Board of Directors
Regular Meeting
Board Retreat
November 16, 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 1-5 o Consent - Public Comment
• Regular Agenda
• Adjournment
Board Retreat
November 16, 2023
Amy Jiang
Project Manager
[email protected]
Grace Olechowski
Lead Researcher, Interviewer, and Analyst
[email protected]
Daniel Student
Project Lead and Facilitator
[email protected]
Team
Cleveland Justis
Chief Strategic Advisor
[email protected]
Why Organizational Development?
• Time to convene, align, and build
organizational strength
• Maximize internal potential to achieve future
successes
• Open-minded and generative collaborations
– ”I wonder if”
Building organizational capabilities
• Thorough analysis of PCE’s
current state
• Find essential opportunities
for organizational evolution
and growth
• Set aspirational and
achievable goals for how to
best work to drive
performance
• Prelude to effective
strategic planning
Actionable Results
• Stay grounded on shared goals and vision
while navigating recent leadership
transitions and rapid growth
• Equip individuals and teams with tools and
readiness to embrace uncertainty
Leadership and staff performance
• Clear strategy direction and understanding
• Readiness to plan and implement strategy
Strategic unity
Evolution Framework
Organizational
Assessment
Alignment
on
Medium
Term
Future
Strategize
Priorities
Identify
Organizational
Development
Areas
Organizational
Roadmap
Next
Strategic
Planning
Sept - Oct
2023
Nov - Dec
2023
Jan - Feb
2024
Mar -
Aug 2024
Late 2024 -
Early 2025
PCE has been in exponential growth since its
inception and is now moving into its next stage
of organizational maturity. What does and/or
should growth mean or look like for PCE in the
next 5-7 years?
Consider:
1. Electricity
2. Customer impact
3. Industry/market impact
Segment 1 - Futures Exercise
Segment 2: Organizational
Assessment
Staff Retreat
Appendix E: Organizational Power Grid Initial High-Level Analysis Needs
Individual
• Work-life balance
• Professional growth
Teams
• Cohesion
• Communication
• Strategic discussion
• Inclusive leadership
Organizational
• Shared passion and
alignment on
mission
• Learning and
creative problem-solving across
departments
Strengths
Internal Goals
External Goals
• Analytical, problem-solving culture
• Innovative and
entrepreneurial approach
• Highly specialized and
high-functioning teams
• Diverse expertise and
experiences
• Proactive approach to
growth
• Collective passion and goal
orientation
1. People and talent growth
2. Technology for operations
and marketing
3. Develop cross-collaboration systems and
processes
1. Reach all community
members and distribute
energy solutions and
benefits equitably
2. Transform the energy
sector at a national scale
3. Building momentum for
electrification and
decarbonization efforts at
a global scale
*Read left-right to see how further addressing needs could feed into organizational strengths and support possible goals.
Initial Pathway Exploration
Diverse and
Complementary
Expertise &
Experiences
Co-create PCE’s
Vision and
Growth
A Just and
Equitable Clean
Energy
Transition
Solutions and
Benefits
Distributed
Equitably across
Communities
Mission-aligned
and Invested
Staff
Eagerness for
Personal &
Organizational
Growth
Develop Career
Growth and
Leadership
Pathways
Structures for
Cross-collaboration
and Problem-solving
A National,
Transformative
Thought Leader
Feasible,
Replicable Clean
Energy Models
Accelerate
Decarbonization
and
Electrification
Solutions
X% Energy
Solutions
Adoption
Strengths
Opportunities
Aspirations
Results
The SOAR framework is an alternative perspective to the SWOT analysis. While SWOT assesses the organization’s current state, SOAR is forward-thinking and focuses on pathways to your desired future state. *Read top-down to see how organizational strengths might create causal linkages to results.
Strategic Priorities
Segment 3:
Discussion of Key Priority #1
Procurement Priorities and 24/7
Time-Coincident Goal (1 hour)
Board Retreat
November 16, 2023
Priority 1: Deliver 100% renewable energy
annually by 2025 and on a 99% time-coincident
basis by 2027.
