Board of Directors
Chair: Alice Dowdin Calvillo
Vice Chair: Tom Ivy
City of Auburn
Alice Dowdin Calvillo
Sandra Amara, Alternate
City of Colfax
Sean Lomen
Kim Douglass, Alternate
County of El Dorado
John Hidahl
Lori Parlin, Alternate
City of Grass Valley
Tom Ivy
Jan Arbuckle, Alternate
City of Lincoln
Dan Karleskint
Holly Andreatta, Alternate
Town of Loomis
David Ring
Danny Cartwright, Alternate
Nevada City
Gary Petersen
Lou Ceci, Alternate
County of Placer
Jim Holmes
Suzanne Jones
Bonnie Gore, Alternate
City of Placerville
David Yarbrough
John Clerici, Alternate
City of Rocklin
Greg Janda
David Bass, Alternate
Pioneer Community Energy
Board of Directors
February 15, 2024
2:30 PM CLOSED SESSION
3:00 PM REGULAR SESSION
Pioneer Community Energy Board Room
2510 Warren Drive, Suite B, Rocklin, CA 95677
Remote Locations:
Nevada City – City Hall, Wetherall Conference Room
317 Broad Street, Nevada City, CA 95959
This regular meeting will convene in person at the address printed above, be accessible on the Zoom platform at the following link:
https://us06web.zoom.us/j/89020017279; and live streamed for viewing on the Pioneer website:
https://pioneercommunityenergy.org/about-us/meetings-and-agendas/.
Members of the public may participate in person or by remote audio/visual access. Those who participated remotely and wish to comment should be prepared to use the Zoom platform via computer or telephone. Public comment will be opened for each agenda item in sequence.
How to Participate Using Zoom
You can join the meeting using the following link:
https://us06web.zoom.us/j/89020017279.
When you join the meeting, you will be muted by default. To inform the Clerk that you would like to make a public comment, you will use the “Raise Hand” feature.
Public Comment via Computer or Smartphone
If you would like to make a comment, you will use the “Raise Your Hand” feature. Please note that you should only raise your hand during the item to which you will comment. Instructions for using the “Raise Hand” feature when using a computer or mobile device can be found at the link:
https://support.zoom.us/hc/en-us/articles/205566129-Raising-your-hand-in-a-webinar Public Comment via telephone (Audio Only Option)
1. Dial 1 (699) 900-6833
2. When asked for the meeting ID, enter 890 2001 7279#
3. When asked for your participant ID, press # to continue.
You will be muted by default. To inform the Clerk that you would like to make a comment, during each agenda item, dial *9 to “Raise your hand.” When it is your turn to speak, the Clerk will identify you by the last three digits of your phone number; at that time, dial *6 to unmute yourself and state your name and comment for the record. Please note that you should only raise your hand during the item to which you will comment.
CLOSED SESSION
2:30 PM - CALL TO ORDER
1) Public Employee Performance Evaluation - GC §54957
Title: Executive Director
2) Conference with Labor Negotiators - GC §54957.6
Agency Negotiator: Board Chair
Unrepresented Employee: Executive Director
REGULAR SESSION
3:00 PM - CALL TO ORDER
I. GENERAL ADMINISTRATIVE FUNCTION – PART 1
A. CALL TO ORDER
1. Roll Call
B. PUBLIC REPORT OF CLOSED SESSION
C. AGENDA REVIEW
D. PRESENTATIONS BY THE PUBLIC ON MATTERS NOT ON THE AGENDA WITHIN THE
JURISDICTION OF THE BOARD
Persons may address the Board on items not this agenda. Please limit comments to 3 minutes per person. According to State Law (the Brown Act), items must first be noticed on the agenda before any discussion or action. The Board is prohibited from discussing issues not on the agenda brought to them at this time.
