Peninsula Clean Energy
Board of Directors Meeting
November 21, 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: Strategic Plan Update
5 • Moved close out of 2020-2025 Plan to Spring 2025
2025-2030 Plan Underway
• Phase 1 (Policy Questions) - To Board in January 2025 • Phase 2 (Longer Term Agency & Dept Goals) - Feb. – April, 2025 • Phase 3 (Operational Infrastructure Needs) - May – July, 2025 • Board Adoption of the Full Plan in Late Summer 2025
Peninsula Clean Energy
CEO Report: Programs Update
Gov PV – Round 1 Complete By Year End
• 12 municipal sites; $17M in projected lifetime savings Resi Solar + Battery Storage
• New program launched; 400 low income customers already pre-qualified for no cost solar+storage systems
EV Ready - has crossed 1200 charge ports now operational Member Agency Energy Grants
• 7 member agencies have executed agreements; 5 more in process • Proposals must be received by June 30, 2025
Peninsula Clean Energy
CEO Report: Account Services Update
PCE In-House Customer Care Center Go Live!
• Call Center Manager + 3 customer service reps have been hired and are now in training
• Cut over on December 10th
• Full report to the Board about this and our soon-to-launch Turnkey program and electrification services at the December meeting Peninsula Clean Energy
CEO Report: Legislative Update – 2024 Election
• Federal Offices
o CD 13: John Duarte (50.1) / Adam Gray (49.9) – 227 vote difference o CD 15: Kevin Mullin (73.2) / Anna Cheng Kramer (26.8) o CD 16: Sam Liccardo (58.2) / Evan Low (41.8)
• State Offices
o SD 11: Scott Wiener (77.8) / Yvette Corkrean (22.2)
o SD 13: Josh Becker (72.5) v. Alex Glew (27.5)
o SD 14: Anna Caballero
o AD 19: David Lee (39.4) / Catherine Stefani (60.6)
o AD 21: Diane Papan (73.9) / Mark Gilham (26.1)
o AD 23: Marc Berman (59.9) / Lydia Kou (40.1)
o AD 27: Esmerelda Soria(53.8)/ Joanna Garcia Rose (46.2) • County of San Mateo
o BOS District 1: Jackie Speier
o BOS District 4: Lisa Gauthier (56.89) / Antonio Lopez (43.11) • State Proposition 4: Climate Bond (59.6) Yes / (40.4) No 8 Peninsula Clean Energy
CEO Report: PCE Directors Update
Directors Re-Elected in 2024
• James Coleman
• Donna Colson
• John Dugan
• Anders Fung
• Ken Gonzalez
• Tom McCune
• Carlos Romero
• Elmer Martinez Saballos
Still too close to call: Coleen Mackin ahead by 6 votes 9 Peninsula Clean Energy
CEO Report: Staffing Updates
New Hires
• Kerstin Grune, Associate Director, Marketing
Posted Positions
• Legislative Manager
• Power Resources Specialist
10 Peninsula Clean Energy
CEO Report: Upcoming CEO/Council Briefings
• January 14 – Millbrae
• Woodside – January date tbd
11 22 Briefings - Almost Done!
Peninsula Clean Energy
Upcoming Meetings
• Executive Committee: Tentatively Cancelled
o Monday, December 9 at 10:00 a.m.
• Board of Directors Meeting:
o Thursday, December 19 at 6:30 p.m.
• Community Advisory Committee:
o Thursday, January 9 at 6:30 p.m.
• Audit and Finance Committee:
o Monday, February 10 at 8:30 a.m.
