Peninsula Clean Energy
Project Cost Examples
30 • CPUC-funded Statewide Municipal / School efficiency program • Includes electrification, but with strict requirements • Calculations by Wildan, found cost savings of up to 30%, or a cost increase of up to 3% Potential Impacts
| 31
Peninsula Clean Energy
1 5
12 14 14 14
8 6 6 6
2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
Fiscal Year
Number of Projects Funded by Fiscal Year
Example Revolving Loan Scale Over Time
32 Chart based on:
• 1% interest rate
• Average project size of $300,000
• $10 million in seed funding fund 86 projects/10 yrs
• Includes forecasted incentive program
Initial ramp-up as
projects are planned
Steady state period
after initial seed
funding is exhausted
Seed Fund Size Projects Funded
over 10 years
$5,000,000 49
$10,000,000 86
$20,000,000 151
Peninsula Clean Energy
Program Benefits
33 1. Energy cost savings for local governments
• Government buildings typically see cost savings from electrification • Pools will save up to $30,000 per year in energy costs • Adding on-site PV plus battery increases cost savings
2. Funding building improvements
• Help with deferred maintenance and replacement of systems • Electrification of difficult facilities
3. Emissions savings
• 500-3,000 MT per year
• A municipal pool heater has similar emission to 100 homes (100+ MT/yr) • A small recreation center is similar to electrifying 4 homes (6 MT/yr) Peninsula Clean Energy
May 2023
Present to CAC
August 2023
Finalize
program,
present to Board
Q4, 2023
Open grant
process
Q4, 2023
Select FY2024
projects
Q1 2024
Funding
available to local
governments
34 Proposed Timeline
Peninsula Clean Energy
Program
Board approval of Local Government Building Electrification Program, including new $10 million revolving loan fund, and existing budgeted incentive funding to support electrification projects at local government facilities
35 Recommendation
Net Billing Tariff (NBT)
Update
Board of Directors – August 24, 2023
Peninsula Clean Energy
Discussion Overview
• Brief recap of NEM 2.0 sunset and NBT transition
• Major differences between NEM and NBT
• Customers impacted by NBT
• What are other CCA’s doing?
• PCE policy considerations
37 Peninsula Clean Energy
What is NBT?
• New solar interconnection policy for new interconnection applications starting April 15, 2023
o NEM 3.0 => Net Billing Tariff (NBT) => Solar Billing Plan (SBP) • 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
o Discourage mid-day solar exports and encourage shifting exports to later in the day (duck curve mitigation)
o Support sustainable growth of solar in CA
38 Peninsula Clean Energy
NEM Evolution – CPUC Policy Objectives
39 NEM 1.0
1995 – 2017
• Promote
proliferation of
rooftop solar by
crediting
customers at full
retail rate
• Diversify energy
resource mix
• Tariffs favor mid-day solar
production
NEM 2.0
2017 – Apr. 14, 2023
• Given significant
participation in
NEM, align
compensation
closer to cost
through TOU
rates, and
requirements to
pay non-bypassable
charges
NBT
April 15, 2023 - present
• Reform program
to better align
compensation
for customer-sited solar with
net benefits
provided to grid
• Preserve
sustainable
growth of
behind-the-meter
renewable
generation
Peninsula Clean Energy
NEM => NBT Evolution
NEM 1.0
1996-2017
NEM 2.0
2017-Apr.14, 2023
NBT
Apr. 15, 2023 - present
Rate Schedule Any TOU rates (4-9 pm peak
rates)
TOU Electrification Rates (E-ELEC for
PG&E)
Value of solar
used concurrently
on-site
Offsets imports, so
equivalent to retail rate Unchanged Unchanged
Value of solar
exported to grid Full retail rate
Retail rate minus non-bypassable charges and
one-time interconnection fee
Avoided Cost Calculation (ACC) price per
interval – no more retail credit
Net Surplus
Compensation
(NSC) payment at
true-up
Net exports times NSC
rate Unchanged Net exports time NSC rate, minus ACC export value already granted Non-bypassable
charges
calculation basis
Net imports only Net imports within each
interval All imports (separately metered)
Billing and true-up period
Annual billing, annual true-up (both charges and
credits roll over for 12
months)
Unchanged Monthly billing and payment; annual true-up (credits roll over for 12 months) 40 Peninsula Clean Energy
NBT/SBP vs NEM Customer Solar Value
41 Did You Use It On-Site? NEM 1.0 / 2.0 NBT
Yes
It avoided imports
Retail rate value, through avoided
import rates
Unchanged and worth full value!