II. CONSENT AGENDA
1) APPROVAL OF THE CONSENT AGENDA
All items on the Consent Agenda have been recommended for approval by the Executive Director. All Consent items will be approved by a single vote. Anyone may ask to address Consent items prior to the Board acting, and the item may be moved for discussion. a) ADMINISTRATION
Approve revised minutes of the November 16, 2023 regular meeting, the minutes of the December 14, 2023 and January 18, 2024 regular meetings. (ECKERT) b) FINANCE & ADMINISTRATION
Adopt Resolution to Approve Mid-Year Operating Budget Adjustments. (KOEHN) c) FINANCE & ADMINISTRATION
Adopt Resolution to approve Employee Recruitment Incentive Program. (KOEHN) d) ADMINISTRATION
Affirm existing committee members to the Audit & Finance Committee, the Energy Procurement Review ad hoc Committee, and the Expansion ad hoc Committee through January 2025. (ECKERT) e) ADMINISTRATION
Appoint Director Petersen to Pioneer Community Energy’s (Pioneer) Energy Procurement Review Committee to fill the vacancy created with the departure of Director Cortez; and Director Ring to the Audit & Finance Committee to fill the vacancy created with the departure of Director Andreatta. (ECKERT)
f) ADMINISTRATION
Receive update regarding the Conflict of Interest Code Amendment for Pioneer Community Energy as a Multi-County Agency; and, next steps for filing Form 700-Statements of Economic Interests with the Fair Political Practices Commission. (ECKERT)
III. REGULAR AGENDA
2) ADMINISTRATION
Investment Grade Credit Rating (DISCUSSION-ECKERT)
RECOMMENDATION: Receive report on Pioneer Community Energy receiving an investment grade credit rating from Standard & Poor’s Global Ratings (“S&P”) of A- with a long-term outlook of stable. 3) ADMINISTRATION
Adopt Resolutions Commending Director Andreatta and Director Cortez for their Dedicated Service to Pioneer Community Energy (ACTION-ECKERT)
RECOMMENDATION: Adopt Resolutions commending Director Andreatta and Director Cortez for their dedication and outstanding service in directing Pioneer Community Energy. 4) PROGRAMS
Adopt Resolution Approving and Authorizing the Executive Director to Execute Any and All Documents and Agreements with Participate.Energy LLC and Tesla for Program Services (ACTION- STASSI-VANACORE)
Recommendation: Adopt Resolution approving and authorizing the Executive Director to execute any and all documents and agreements with Participate.Energy LLC and Tesla for program services. 5) PROCUREMENT
Update on the Implementation of Bioenergy Market Adjusting Tariff (BioMAT) (DISCUSSION-KANG) Recommendation: Receive an update on the implementation of BioMAT. 6) PROGRAMS
Second Amended and Restated Joint Powers Authority Update (DISCUSSION-ECKERT) Recommendation: Discussion as a follow-up to the resolution that approved the Second Amended and Restated Joint Powers Agreement for Pioneer Community Energy at the January 18, 2024, Governing Board Meeting.
IV. GENERAL ADMINISTRATIVE FUNCTION – PART 2
A. BOARD MEMBER COMMUNICATIONS
B. EXECUTIVE DIRECTOR COMMUNICATIONS
C. ITEMS FOR INFORMATION
1. Glossary of Terms
D. ADJOURNMENT
Upcoming Meeting of the Board:
March 21, 2024 at 3:00 PM
Accommodations
Pioneer Community Energy is committed to ensuring that persons with disabilities are provided with the resources to participate fully in its public meetings. If you are hearing impaired, we have listening devices available. If you require additional disability-related modifications or accommodations, including auxiliary aids or services, please contact the Clerk of the Board. If requested, the agenda shall be provided in appropriate alternative formats for persons with disabilities. All requests must be in writing and must be received by the Clerk five business days prior to the scheduled meeting for which you are requesting accommodation. Requests received after such time will be accommodated only if time permits.
Affidavit of Posting
I, Teresa Willock, Board Secretary, declare under penalty of perjury that the foregoing agenda for the February 15, 2024 regular meeting of the Pioneer Community Energy Governing Board was posted and available for public review on February 9, 2024 at the offices of Pioneer Community Energy, 2510 Warren Drive, Suite B, Rocklin, CA 95677; at remote location Nevada City-City Hall, Wetherall Conference Room, 317 Broad Street, Nevada City, CA 95959; and, was available for viewing on the Pioneer website at:
https://pioneercommunityenergy.org/about-us/meetings-and-agendas/. All public materials related to an item on this agenda submitted to the Governing Board after distribution of the agenda packet are also made available for public inspection on Pioneer’s website at: https://pioneercommunityenergy.org/about-us/meetings-and-agendas/. Any document provided at the meeting by staff or by the public will be provided by the Board Clerk upon request by phone at (916) 758-8946, or by email at: [email protected].
PIONEER COMMUNITY ENERGY
GOVERNING BOARD
REGULAR MEETING MINUTES
November 16, 2023
REVISED – Red-lined version
Entry No. 1
Heard General Administration Functions, Part I.
Call to Order
Pioneer Community Energy Governing Board met in open session at 3:00 PM on July 20November 16, 2023.