• How do we balance industry leadership,
innovation, and what is possible within
current market constraints and economic
realities?
Segment 3 - Discussion
Peninsula Clean Energy
PCE’s Procurement Puzzle
16 PRIORITIES
Serving Load
Compliance
ECO Plus/100
Renewable 100% Annual
Renewable 24/7 Hourly
PRODUCTS/INSTRUMENTS
Energy
RPS/REC RA MTR
GHG Free
Procurement
Strategies
Who?
Where?
What?
When?
How?
Financial Stability / Affordability Cost of Energy < Revenue (Rates)
RPS/REC
RPS/REC
RPS/REC “24/7 Products”
±Risk
Revisiting the 24/7 Hourly
Matching Renewable Goal
Peninsula Clean Energy
Purpose
STRATEGIC PRIORITY:
• In November 2022, PCE's Board of Directors approved the strategic priority of delivering 100% renewable energy on a 99% time-coincident basis by 2025.
• In June 2023, the Board updated the strategic priority to delivering 100% renewable energy annually by 2025 and on a 99% time-coincident basis by 2027.
18 Market conditions have drastically changed in the past two years, which warrants the need to revisit PCE's current strategic goals:
• Understand the financial and risk implications of meeting the goals under adjusted assumptions • Set framework and priorities to guide procurement, and • Recalibrate the strategic goals if deemed appropriate Peninsula Clean Energy
Background
• Staff's 2022 analysis (published in
the white-paper) was based on
early-mid 2022 market conditions
• But Market has not materialized
in the direction we expected
19 Supply Chain
Disruption
Inflation
Labor Shortage
Increase in
Interest Rate
Interconnection
Delay
IRA
Uncertainties
Peninsula Clean Energy
Why Does the 24/7 Strategy Matter?
• Nearly eliminates PCE’s emission footprint
• Facilitates displacement of grid-level fossil fuel generation • Improves grid reliability by bringing on new clean & storage resource capacities
• Establishes PCE as a leader in sustainability and innovation In general, the 24/7 strategy promotes a mechanism in the power industry to combat climate change, which could lead to larger benefits such as preventing sea level rise, wildfire, extreme weather events and reduce health impacts to society.
20 Peninsula Clean Energy
Hourly Matching Concept Review
The 24/7 goal is to match our electricity supply to customer load each hour on a planning basis 21 2021 Peninsula Clean Energy 24/7 Emissions Footprint Peninsula Clean Energy 24/7 Emissions Footprint (Hourly 99% Goal)
Peninsula Clean Energy
24/7 Hourly Matching Current Status
With existing contracted resources in our portfolio:
o 83% hourly renewable matching by 2027*
* Note: Assuming contracted projects will be on schedule 22 Peninsula Clean Energy
Seasonal Supply Stack (2027)
23 Peninsula Clean Energy
Refining PCE's 24/7 Strategy
• Since June, staff has worked on several analysis with focuses on:
o Resource Availability: What resources would be available in 2027? o Market Uncertainty: What are the forecasted future price ranges for energy, RA, and REC?
o Reselling Excess Products: Can we sell our excess products? What are the best ways to sell the excess products?
o Cost and Risk: What’s the best way to evaluate the cost and risk impact for different time-coincident percentages?
24 Peninsula Clean Energy
Resources Availability: Additional Capacity Needed by 2027 25 • Under the Realistic
scenario, PCE will need to
procure significant amount
of additional capacity to
achieve higher time-coincident targets
• Under the Optimistic
scenario, a more desirable
set of available resources
significantly reduces over-procurement. This scenario
is unlikely for 2027.
Capacity required for
Annual 100% renewable
Peninsula Clean Energy
Over-Procurement in 2027 with the Current 24/7 Target
26 • Higher time-coincident
target results in more
over-procurement,
especially under the
Realistic scenario.
100% Annual
Matching
Peninsula Clean Energy
Why is Over-Procurement Risky?
