Peninsula Clean Energy
Board of Directors
Retreat
October 24, 2024
The meeting will begin shortly. Thank you!
Peninsula Clean Energy
Agenda
• Call to Order / Roll Call
• Public Comment (for items not on the Agenda)
o Please note, send any chats to Administrative Assistant, Brianna Arroyo • Action to set the Agenda and Approve Consent Items 1-6 o Consent - Public Comment
• Regular Agenda
• Adjournment
Chair Report (Discussion)
CEO Report (Discussion)
Peninsula Clean Energy
CEO Report: CPUC Electrification Site Visit
5 • PCE and CPUC Senior Staff from Energy Division
• Presentations + 2 Site Visits – Whole home electrification project and EV Ready charger installation at a local apartment building • Goals:
- Policy Thought Leadership
- Educate about PCE & Our Progress
- Build Relationships
Peninsula Clean Energy
CPUC Affordable Electrification Tour
Peninsula Clean Energy
CEO Report: PCE in the Community
• October 24 – Pacheco High School Popcorn Making Event; Los Banos
• November 3 - Chinese-Language Focus Group with Sound of Hope, Redwood City
• November 13 - Eco Home Presentation with El Concilio, North Fair Oaks
• November 14 - Department of Recreation Services Doelger Center Presentation, Daly City
• November 14 - Pachecho High School Field Trip, Los Banos • November 16 - Environmental Youth Summit, San Mateo County • November 17 - Wetlands & Watts Tabling, East Palo Alto • November 20 - School Assembly Presentation at Mills High School, Millbrae
• November 20 - School Assembly Presentation at San Mateo High School, San Mateo
7 Peninsula Clean Energy
CEO Report: Upcoming CEO/Council Briefings
• October 22 - Menlo Park
• October 22 – SMC Board of Supervisors
• November 13 – Colma
• November 13 – Portola Valley
• January 14 – Millbrae
• Woodside - TBD
8 Peninsula Clean Energy
CEO Report: Staffing Updates
New Hires
• Antonia Kirkton, Customer Success Advisor (Started 10/16) • Cesar Pinto, Customer Success Advisor (Started 10/16) • Laura Gonzalez, Customer Success Advisor (Started 10/16) Promotion
• Cassius Gray promoted to IT Manager
Posted Position
• Content Marketing Specialist
9 Peninsula Clean Energy
Upcoming Meetings
• Community Advisory Committee:
o Thursday, November 7 at 6:30 p.m.
• Audit and Finance Committee:
o Tuesday, November 12 at 8:30 a.m.
• Executive Committee:
o Tuesday, November 12 at 10:00 a.m.
• Board of Directors Meeting:
o Thursday, November 21 at 6:30 p.m.
CAC Report (Public Comment)
Peninsula Clean Energy
Board Meeting
October 24, 2024
Who We Are
14 La Piana Consulting is a national firm serving the social sector since 1998.
We partner with nonprofits and philanthropy
to develop and deliver customized solutions.
We work in four areas:
▪ Mergers and Alliances
▪ Strategic Planning
▪ Organizational Development
▪ Social Impact Investment
15 Current Status
What We Have Done
• Facilitated Strategy
Development Session with
Ad Hoc Committee
• Framed three critical
questions
• Initiated conversation
about PCE’s future value
proposition and decision-making criteria
• Begun getting feedback on
three critical questions
from staff, CAC, and other
interested community
members
• Facilitated all-staff retreat
What We Are Doing Now
• Continue to get feedback
on three critical questions
from the Board, CAC,
RICAPS, and other
community members
What We Are Doing Next
• Analyze feedback and
work with staff and the
Ad Hoc Committee to
develop
recommendations on
organizational strategy
• Prepare for January
Board meeting
• Work with staff to
develop Programmatic
and Operational strategy
during the Spring and
Summer
Agenda
▪ Setting the Context
▪ Critical Question One:
Procurement
▪ Critical Question Two:
Equity Customers
▪ Critical Question Three: Lines of
Business
▪ PCE’s Future Value Proposition
▪ Decision-Making Criteria
▪ Next Steps and Close
16 17
Critical Questions
1. What are PCE’s procurement priorities and how do affordability concerns affect those priorities?
2. How can PCE continue to deliver programs and services within an equity framework while also scaling decarbonization?
3. Are there any new or modified lines of business that PCE should engage in to further support decarbonization and electrification in California?
18 Critical Question One: Context
▪ All retail electricity resources must be renewable or zero carbon by 2045. ▪ PCE (and other LSEs in the State) have been driving towards the decarbonization of the energy supply by procuring greenhouse gas (GHG) free and renewable energy.