The Members convened in person and the meeting was accessible to the public at Pioneer Community Energy, 2510 Warren Drive, Suite B, Rocklin, California 95677; and was accessible for viewer participation on the Zoom platform at the following link: https://us06web.zoom.us/j/89967227073; and, was live streamed for viewing on the Pioneer website at: https://pioneercommunityenergy.org/about-us/meetings-and-agendas/.
Roll Call
Present: City of Auburn (Dowdin Calvillo), City of Colfax (Lomen), County of El Dorado (Hidahl), City of Grass Valley (Ivy), City of Lincoln (Andreatta), Town of Loomis (Cortez), County of Placer (Holmes), County of Placer (Jones), City of Placerville (Yarbrough), and City of Rocklin (Janda).
Absent: County of El Dorado (Hidahl), Nevada City (Petersen).
Chair Dowdin Calvillo presided over the meeting.
Agenda Review
Reviewed and made no revision to the meeting agenda for November 16, 2023.
Public Comment
There were no comments from members of the public on items not listed on this agenda.
Entry No. 2
Acted on the Consent Agenda as follows:
Approved minutes of the October 19, 2023 regular meeting.
Adopted Resolution 2023-30 approving an updated New Member Reserve Policy.
Approved the New Member Reserve amount of $5,300,000 for the cities of Grass Valley and Nevada City.
Adopted Resolution 2023-31 approving and authorizing the Executive Director to execute a renewal agreement with Granicus for GovDelivery email services effective November 25, 2023, for an amount not to exceed $130,000.
MOTION: Holmes. SECOND: Andreatta. Vote: 9:0:2.
ROLL CALL: Andreatta, Cortez, Dowdin Calvillo, Holmes, Ivy, Janda, Jones, Lomen, Yarbrough.
No/Abstain: None.
Absent: Hidahl, Petersen.
November 16, 2023 – page 2
Entry No. 3
Second Amendment to the Agreement with Calpine Energy Solutions, LLC Adopted Resolution 2023-32 approving and authorizing the Executive Director to execute a Second Amendment to the Agreement with Calpine Energy Solutions, LLC for data management and warehousing, call center support, and billing services increasing the contract authority and extending the termination date to December 31, 2026.
MOTION: Holmes. SECOND: Cortez. Vote: 9:0:2.
ROLL CALL: Andreatta, Cortez, Dowdin Calvillo, Holmes, Ivy, Janda, Jones, Lomen, Yarbrough.
No/Abstain: None.
Absent: Hidahl, Petersen.
Entry No. 4
Feed-in-Tariff Program
Considered resolution approving and authorizing a local Feed-in-Tariff (FIT) program in an amount not to exceed twenty million dollars.
Discussed prioritization of projects relevant to member agency composition such as biomass and hydroelectric; and moved the item to remove geothermal, wind, and solar+storage projects in an amount not to exceed fifteen million dollars of existing funds toward incentivizing local projects providing economic benefits through the local Feed-in Tariff program beginning in the next fiscal year.
Adopted Resolution 2023-33 approving and authorizing a local feed-in-tariff program in an amount not to exceed $15 million dollars excluding geothermal, wind, and solar+storage projects.
MOTION: Holmes. SECOND: Janda. Vote: 9:0:2.
ROLL CALL: Andreatta, Cortez, Dowdin Calvillo, Holmes, Ivy, Janda, Jones, Lomen, Yarbrough.
No/Abstain: None.
Absent: Hidahl, Petersen.
Entry No. 5
Second Amended and Restated Joint Powers Agreement for Pioneer Community Energy Authorized staff to notice member agencies and proceed with adopting the Second Amended and Restated Joint Powers Agreement for Pioneer Community Energy with any changes requested by the Governing Board.
MOTION: Janda. SECOND: Yarbrough. Vote: 9:0:2.
ROLL CALL: Andreatta, Cortez, Dowdin Calvillo, Holmes, Ivy, Janda, Jones, Lomen, Yarbrough.
No/Abstain: None.
Absent: Hidahl, Petersen.
This item will be presented for a vote by the Governing Board on January 18, 2024.
Entry No. 6
Nevada City and Grass Valley Expansion Update
Received an update on the public outreach and marketing activities for expansion into Nevada City and Grass Valley by Pioneer Community Energy beginning January 1, 2024.
November 16, 2023 – page 3
Entry No. 7
Quarterly Financial Reports through September 30, 2023
Received the Quarterly Financial Reports through September 30, 2023.
Entry No. 8
Heard General Administration Functions, Part II.