27 Excess Supplies
(Over-Procurement)
Supplies matched to
load
Try to Re-Sell
$50M in Revenue
$10M in Revenue
Kicked while we’re down:
Low market prices also cause high PCIA,
which means we’d lose money from both poor
sales of over-procurement and lower customer
revenue
Mid market prices
“neutral”
$30M in Revenue
Peninsula Clean Energy
PCE’s Current 24/7 Goal is Challenged
CHALLENGE: Lack of Desirable Resources Available in 2027 o Limited supply of wind, geothermal, shaped-product, long-duration storage o Record-high prices
RISK: Inability to sell excess products or selling excess at low market prices 28 Significant Over-procurement at High Prices
Peninsula Clean Energy
Other Challenges & Risks
• Delays in project development and commercial operation • Changes in law that forces PCE to additional procurement of resources (in addition to the 24/7 needs)
• Disconnect between real-time operations and the planning target • Maintaining the 24/7 goal after the target year and challenges with finding perfect replacements
29 Peninsula Clean Energy
General Conclusions
• Meeting the 99% time-coincident target in 2027 is going to be extremely challenging.
• Continuing to procure heavily in the current market with lack of best-fit resources will significantly increase PCE's exposure to future market with excessive over-procurement, potentially resulting in high cost to PCE and our customers.
• A more risk-conscious strategy is needed to balance achieving a high time-coincident renewable target and keeping cost & risk at a reasonable level. 30 Peninsula Clean Energy
Next Steps
Staff, in consultation with the Procurement Subcommittee, will continue to refine the 24/7 renewable strategy and return to the Board in Q1 of 2024 with recommended amendments to the strategic priority for consideration and approval.
31 Board Retreat
November 16, 2023
Segment 4:
Discussion of Key Priority #2
Support Decarbonization of Member
Agency Communities by 2035
(1 hour)
Priority 2: Contribute to Peninsula Clean
Energy member jurisdictions reaching the
State’s 2045 goal to be 100% greenhouse-gas
free for transportation and building
electrification by 2035.
• What innovative strategies can we deploy to
meet our 2035 decarb goal, with focus on
demand response and distributed energy
resources (DERs), and solutions that meet
load modification and reliability goals?
Segment 4 - Discussion
Peninsula Clean Energy
Agenda
1. Decarbonization Goal History
2. 2035 Decarbonization Feasibility Analysis & Plan
3. Distributed Resources
| 34
Peninsula Clean Energy
Decarbonization Strategic Goal History
• Original Goal from 2025 Strategic Plan
Contribute to San Mateo County reaching the state’s goal to be 100% greenhouse gas-free by 2045. • Sept. 2021: CAC recommendation
Contribute to Peninsula Clean Energy service territory reaching the state’s goal to be 100% greenhouse gas-free by 2035. And take all necessary steps to meet this goal, as it is required by the climate emergency we all face.
• Sept 2021: Board adopted goal
Direct Peninsula Clean Energy to adopt a goal of 100% greenhouse gas free by 2035.
And direct staff to return with a plan for achieving that goal. 35 Peninsula Clean Energy
In Public Communications
36 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
2035 Goal Advisory Committees
Board Sub-committee
Rick DeGolia
Jeff Aalfs
Dave Pine
Laura Parmer-Lohan
37 Advisory Committee
Jeff Aalfs Board of Directors, Peninsula Clean Energy
Jeff Byron Former CEC Commissioner
Nancy Ryan Former CPUC Commissioner
Mary Anne Piette Division Director, Lawrence Berkeley National Lab Diane Bailey Executive Director, Menlo Spark
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
James Russell Energy Transition Director, CLEAResult
Justin Zuganis Director of Decarbonization, SVCE
Peninsula Clean Energy
2035 Feasibility Analysis & Plan
Market Conditions & Tech Innovation
Sources of capital
Detailed Characterization & Costs
Adoption Rates & Scaling Strategy
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)
2%
Water
0%
Wastewater
0%
Solid Waste
8%
Stationary Sources
5%
San Mateo Countywide Greenhouse Gas Emissions,
PCE Scope: Where PCE can Impact
39 Total: 4.1 MMTCO2e/yr as of 2019
(by 2021 reduced ~13% by PCE energy supply)