▪ Many electric Load-Serving Entities in California report almost 100% GHG-free energy on an annual basis, but this can obscure progress against proclaimed goals, e.g., natural gas accounts for 39% of the state’s electricity. ▪ PCE’s current goal is to achieve 100% renewable energy on an annual basis by 2030 through strategic and cost-effective procurement of resources that maximize Peninsula Clean Energy’s 24/7 hourly matching of renewable energy and load.
▪ Furthermore, recent market changes, increased market demand for clean power, wildfire and outage concerns, and regulatory mandates have increased price pressure on PCE’s procurement of generation resources.
19 Critical Question One: Definitions
▪ Decarbonization: The reduction or elimination of carbon dioxide and other greenhouse gas (GHG) emissions from the process of generating and delivering electricity, and from end-use processes such as transportation, space heating, water heating, industrial processes, etc. In the context of Question 1, we are only focusing on decarbonization of electricity generation and delivery. ▪ GHG-free energy: Energy produced from resources that generate no carbon emissions including large hydroelectric resources and nuclear power in California.
▪ Renewable Energy: Resources that meet California’s renewable portfolio standard (RPS) which include solar, wind, geothermal, small hydroelectric, biopower, and ocean thermal and tidal facilities. PCE’s procurement policy excludes biomass although this energy is still considered renewable energy under state law.
20 Critical Question One: Definitions
▪ Generation Provider: PCE, as a California load serving entity, is the default electric generation service provider for all of its customers, signing contracts with developers and other counterparties to deliver electricity that is supplied to California’s grid on behalf of its customers.
▪ Power Content Label: Each load-serving entity in California is required to send a Power Content Label (PCL) to its customers every year. The PCL reflects the environmental attributes associated with the energy procured by the LSE on an annual basis. The format and reporting of the PCL is regulated by the California Energy Commission in response to state law.
▪ 24/7 time-coincident matching renewable energy goal: Matching renewable energy with customer demand in each and every hour of the day. PCE’s current approach to 24/7 is to maximize hourly matching while balancing affordability.
This may result in “partial” 24/7 matching during some periods of the year. 24/7 matching can be more expensive than annual accounting but will also result in greater emissions reduction.
Critical Question One: Possible Answers
21 Option A:
Prioritize GHG Reduction
Option B:
Balanced Priorities (Status Quo)
Option C:
Most Affordable
Factors
Prioritize in this order:
1. 24/7 as soon as possible
2. Renewable (100% on annual
basis by 2030)
3. GHG-free energy on an
annual basis
4. Affordability
Factors
Prioritize in this order:
1. GHG-free energy on an
annual basis
2. Affordability
3. Renewable (100% on annual
basis by 2030)
4. 24/7
Factors
Prioritize in this order:
1. Affordability
2. GHG-free energy on an
annual basis
3. Renewable (100% on annual
basis by 2030)
4. 24/7
Critical Question One: Possible Answers
22 Option A:
Prioritize GHG Reduction
Option B:
Balanced Priorities (Status Quo)
Option C:
Most Affordable
Result
In order to prioritize 24/7 matching, PCE
would forego affordability and annual
GHG-free goals in exchange for building
and operating a power portfolio that
matches renewable energy supply to
customer demand each and every hour of
the day. PCE would build new resources
(solar plus storage, stand-alone storage,
wind, and geothermal) that would displace
the most emission-intensive natural gas
generation. This approach would be
significantly more expensive than the
status quo.
Result
Option B reflects PCE’s current approach,
which is to prioritize retail products that
minimize emissions on PCE’s Power
Content Label to illustrate 100% GHG-free electricity and a low carbon content on an annual basis. Low emissions are
aligned with PCE’s founding mission and
are key to PCE’s reputation with its
customers. Affordability is secondary to
PCE’s annual emissions. For example, in
early 2024, PCE’s Board adjusted its 100%
renewable goal to 2030 and modified the
24/7 matching goal based on affordability
concerns.
Result
Option C emphasizes customer
affordability by meeting minimum
mandated content requirements, and only
exceeding those requirements if
renewable energy is cheaper than
alternatives. This would slow and
potentially reverse PCE’s emissions
reductions. This option would conflict
with PCE’s currently stated primary
mission of reducing emissions and would
likely lead to reputational damage among
our customers, peer agencies, and
regulators.
24/7 matching and renewable content will
fluctuate depending on market conditions.
Critical Question One:
Discussion
▪ How do you think PCE should balance
the four factors driving procurement
decisions?
▪ What else should PCE be considering
during procurement decision-making
and priority setting?
▪ What else do you need to know when
voting on a PCE policy in this area?