Board Member Communications
Chair Dowdin Calvillo informed the Board that the California Public Utilities Commission (CPUC) has approved PG&E increases for 2024 with an average residential increase of $22 for electricity only; and $32 for gas and electricity.
Executive Director Communications
Executive Director Eckert informed the Board that a rates discussion is scheduled for the December Board meeting; announced that Pioneer will be represented at the Mountain Mandarin Festival this weekend; that staff will be conducting a kick-off meeting with Standard and Poors regarding Pioneer’s credit rating; and that Pioneer received two awards from the Public Relations Society of America/Sacramento Chapter, Influencer Award for the Pioneer Website and Merit Award for the Pioneer Chatbot.
Executive Director Eckert also inquired as to the Board’s interest in participating in a tour of the California Independent System Operator (CAISO) facility; as there were interested members, staff will proceed with planning.
Executive Director Eckert announced that the next meeting is scheduled for December 14, 2023; and Director Andreatta confirmed that the Placer County Air Pollution Control District Board meeting had been cancelled so there is no scheduling conflict for that date.
In closing, Executive Director Eckert expressed appreciation for Board Members who participated at Pioneer’s Five-Year Anniversary Event; and recognized Gina Stassi-Vanacore and Paige Garcia for all their work in making the event a success.
Informational Items
Received the Glossary of Terms.
Adjournment
The meeting adjourned at 4:06 PM.
DRAFT
PIONEER COMMUNITY ENERGY
GOVERNING BOARD
REGULAR MEETING MINUTES
December 14, 2023
Entry No. 1
Heard General Administration Functions, Part I.
Call to Order
Pioneer Community Energy Governing Board met in open session at 3:00 PM on December 14, 2023. The Members convened in person and the meeting was accessible to the public at Pioneer Community Energy, 2510 Warren Drive, Suite B, Rocklin, California 95677; remote location at Nevada City-City Hall, Wetherall Conference Room, 317 Broad Street, Nevada City, CA 95959; and was accessible for viewer participation on the Zoom platform at the following link: https://us06web.zoom.us/j/89967227073; and, was live streamed for viewing on the Pioneer website at: https://pioneercommunityenergy.org/about-us/meetings-and-agendas/.
Roll Call
Present: City of Auburn (Dowdin Calvillo), City of Colfax (Lomen), County of El Dorado (Hidahl), City of Grass Valley (Ivy), City of Lincoln (Andreatta), Town of Loomis (Cortez), Nevada City (Petersen), County of Placer (Holmes), County of Placer (Jones), City of Placerville (Yarbrough), and City of Rocklin (Janda).
Absent: None.
Director Petersen arrived at 3:05 PM.
Director Jones arrived at 3:28 PM.
Chair Dowdin Calvillo presided over the meeting.
Agenda Review
Reviewed and revised the meeting agenda for December 14, 2023 as follows:
Executive Director pulled Item 1d from the agenda:
Adopt Resolution to approve and authorize the Executive Director to execute all documents deemed necessary to consummate the following modifications to the Line of Credit and Letter of Credit agreements with Umpqua Bank: (1) Increase existing Line of Credit limit from $20 million up to $30 million. (2) Expand the Line of Credit purpose to include Working Capital if a meaningful credit rating improvement can be realized.
Public Comment
There were no comments from members of the public on items not listed on this agenda.
Entry No. 2
Acted on the Consent Agenda as follows:
Approved minutes of the November 16, 2023 regular meeting.
Received Fiscal Year 2023-24 Draft Financial Reports through October 2023.
Adopted Resolution 2023-34 authorizing the Executive Director to execute a third amendment to the agreement with Richards, Watson & Gershon for legal services.
DRAFT - December 14, 2023 – page 2
Approved the Consent Agenda less Item 1d, Adopt Resolution to approve and authorize the Executive Director to execute all documents deemed necessary to consummate the following modifications to the Line of Credit and Letter of Credit agreements with Umpqua Bank: (1) Increase existing Line of Credit limit from $20 million up to $30 million. (2) Expand the Line of Credit purpose to include Working Capital if a meaningful credit rating improvement can be realized.
MOTION: Holmes. SECOND: Hidahl. Vote: 9:0:2.
ROLL CALL: Andreatta, Cortez, Dowdin Calvillo, Hidahl, Holmes, Ivy, Janda, Lomen, Yarbrough.
No/Abstain: None.
Absent: Jones, Petersen.
Entry No. 3
Establish a Solar Billing Plan-Net Billing Tariff and Approving the Solar Billing Plan-Net Billing Tariff Policy
Adopted Resolution 2023-36 to establish a Solar Billing Plan-Net Billing Tariff and Approving the Solar Billing Plan-Net Billing Tariff Policy.