Peninsula Clean Energy
2035 Goal - Conclusions
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) 40 Peninsula Clean Energy
Programs Portfolio
41 New!
EV Managed Charging
(Res)
(Sunrun)
(GovPV)
Distributed Resources
42 Peninsula Clean Energy
Key Questions
1. Do PCE’s Distributed Resources fit with customer needs and PCE’s decarbonization objectives?
2. Any missing critical elements for the program?
3. Should any aspect be reprioritized?
43 Peninsula Clean Energy
Distributed Energy Resources Definition
Distributed Energy Resources (DERs) are
assets on the distribution grid, typically close
to load, and usually behind the meter, which
can be used individually or in aggregate to
provide value to the grid and individual
customers.
Peninsula Clean Energy
What PCE is trying to solve for
1. High Utility Rates
o PG&E territory has some of the highest utility rates in the country o Adversely impacting customer economics, trust and electrification benefits
2. Power Outages
o Frequent power outages are creating both real and perceived customer problems resulting in reticence to electrify
3. Access to Capital
o Developing approach to deployment of solutions at scale 45 Peninsula Clean Energy
Grid of the Future
46 Peninsula Clean Energy
PCE DER Objectives
• Provide grid benefits, especially peak shaving to reduce wholesale costs and carbon intensity, aiding further penetration of renewables • Provide resilience
• Lower operating costs for customers
• Make electrification more economically beneficial
• Deepen PCE-customer relationships and foster retention • Reduce PCE costs and support self-sufficient business model 47 Peninsula Clean Energy
DER Plans In-Progress
48 Expand GovPV
& add storage
Scale EV
managed
charging &
FLEXmarket
New residential
Solar + storage
Develop & deploy
addl. storage
methodologies
Peninsula Clean Energy
Key Questions
1. Do PCE’s Distributed Resources fit with customer needs and PCE’s decarbonization objectives?
2. Any missing critical elements for the program?
3. Should any aspect be reprioritized?
49 Backup
50 Peninsula Clean Energy
Programs: Strategic Plan Goals & Objectives
STRATEGIC PLAN GOALS
1. Contribute to Peninsula Clean Energy member jurisdictions reaching a goal to be 100% greenhouse gas free for transportation and buildings by 2035.
2. Implement robust energy programs that reduce GHG emissions, align energy supply and demand, and provide benefits across the community.
OBJECTIVES
1. Signature Programs: Develop market momentum for electric transportation and initiate the transition to clean energy buildings
2. Distributed Energy Resources: Support strategic decarbonization and local power development
3. Community Benefits: Deliver tangible benefits throughout our diverse communities
4. Innovation and Scale: Leverage leadership, innovation, and regulatory action for scaled impact 51 Peninsula Clean Energy
Programs: Recent Highlights
1. Buildings & Appliances
o State-leading effort with 19 agencies adopting building & EV codes o 10x acceleration in 2023, est. 2,000 heat pumps
2. Electric Vehicle Charging
o Innovation in approach, $4,000 ave per port (vs PG&E $18k) o 2/3rds in multifamily, highest need segment
o EV managed charging pilot in-progress
3. Distributed Resources
o GovPV Round 1: 12 sites, 1.7 MW solar, CYQ1 2024, $17M lifetime savings o GovPV Round 2: ~30-40 sites, 6-16 MW, RFP in-progress 52 Peninsula Clean Energy
Highlights – Underserved Communities
1. Electric Vehicles: 346 vehicles
o $3.6 million in savings over 10 years
o 18,000 MT CO2 over 10 years
2. Home Upgrade: 200 homes completed
o Home repairs plus electrification
o 2024 ramp-up: more homes, whole-home retrofits
3. E-Bikes: nearly 600 bikes
o Extremely popular
o >50% of trips displace car trips
53 Peninsula Clean Energy
Innovation Pilots
1. EV Managed Charging
o Support grid: shift charging out of evening peak
o Major opportunity: 7 kWh/EV, current: 40,000, future: 600,000+ o Through the vehicles: telematics based
2. Electrification Guidelines @100A & 120V HPWH
o Advanced design guidelines (electrification without panel upgrades) o Lower install costs
3. Advanced home system pilot (Harvest Thermal)
o Major innovation, combined space & water heating, “grid aware” o 4 of 4 installs completed, data collection in progress o Average install cost $22-23,000
o 70-90% reduction in home emissions
54 Board Retreat
November 16, 2023
Segment 5:
What does it Mean to Shift to a More
Customer-centric Approach Across
our Agency?