23 24
Critical Question Two: Context
▪ PCE invests in customer programs geared at decarbonizing homes and businesses while also considering equity goals. Currently, PCE invests approximately 25% (or an average of $8 million per year) of its ratepayer-funded program budget serving low-income customers. PCE expects to secure approximately $9 million more from additional public funding sources to benefit low income customers. 25 Critical Question Two: Context
Considerations include (but are not limited to):
▪ The extent to which PCE should serve all customers, regardless of wealth segment, with accessible programs to maximize impact and decarbonization ▪ The extent to which PCE should focus its ratepayer revenue-funded energy programs on equity customers to:
Address historic impacts of the fossil fuel production economy Increase access to customers that have been traditionally underserved by programs (e.g., renters)
Deliver disproportionate benefit to low-income customers Reach customers in disadvantaged communities (DACs)
▪ The right balance between improving affordability for low-income/equity customers through rates compared to energy programs
26 Critical Question Two: Notes
▪ PCE developed a Diversity, Equity, Accessibility and Inclusion (DEAI) framework in 2022 that outlines PCE’s commitment to accessible and inclusive policies, programs and practices across the organization and within all of PCE’s workstreams. ▪ Serving equity customers via programs tends to be more expensive on a per-capita basis as those customers will need more financial assistance to implement decarbonization measures than non-equity customers.
27 Critical Question Two: Definitions
▪ Equity customer: PCE is using this as the “umbrella” term for all customers that we define as (1) historically underserved; (2) are low income and/or low wealth; (3) have been negatively impacted by the fossil fuel economy, and (4) live in a disadvantaged community (DAC).
▪ Underserved Customers: Customers who have been historically underserved by California’s energy programs and services due to income, wealth, geography, redlining or other forms of racism, cultural biases, language barriers, discrimination, or structural challenges for serving them.
▪ Low-income Customers: Customers with household incomes at or below 80% of San Mateo’s or Los Banos’ area median income (AMI). In PCE’s service territory there are approximately 56,000 customers that are at or below 80% AMI, which represents about 20% of PCE’s residential customer accounts. ▪ Low Wealth Customers. Customers whose household spends more than 30% of income on housing costs and are severely cost-burdened spending 50% of income on housing.
28 Critical Question Two: Definitions
▪ Historically Impacted Communities: Neighborhoods or groups of people that have disproportionally borne the negative impacts and burdens of fossil fuel production. ▪ Disadvantaged Communities: Disadvantaged communities (DAC) refer to the areas throughout California that suffer most from a combination of economic, health, and environmental burdens. These burdens include poverty, high unemployment, air and water pollution, presence of hazardous wastes as well as high incidence of asthma and heart disease.
29 Critical Question Two: Possible Answers
▪ Option A – Greater Focus on Equity Programs: PCE will invest more of its generation/ratepayer-funded revenues into programs to serve Equity customers, while taking every step possible to achieve PCE’s decarbonization goals (for example, seeking to spend about three quarters of the programs budget on programs serving Equity customers).
▪ Option B – Parallel Focus: PCE will invest its generation/ratepayer-funded revenues into programs that achieve the greatest level of decarbonization and will meet established goals for serving equity customers (for example, seeking to spend about half of the programs budget serving Equity customers). ▪ Option C – Greater Focus on Decarbonization Programs: PCE will invest its generation/ratepayer funded revenues into programs based primarily on achieving the greatest level of decarbonization and will meet its Equity goals through other resources and investments such as rate and bill assistance. Equity customers would still be served under programs but not an explicit carve out and would be primarily resourced through external, public funding.
Critical Question
Two: Discussion
30 ▪ Which equity customer segments should
PCE prioritize serving with its own
generation/ratepayer revenues (vs use of
external public funds)?
▪ How should PCE balance its programs
funding considering a desire to achieve both
decarbonization and equity goals?
▪ How do rate discounts and periodic rebates
factor into this discussion?
▪ What else do you need to know when voting
to refine PCE’s policy in this area?
31 Critical Question Three: Context
▪ PCE focuses on providing electrical service to its customers while PG&E provides delivery ( T&D) services.
▪ PCE’s core competencies include the procurement of centralized generation and storage projects and offering beneficial energy programs ▪ PCE needs to have confidence that the T&D grid can support moves to decarbonize
▪ In the longer term, as distributed energy generation grows, PCE’s generation revenues could decrease, which may ultimately yield an unsustainable business model.
▪ PCE must consider if there are other lines of business that it should engage in, or if its existing lines of business should be modified to adjust to changing needs
32 Critical Question Three: Definitions
▪ Electrical service: Provision of electricity to end users. ▪ Transmission system: The bulk movement of electrical energy from a generating site, such as a power plant, to an electrical substation (where it transitions to a distribution system).
▪ Distribution system: Local wiring between high-voltage substations and customers.