MOTION: Holmes. SECOND: Dowdin Calvillo. Vote: 11:0:0.
ROLL CALL: Andreatta, Cortez, Dowdin Calvillo, Hidahl, Holmes, Ivy, Janda, Jones, Lomen, Petersen, Yarbrough.
No/Abstain: None.
Absent: None.
Entry No. 4
Public Hearing and Consideration of Adopting a Resolution Authorizing a Rate Adjustment in 2024
Conducted a Public Hearing; hearing no comments from the public, closed the public hearing.
Adopted Resolution 2023-37 approving implementation of Pioneer Community Energy’s Customer Generation Rate changes effective January 1, 2024 using a new option for Balance with a 10% minimum discount.
MOTION: Dowdin Calvillo. SECOND: Hidahl. Vote: 11:0:0.
ROLL CALL: Andreatta, Cortez, Dowdin Calvillo, Hidahl, Holmes, Ivy, Janda, Jones, Lomen, Petersen, Yarbrough.
No/Abstain: None.
Absent: None.
Entry No. 5
Update on Assembly Bill 843 Implementation Status
Received an update on Assembly Bill 843 implementation status.
Entry No. 6
Heard General Administration Functions, Part II.
Board Member Communications
Committee Chair Janda reported that the Audit & Finance Committee met on December 6, 2023, to consider the following items:
DRAFT - December 14, 2023 – page 3
Received an update from Pisenti & Brinker, Pioneer’s independent auditors. The auditor reported that the audit for years ended June 30, 2023 and 2022 financial statements is 95% complete and they expect to report to be completed by December 15th, and that there were no findings.
Received a preview of the 2024 Rate Proposal Outlook. The Committee received staff presentation of a rates overview and three proposed strategy options, then voted to recommend to the Board approval of Scenario 2 (Balance Approach), consistent with the prior two years rate setting decisions.
Received presentation overview on Internal Controls that focused on payment and revenue flow and the importance of Maher Accountancy expertise that supplements the few Pioneer finance staff in ensuring that proper internal controls are in place. Maher Accountancy provides critical support that contributes to the ‘clean’ audited financial reports that Pioneer has received.
Executive Director Communications
Executive Director Eckert introduced Lisa DeLaby, our new Community Outreach Manager. Lisa will be leveraging her extensive background in public relations, communications, community relations, marketing, and advertising.
With more than 20 years of experience as a director of public relations and marketing in higher education, she has a strong background serving diverse, local communities. Outside of work, she enjoys spending time with family and friends, playing pickleball, RVing, and paddle boarding. Lisa holds a bachelor’s degree from CSU, Chico in information and communication studies with a double major in public relations and journalism.
Executive Director Eckert announced that Pioneer will be serving the City of Grass Valley and Nevada City at the start of the new year. As of the date of this report, we have a 99% participation rate.
Executive Director Eckert informed the Board that the California Independent System Operator (CAISO) tour has been scheduled for January 31st with four Board Members confirmed; and requested for any other interested Members to contact staff.
Informational Items
Received the Glossary of Terms.
Adjournment
The meeting adjourned at 4:09 PM.
DRAFT
PIONEER COMMUNITY ENERGY
GOVERNING BOARD
REGULAR MEETING MINUTES
January 18, 2024
Entry No. 1
Heard General Administration Functions, Part I.
Call to Order
Pioneer Community Energy Governing Board met in open session at 3:00 PM on January 18, 2024. The Members convened in person and the meeting was accessible to the public at Pioneer Community Energy, 2510 Warren Drive, Suite B, Rocklin, California 95677; and was accessible for viewer participation on the Zoom platform at the following link: https://us06web.zoom.us/j/89967227073; and, was live streamed for viewing on the Pioneer website at: https://pioneercommunityenergy.org/about-us/meetings-and-agendas/.
Roll Call
Present: City of Auburn (Dowdin Calvillo), City of Colfax (Lomen), County of El Dorado (Hidahl), City of Grass Valley (Ivy), City of Lincoln (Andreatta), Town of Loomis (Cortez), County of Placer (Holmes), County of Placer (Jones), City of Placerville (Yarbrough), and City of Rocklin (Janda).
Absent: None.
Director Yarbrough arrived at 3:03 PM.
Director Holmes arrived at 3:08 PM.
Chair Dowdin Calvillo presided over the meeting.