CAC Report
Energy Risk Management
Policy
Kelly Lew Quintal, Risk Manager
Nick Bijur, CFO
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Peninsula Clean Energy
Energy Procurement Risks
Market Risk
Counterparty Risk
Concentration Risk
Operational Risk
Liquidity Risk
Regulatory Risk
Volumetric Risk
15 Peninsula Clean Energy
Background
• Procurement of energy entails significant risks which must be managed • As PCE’s load and supply portfolio have increased, so too have the risks • Energy risks currently managed on a relatively informal basis o Board approves all transactions greater than 5 years (i.e., long-term PPAs) o Transactions less than 5 years delegated to CEO for approval; such decisions discussed informally among Senior Staff
o Ad hoc reporting
• Proposed Energy Risk Policy (ERP) will strengthen internal controls and provides a more structured framework to manage and monitor energy risks o Formalizes and documents many of our current practices 16 Peninsula Clean Energy
Energy Risk Policy Overview
• Improved governance structure, including creation of a Risk Oversight Committee (ROC) • Board approval still required for contracts > 5 years and all material contract amendments (no change from current practice)
• Transactions 5 years or less delegated to the ROC
• The ROC will approve and delegate certain transactions with volume and price ranges that align with annual procurement targets and market conditions • Authorizations and limits based on benchmarking and best practices (see next page) • Board will be provided updates on energy risk management activities at least every 2 years • ERP was reviewed with the Executive Committee on November 12th and recommended for Board approval
17 Peninsula Clean Energy
CCA Governance and Authorization Comparison
Dollar limits generally not suitable due to volatility of energy markets; limits would need to be updated frequently to be in line with market prices and conditions 18 CCA Board Approval Board Delegation Delegated
Authorization
Risk
Committee Staff Delegation
Peninsula Clean
Energy > 5 years Risk Operating
Committee
5 years or less Yes
• 2 years or less (CEO and
Sr Dir Power Resources)
• 1 year and 2 mos. or less
(Authorized Traders)
Ava Community
Energy
> 5 years
(RA > 10 years) CEO 5 years or less
(RA 10 years or less) Yes • 2 years or less
Clean Power
Alliance > 10 years CEO, in consultation with Risk Committee 10 years or less Yes • Approval required by Risk Committee Marin Clean
Energy > 5 years CEO and Technical Committee 5 years or less Yes • Day ahead energy purchases Silicon Valley
Clean Energy >5 years CEO 5 years or less Yes
• 12 mos. or less
• $25M energy
• $15M RA and RECs
Peninsula Clean Energy
Governance Structure • Board delegates authority to newly formed ROC to implement and oversee ERP
• ROC will establish detailed processes, parameters,
limits and authorizations (ROC Procedures)
• ROC will meet quarterly to review, discuss, and
approve energy procurement activities (potential
purchases and sales) and manage energy risks
• Reports will be produced to review market outlook,
open positions, executed transactions, procurement
activity, counterparty exposures and policy
exceptions
• Establishment of a ROC is a best-in-class risk
management governance structure
19 Peninsula Clean Energy
ROC Procedures
ROC will establish and approve “ROC Procedures” that shall include the following:
• Consultation with Legal on all contracts
• Approved transaction platforms, contract forms, delivery points and product types • Procurement Plan and Forward Strategy Sheet (FSS) with pre-approved terms • Procurement and concentration limits
• Approved traders and transaction limits
• Counterparty credit and collateral requirements
• Metrics and reporting cadence
20 Peninsula Clean Energy
Implementation
The ERP will integrate and replace current Policies 7 and 15 • Policy 7 (Risk Management Policy) includes language regarding management of energy risk, among other risks, but does not include adequate details nor has it been updated since 2020 o Policy 7 only covers CAISO transactions, whereas the ERP will cover all energy transactions being executed
o Replacement of current Enterprise Risk Management Committee with ROC, which has broader representation and enhanced oversight
• Policy 15 (Energy Supply Procurement Authority) details current authorization to execute energy procurement transactions, but will benefit from additional clarity and structure o No change in Board authorization
o CEO authority to approve transactions < 5 years reallocated to ROC o Added delegation to Sr. Director of Power Resource and authorized traders will allow for quicker execution in a dynamic environment
21 Peninsula Clean Energy
ERP Authorization Summary
• The Board delegates transaction authority to the ROC and certain PCE staff 22 Authorization Delegated To Product Type Term
Risk Oversight Committee Power, RA, Environmental
Attributes
5 years or less
CEO Power, RA, Environmental
Attributes
2 years or less
Senior Director of Power Resources Power, RA, Environmental Attributes
2 years or less
CEO CAISO Products 1 year or less
Senior Director of Power Resources CAISO Products 1 year or less Authorized Trader RA, CAISO Products 1 year or less
Authorized Trader Power 2 months or less
Peninsula Clean Energy
Recommendation
• Approval of the Energy Risk Policy (ERP), replacing existing Policy 7 (Risk Management Policy) and Policy 15 (Energy Supply Procurement Authority), including delegation to the newly formed Risk Oversight Committee (ROC) to implement the ERP and oversee energy procurement risks
23 Acknowledgement and
Appreciation of Outgoing Board
Members
Donna Colson, Board Chair
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Board Members’ Reports
Peninsula Clean Energy
Adjournment
Peninsula Clean Energy