▪ Delivery service: Includes both transmission and distribution (T&D) services. ▪ Front of the Meter (FTM): Encompasses all electricity produced on the utility side of the meter and interconnected to the transmission and distribution (T&D) grid. ▪ Behind the Meter (BTM): Encompasses electricity produced on the customer’s side of the meter (i.e. at a customer site).
▪ Distributed Energy Resources (DER): DERs are assets on the distribution grid, either connected behind the meter or in front of the meter. They can be used individually or in aggregate to provide value to the grid and individual customers. 33 Critical Question Three: Possible New or
Modified Lines of Business
1. Energy and Decarbonization Consulting & Technical Assistance Consulting Services for business and local government entities Personalized energy services for commercial and residential customers
CCA consulting
PCE university – clean energy education
2. Fostering Distributed Energy Resources (DERs)
Grow Virtual Power Plants (VPP)
Community Solar + Storage and Microgrids
34 Critical Question Three: Possible New or
Modified Lines of Business
3. Transmission and Distribution Infrastructure Advocacy Enhance PCE's advocacy to ensure that the T&D grids can meet electrification demands
4. Financial Services and Partnerships
Power purchase agreements or lease-to-own models for BTM solar + storage
Operating EV chargers under PCE pricing structures
On-bill financing with varying interest rates
5. Neighborhood Decarbonization Zones
Create a replicable model for full neighborhood electrification Critical Question Three:
Discussion
35 ▪ Are the critical questions and
opportunities clear?
▪ Which opportunities seem most relevant
or important for PCE to consider over the
next five years?
▪ Should PCE consider adding or
expanding any lines of business not
expressed here?
▪ What other factors should PCE be
considering within this discussion?
36 PCE’s Future Value Proposition: Context
Historically, PCE’s value proposition has been the ability to deliver both “cleaner” (GHG-free and renewable) and cheaper energy. As described in the Context section of Critical Question One, PCE’s value proposition is changing as its long-term contracts come on-line and all load serving entities (LSEs), including CCAs, are required to provide 100% zero carbon energy by 2045.
PCE will need to construct a new, sustainable value
proposition. The factors that follow, developed at the August Ad Hoc Committee strategy session and advanced further at the September all-staff retreat can serve as a starting point for that effort.
37 PCE’s Future Value Proposition: What Could It Be?
▪ 24/7 Time-Coincident Renewable Energy: Prioritizing round-the-clock access to renewable energy as a differentiating strength. ▪ Not-for-Profit Structure: Focusing on community reinvestment, with no shareholders or profit-driven motivations.
▪ Local Focus: Serving as a trusted, community-led energy provider with elected officials on the Board and a strong local presence. ▪ Innovative Model: Developing new approaches to industry challenges that work for our local community and serve as a model across the state and country.
▪ Customer-Centric Approach: Offering easy ways for customers to learn and benefit from savings on energy decisions, electrification, and emissions reductions, built through trust-building with customers. 38 PCE’s Future Value Proposition: What Could It Be?
▪ Affordability: Maintaining lower rates compared to competitors like PG&E, while balancing between affordability and decarbonization goals. ▪ Trust and Transparency: Building and maintaining trust by being a resourceful, transparent partner in energy decisions.
▪ Nimble and Efficient: Avoiding bureaucratic hurdles to remain responsive and agile in meeting community needs, maintaining commitment to progress, and getting things done.
PCE’s Future Value
Proposition:
Discussion
39 ▪ What questions do you have about
PCE’s future value proposition?
▪ Do you have any quick thoughts
about what PCE’s Future Value
Proposition might be?
40 Decision-Making Criteria: Information Only
We are refining decision-making criteria for PCE to use in making major decisions. The list included here was developed by the Ad Hoc Committee as a first pass in August. We will be refining this over the next few months and incorporating a more polished version as part of the Board’s decision around Organizational Strategy in January.
41 Decision-Making Criteria
▪ Advance maximum mission and strategic impact
▪ Leverage or build out PCE’s Value Proposition
▪ Advance our commitment to equity
▪ Advance positive customer and community impact
▪ Align with our financial sustainability
▪ Account for operational impacts
▪ Meet compliance, policy, and political needs
▪ Meets PCE’s compliance requirements
▪ Enhance PCE’s community reputation as a trusted and transparent agent of change
Does/Is this decision (both independently and compared to other options) … 42 Close and Next Steps
▪ Collect and analyze feedback from community partners
▪ Work with staff and the Ad Hoc Committee to develop
recommendations on organizational strategy
▪ Prepare for board review and adoption of organizational strategy proposal at January 2025 Board meeting
▪ Work with staff to develop Programmatic and Operational strategy during Spring and Summer 2025
▪ Full Strategic Plan adoption Summer/Fall 2025
Thank you! Lester Olmstead-Rose
[email protected]
43 Board Members’ Reports
Peninsula Clean Energy
Adjournment
Peninsula Clean Energy