Entry No. 2
Selection of Chair and Vice Chair of the Pioneer Governing Board for 2024 Elected Director Dowdin Calvillo to serve as Chair of the Pioneer Community Energy Governing Board for 2024, effective immediately.
MOTION: Hidahl. SECOND: Petersen. Vote: 10:0:1.
ROLL CALL: Andreatta, Dowdin Calvillo, Hidahl, Ivy, Janda, Jones, Lomen, Petersen, Ring, Yarbrough.
No/Abstain: None.
Absent: Holmes.
Elected Director Ivy to serve as Vice Chair of the Pioneer Community Energy Governing Board for 2024, effective immediately.
MOTION: Dowdin Calvillo. SECOND: Hidahl. Vote: 10:0:1.
ROLL CALL: Andreatta, Dowdin Calvillo, Hidahl, Ivy, Janda, Jones, Lomen, Petersen, Ring, Yarbrough.
No/Abstain: None.
Absent: Holmes.
Agenda Review
Reviewed and made no revision to the meeting agenda for January 18, 2024.
Public Comment
There were no comments from members of the public on items not listed on this agenda.
DRAFT – January 18, 2024 – page 2
Entry No. 3
Acted on the Consent Agenda as follows:
Received Fiscal Year 2023-24 Draft Financial Reports through November 2023.
MOTION: Andreatta. SECOND: Jones. Vote: 10:0:1.
ROLL CALL: Andreatta, Dowdin Calvillo, Hidahl, Ivy, Janda, Jones, Lomen, Petersen, Ring, Yarbrough.
No/Abstain: None.
Absent: Holmes.
Entry No. 4
Receive Financial Audit Report from Pisenti & Brinker, LLP Received the Year-End Financial Statements and the Independent Auditor’s Report for Fiscal Year 2022-23.
MOTION: Holmes. SECOND: Jones. Vote: 11:0:0.
ROLL CALL: Andreatta, Dowdin Calvillo, Hidahl, Holmes, Ivy, Janda, Jones, Lomen, Petersen, Ring, Yarbrough.
No/Abstain: None.
Absent: None.
Entry No. 5
Adopt Resolution Approving the Second Amended and Restated Joint Powers Agreement for Pioneer Community Energy with Any Changes Requested by the Governing Board Adopted Resolution 2024-1 approving the Second Amended and Restated Joint Powers Agreement for Pioneer Community Energy with any changes requested by the Governing Board.
MOTION: Hidahl. SECOND: Janda. Vote: 11:0:0.
ROLL CALL: Andreatta, Dowdin Calvillo, Hidahl, Holmes, Ivy, Janda, Jones, Lomen, Petersen, Ring, Yarbrough.
No/Abstain: None.
Absent: None.
Entry No. 6
Receive Update on Upcoming Programs
Received update on upcoming programs.
Entry No. 7
Adopt Resolution Approving the 2024 Governing Board Meeting Schedule Adopted Resolution 2024-2 approving the 2024 Governing Board Meeting Schedule.
MOTION: Petersen. SECOND: Lomen. Vote: 11:0:0.
ROLL CALL: Andreatta, Dowdin Calvillo, Hidahl, Holmes, Ivy, Janda, Jones, Lomen, Petersen, Ring, Yarbrough.
No/Abstain: None.
Absent: None.
DRAFT – January 18, 2024 – page 3
Entry No. 8
Adopt Resolution to Approve and Authorize the Executive Director to Execute all Documents Deemed Necessary to Consummate the following Modifications to the Line of Credit and Letter of Credit Agreements with Umpqua Bank: (1) Increase Existing Line of Credit Limit from $20 Million up to $30 Million (2) Expand the Line of Credit Purpose to include Working Capital if a meaningful credit rating improvement can be realized
Adopted Resolution 2024-3 to approve and authorize the Executive Director to execute all documents deemed necessary to consummate the following modifications to the Line of Credit and Letter of Credit Agreements with Umpqua Bank: (1) Increase existing Line of Credit Limit from $20 Million up to $30 Million. (2) Expand the Line of Credit Purpose to include working capital if a meaningful credit rating improvement can be realized.
MOTION: Holmes. SECOND: Andreatta. Vote: 11:0:0.
ROLL CALL: Andreatta, Dowdin Calvillo, Hidahl, Holmes, Ivy, Janda, Jones, Lomen, Petersen, Ring, Yarbrough.
No/Abstain: None.
Absent: None.
Entry No. 9
Heard General Administration Functions, Part II.