No
It was exported to the grid
Exports valued at retail rate-based
bill credit (minus 10% for NEM 2.0)
Exports valued based on Avoided
Cost Calculator values, significantly
less
Avoided Cost Calculator (ACC) is an established tool for evaluating Distributed Energy Resource and Energy Efficiency programs ACC determines generation, capacity, distribution, transmission, environmental, etc. values with every hourly interval
Controversial among solar advocates as the duck curve has continued to devalue energy during solar generating hours
Peninsula Clean Energy
Example: NBT Export Value in PG&E Territory
(no storage)
42 *Analysis by Justin Kudo-MCE
PG&E E-TOU-C rate Gen Value Delivery Value Total Value
NEM 1.0 14.6 c/kWh 26.8 c/kWh 41.3 c/kWh
NEM 2.0 14.6 c/kWh 23.6 c/kWh 38.1 c/kWh
NBT 2.9 c/kWh 0.5 c/kWh 3.3 c/kWh
NBT Reduction in Value -80% -98% -92%
Generation values = marginal energy value and resource adequacy Delivery values = T&D, public purpose programs, wildfire insurance, etc. Exports must be coincident with system peaks to have high value Abundance of solar is the main cause of solar devaluation Peninsula Clean Energy
Example Monthly Energy Export Credit Table
43 Peninsula Clean Energy
No Immediate Changes for Most NEM Customers
• 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 o PG&E is proposing to transition NEM 1.0 customers whose original interconnection agreements have expired on their next true-up pst Solar Billing Plan launch
o We estimate that there are ~250 current PCE customers (~1% of all PCE NEM customers) that are eligible for NBT transition through December 2024 44 Peninsula Clean Energy
What are other CCA’s planning?
• CPA (Clean Power Alliance) is the only CCA so far that has formally adopted an NBT policy.
o Will follow SCE’s compensation rates for generation but will evaluate separate programmatic opportunities to provide additional incentives for battery storage • Informally other CCA’s are likely planning to make similar decisions. o Follow the state plan for ACC compensation while looking for additional opportunities to support energy storage as well as low-income customer access/adoption
45 Peninsula Clean Energy
PCE Policy Considerations
• PCE will need to determine compensation rates for excess solar generation for NBT customers and staff is still developing our recommendation
o ACC values will still apply to T&D exports regardless of CCA Generation export rates
o Deviating from the ACC for Generation exports will likely cause confusion amongst solar installers and customers
o Anecdotal comments from solar industry imply that they will be modeling based of standard ACC compensation
• More to come over the next couple of months as staff refines recommendations
46 Customer Understanding
Marketing Update
Board of Directors – August 24, 2023
Overview
• Customer research sources
• Brand awareness
• Customer priorities
• Next steps
Sources of Customer Understanding
• Annual perception survey
• Feedback from community workshops
• Focus groups
• Other online surveys
49 Customer Verbatims
50 “I would love options to
PG&E.”
“I am not sure who you are
and what you want”
“You gave me a rebate… but I
didn’t realize you’re also my
electricity provider”
Customer Verbatims
“I would love options to
PG&E.”
“I am not sure who you are
and what you want”
“You gave me a rebate… but I
didn’t realize you’re also my
electricity provider”
51 Actual
Perception
Desired
Perception
Brand
Strategy
Customer Verbatims
“I just want safe, inexpensive power.”
“This year the price of gas and
electricity has been unsustainable.”
“I am interested in learning more about
what we can do personally in our own
home.”
“I’m interested but won’t change
appliances until mine are in need of
replacement...”
52 We can build relationships through
relevant content and context
Customer Verbatims
“I just want safe, inexpensive power.”
“This year the price of gas and
electricity has been unsustainable.”
“I am interested in learning more about
what we can do personally in our own
home.”
“I’m interested but won’t change
appliances until mine are in need of
replacement...”
53 We can build relationships through
relevant content and context
Annual Perception Survey
Brand Results – Persuasion Monitor™
55 We can build relationships through
relevant content and context
San Mateo: Metrics were stable/flat
Los Banos: All metrics improved in 2nd year of service
A Closer Look at Favorability
Most are unaware or unsure.