(30 mins)
What does it mean to shift to a more customer-centric approach across our Agency? Segment 5 - Discussion
Peninsula Clean Energy
Goals
• Customer-centricity overview
• Strategic questions for the Board
• Review brand audit findings
Case study
58 Peninsula Clean Energy
DMV case study
Ways DMV removed friction from the
customer experience:
1. Simple, accessible website
2. Virtual ability to “get in line” same
day visits with clock that shows
you how long until your number
waits
3. Each agent at each station
knows who you are
4. Get in and out quickly
Peninsula Clean Energy 60
"75% of consumers expect a consistent
experience across channels (web, mobile, in-person, social) and 73% are likely to switch brands if they don't get it.”
-Deloitte
Customer-centricity is table stakes
Peninsula Clean Energy
Building blocks
PCE
Ecosystem
Customer
Experience
Brand
Strategy
Customer
Centricity
What customers
expect from PCE and
how to bridge the gap
between current
perception and future
aspiration
The connected online-to-offline
strategy that creates a seamless
customer environment
How we meet customer
expectations
Customer centricity is the culture, framework and business strategy based on providing a positive customer experience and building long-term relationships.
Peninsula Clean Energy
Core challenges
PCE
Ecosystem
Customer
Experience
Brand
Strategy
Customer
Centricity Lagging brand
awareness and
transactional
interactions
Missing key technology platforms to
go from disconnected point solutions
to a more unified experience
Functional silos prevent
data sharing and lacking a
360° view of the customer
Alignment, strategy and investment are needed to operationalize a customer-centric approach to serving customers.
Peninsula Clean Energy
Board questions
PCE
Ecosystem
Customer
Experience
Brand
Strategy
Customer
Centricity Do we want to go
from transactional to
conversational?
Can we meet our decarbonization
goals without this shift?
What if we don’t move in
this direction?
Alignment, strategy and investment are needed to operationalize a customer-centric approach to serving customers.
Peninsula Clean Energy
How it could look to a
PCE customer
How it could look to a PCE
customer
Peninsula Clean Energy
How it could look to a
PCE customer
How it could look to a PCE
customer
Brand opportunities
66 Findings from Q2 brand audit
Peninsula Clean Energy
‘Peninsula’ doesn’t represent all current (or
future) coverage areas (ie: Los Banos)
“The logo looks like a gas flame or incandescent
bulb. And the colors are not ADA compliant.”
“Name and logo could better represent our
positioning as a trusted guide”
“Peninsula Clean Energy is a long name, so we
often shorten it to PCE, which is very easily
confused with PG&E.”
Brand Identity
Peninsula Clean Energy
Brand Imagery
• Current focus is mostly equipment and
technology
• Less human, approachable, or differentiated
• Place more emphasis on people and
community-members
• Makes it more ownable, differentiated, creates
a stronger connection with customers
Peninsula Clean Energy
Messaging
• Current focus on products and process isn’t
customer-centric
• Rational, literal focus doesn’t create
emotional connection
• Showing actual equipment doesn’t feel on-brand
• Can focus more on customers and the
outcomes they care
• Can be aspirational
• Creates more of an emotional connection
• Can pair nicely with more artistic imagery
Peninsula Clean Energy
Tone of voice & personality
• Can be more inspirational vs. informational
• Could be more straightforward and streamlined
• Opportunity to infuse more of a brand personality
• Formal and technical, with lots of information
Next Steps
Daniel Student
Project Lead and Facilitator
[email protected]
Amy Jiang
Project Manager
[email protected]
Contact
Adjournment
Peninsula Clean Energy