Board Member Communications
Board Chair Dowdin Calvillo commended staff for an exemplary job with messaging for Grass Valley and Nevada City customers coming online January 1, 2024; and commented that there is a need for extra messaging because everyone will see a higher bill due to PG&E rate increase and colder weather, and not from joining Pioneer. And, suggested that Pioneer may also want to consider a later start date for future expansion territory, moving from January to April.
Executive Director Eckert informed the Board that the focus this week has been more on getting the website updated with the new rates, then we will not only speak about the discount but also still better with Pioneer and why bills may look higher. Then, looking for staff to attend each agency’s board or council meetings in the coming weeks to provide public comment on this.
Chair Dowdin Calvillo has also recommended it would be beneficial for Director Ivy (Grass Valley) and Director Peterson (Nevada City) to address this at their Council meetings, so that their constituency and customers hear directly from them that they still have a twelve percent rate reduction with Pioneer and eventhough they see the rate increase, but it is not because of Pioneer.
Clarifications were voiced regarding the 99% participation rate and if customers are automatically opted in and then must opt out to not be a Pioneer customer; and to confirm that information on ‘How to Read Your Bill’ has been provided to the new customers.
Director Andreatta expressed her appreciation to Executive Director and staff for their kindness and care this past month and throughout the year; and informed the Board and staff that Alternate Director Karleskint will be returning to the Board as the primary member next month.
DRAFT – January 18, 2024 – page 4
Committee Chair Janda reported that The Audit & Finance Committee met on January 3, 2024, to consider the following items:
Received an audit report from Pisenti & Brinker, Pioneer’s independent auditors. The auditor reported that the audit for years ended June 30, 2023 and 2022 financial statements is complete and reported an unmodified or ‘clean’ opinion that the financial statement present fairly, in all material respects, the financial position of Pioneer Community Energy as of June 30, 2023 and 2022.
The committee conducted their annual selection of officers and selected as Chair Greg Janda and as Vice Chair John Hidahl.
Executive Director Communications
Executive Director Eckert reported that new rates being at 10% discount for Placer County, 12% for Grass Valley and Nevada City, and 19% for El Dorado County and City of Placerville. As for expansion, most complaints are coming from residents that are disappointed to not be joining Pioneer due to being residents of Nevada County.
Executive Director Eckert informed the Board that the California Independent System Operator (CAISO) tour has been scheduled for January 31st with four Board Members confirmed; and requested for any other interested Members to contact staff.
Informational Items
Received the Glossary of Terms.
Adjournment
The meeting adjourned at 3:56 PM.
Staff Report – Item 1b
To: The Governing Board
From: Brad Koehn, Director of Finance and Administrative Services Item 1b: Adopt Resolution to Approve Mid-Year Operating Budget Adjustments Date: 2/15/2024
RECOMMENDATION
Staff recommends the Board Adopt Resolution to Approve Operating Budget Adjustments.
BACKGROUND
The 2023-24 Budget provides support for Pioneer Community Energy (“Pioneer”) operations and maintains current generation rates that were effective January 1, 2024. The Revised column displays the Board amended Budget for increased Marketing efforts and the Executive Director approved budget movement between line items which do not increase the Budget. The table below is a high-level summary of the budget and recommended adjustments:
$ in Thousands Difference
Recommended Revised vs.
Adopted Revised Mid-Year Mid-Year
Total Energy Revenues $227,917 $227,917 $227,917 $0
Non-Operating Revenue $750 $750 $2,500 $1,750
Power Supply $183,919 $183,919 $183,919 $0
Operating Margin $44,748 $44,748 $46,498 $1,750
Total Operating Expenses $14,371 $14,771 $14,771 $0
Debt Service Total $3,760 $3,760 $4,060 $300
Total Expenses $202,050 $202,450 $202,750 $300
Contribution to/(from) Net Position $26,617 $26,217 $27,667 $1,450
ANALYSIS & DISCUSSION
The 2023-24 Mid-Year Budget is balanced and presents Pioneer in stable and strengthening financial condition. The projected contribution to Net Position of $26.67 million is directly improving the Reserve calculated days of liquidity.
Operating Revenues
The Year-To-Date (YTD) actuals through December 2023 show that overall revenues are falling short of expectations by $ 9.7 million or 8%. The lower revenue, however, is more than offset by reduced power supply costs. The actual meter data (CAISO reconciliations can take multiple years but are largely reconciled in the 3 month period following the generated bills) are reconciled through September 2023 and is demonstrating that usage is below expectations which is a major driver for the revenue shortfall. January 1, 2024, rate adjustments were effective and will result in additional revenue that should mitigate at least some portion of the current shortfall. The rate adjustment supports a 10% discount compared to PG&E’s generation Agenda Item: 1b Agenda Date: 2/15/2024
rate for Placer County ratepayers; 19% discount for El Dorado County ratepayers; and 12% for Grass Valley and Nevada City.