Where people are unfavorable,
they tend to have higher rate of
misperceptions:
1) They think we charge a higher
rate than PG&E
2) They thinks we are a branch
of PG&E
3) They thinks we are for-profit
San Mateo Los Banos
Resident Priorities
• Lower rates has increased in priority over the past few years • Programs that improve reliability or control costs are gaining importance • Programs aimed at environment or clean energy have declined in importance Attitudes About EVs
Aware Familiar Favorable Would Consider Now Use
Used EV Barriers
• Battery life has significantly
increased as a barrier
• Range is still an issue
• Maintenance cost concerns
have increased.
• Concerns about a lack of
charging stations has
dropped significantly
Attitudes About Electric Appliances
Aware Favorable Would
Consider Familiar Now Use
Ranges/Cooktops Space Heating
Aware Favorable Would
Consider Familiar Now Use
• Persuasion metrics all increased from 2020 to 2023
Better for indoor air quality
Safer
Greater environmental benefits
Reduces my household’s carbon footprint
Greater operating efficiency
Lower operation cost/fuel cost
Works better for heating your water
Lower purchase cost/less expensive
Works better for heating your home
Uses a power source that contributes to climate change
Works better for cooking
Building codes may restrict their installation in new construction • Electric seen as better for indoor air quality, safety, environmental benefits, carbon footprint • Gas appliances are seen as better for cooking
• Residents are divided on which is best in efficiency, operating and upfront costs Natural Gas vs Electric Appliances
61 Electric vs Gas 2023 San Mateo 2023 Los Banos
73%
60%
60%
61%
35%
32%
25%
20%
23%
21%
19%
9%
3%
4%
5%
5%
21%
25%
34%
27%
37%
43%
60%
56%
6%
12%
9%
8%
6%
8%
5%
9%
5%
7%
6%
4%
18%
24%
26%
25%
38%
36%
36%
44%
35%
29%
15%
32%
57%
48%
47%
43%
29%
31%
19%
28%
25%
27%
15%
9%
7%
9%
9%
7%
25%
24%
46%
24%
38%
19%
65%
30%
7%
9%
9%
10%
4%
7%
4%
8%
3%
10%
2%
8%
29%
34%
35%
40%
42%
37%
32%
39%
33%
44%
18%
53%
Electric
Natural Gas
Neither
Not Sure
Statement Agreement
(% 8-10, Mean) 2022 San Mateo 2023 San Mateo 2022 Los Banos 2023 Los Banos The actions I take in my home can have a
meaningful impact on climate change
I am willing to pay up to 10% more to
purchase products that mitigate climate
I am willing to replace my vehicle and/or
appliances before the end of their useful life
to help mitigate my impacts on climate
change
I am not willing to pay anything more to
purchase products that mitigate climate
change
• Almost half of SMC residents (48%) believe their individual, household actions can have a meaningful impact but while (29%) would pay up to 10% more to purchase products that do so. • Los Banos residents (39%) believe their individual, household actions can have a meaningful but fewer (24%) would pay up to 10% more to purchase products that do so.
Climate Change Attitudes
48%
34%
37%
14%
42%
21%
14%
24%
62 48%
29%
35%
19%
39%
24%
18%
25%
Statement Agreement
(% 8-10, Mean) 2022 San Mateo 2023 San Mateo 2022 Los Banos 2023 Los Banos The actions I take in my home can have a
meaningful impact on climate change
I am willing to pay up to 10% more to
purchase products that mitigate climate
I am willing to replace my vehicle and/or
appliances before the end of their useful life
to help mitigate my impacts on climate
change
I am not willing to pay anything more to
purchase products that mitigate climate
change
• Almost half of SMC residents (48%) believe their individual, household actions can have a meaningful impact but while (29%) would pay up to 10% more to purchase products that do so. • Los Banos residents (39%) believe their individual, household actions can have a meaningful but fewer (24%) would pay up to 10% more to purchase products that do so.
Climate Change Attitudes
48%
34%
37%
14%
42%
21%
14%
24%
63 48%
29%
35%
19%
39%
24%
18%
25%
Next Steps
Brand Strategy & Marketing Roadmap
Peninsula Clean Energy Launch
Early branding was approachable, friendly,
non-threatening.
2016
Updates to Look and Feel
We transitioned to a more professional,
modern, clear, upbeat and clean look, as a
trusted advisor delivering electrification
programs.
2020
Brand Strategy
Assess and evaluate the brand in the
context of internal and external changes,
e.g. organizational growth and how to best
serve our customers
2023
2018
Brand audit
Q3 2023
Marketing RFP
Q3 – Q4 2023
Execution
Q1 - Q2 2024
Thank you!
Adjournment
Peninsula Clean Energy