Energy (Power) Supply Expenses
The YTD actuals through December 2023 show that Power Expenses, similar to Revenues, are falling short of expectations by almost $12 million or 12%. Similar to Revenues a major driver of this decrease is the lower customer usage. Since any Pioneer purchased energy that is unused by customer demand ends up being sold to CAISO, the Power Expenses receive the benefit of that offset which reduces the power supply costs.
Although the year is not over, the avoidance so far of an extreme weather event is also a current factor in the lower-than-expected Power Expenses. However, the budget savings are also expected to be reduced over the rest of the fiscal year as costs related to energy, including Resource Adequacy, have increased more than what was anticipated for the January to June period. The energy market remains volatile and large swings in costs can occur at any time.
Operating Expenses
Overall, non-energy operating expenses (compensation, contract services and operating expenses) are at about 40% of the annual budget. There are some expected budget overages in certain divisional categories.
However, these expenses can be met with budget transfers from other accounts with no overall increase in the Operating Expense budget and no need to request additional budget appropriations.
Non-Operating Revenues
Pioneer has benefited from the current higher interest rate environment and from the increase in days of liquidity (Reserves) which have both contributed to earnings exceeding expectations. A budget adjustment is recommended to increase Investment Gains (losses) by $1.75 million for a budget total of $2.5 million.
Non-Operating Expenses Debt Service
Since Pioneer has acquired a Line of Credit, it has become a significant tool for issuing Letters of Credit that have replaced or preserved cash collateral required by energy suppliers. The reclaiming or retaining of cash has contributed to Pioneer’s improved days of liquidity (Reserves). The Board has authorized an increase in the Line of Credit which is expected to be closed in the coming weeks. The fees associated with the increase in Line of Credit and issuance of Letters of Credit are expected to exceed current budget appropriations and a budget increase of $300 thousand is recommended. The increased bank fees are offset by the increase in interest earnings that Pioneer has realized from retaining or recouping cash collateral from energy suppliers.
The Budget included an extra principal payment to the term loan of $2.1 million. The loan had been acquired to pay in full the Placer County Treasury, which had provided Pioneer with start-up funds. The extra payment was paid in January 2024 and will save $680 in interest expense and ‘shave’ 3 years off the remaining term of the loan.
Reserves
The Board approved an updated Reserve Policy October 2021, which established a minimum reserve target of 160 days of cash liquidity that is to be reached within three to five years. The Board considered several components when establishing the Reserve target including annual operating expenses, power supply expenses, power market cost fluctuations, and debt service. Beyond those considerations, another important benefit of Pioneer advancing to the reserve target was the opportunity to receive a credit rating that could result in Pioneer receiving more competitive power bids. At the close of December Pioneer achieved over 160 days of cash liquidity and in early February, S & P recognized Pioneer’s financial position with a credit rating of A-.
The current expectation is that the contribution to Net Position will end the year at $27.7 million with an expected year end Net Position of $100.0 million. The Net Position is an indicator that provides the likely direction for building or drawing down cash reserves, but Net Position and Reserves are not identical. Pioneer ended fiscal year 2023 at almost $60 million or 131 days of liquidity and by December had reached $93.6 Agenda Item: 1b Agenda Date: 2/15/2024
million or 169 days of liquidity. June 2024 is projected if an extreme weather event is avoided, at this time to reach $106 million or 191 days of liquidity. But if an extreme weather event occurs the days of liquidity could be 173 days. The cash position can be greater or less than the Net Position because of the impact that non-cash assets and liabilities have on Net Position, in this case, the anticipated liability amount is lowering the projected Net Position compared to the projected cash position.
FISCAL IMPACT
The FY 2023-24 adjustments to Investment will more closely align the budget with anticipated investment gains and is sufficient to fund the expected Line & Letters of Credit fees and also increase the contribution to Net Position.
ATTACHMENTS
1. Resolution Adopting the FY 2023-24 Budget Adjustments
2. December 2023 Financial Reports - Draft
Before the Governing Board of
Pioneer Community Energy
Resolution No.: ____________
The following Resolution was duly passed by the Governing Board of Pioneer Community Energy at a regular meeting held February 15, 2024, by the following vote on roll call:
Ayes:
Noes:
Absent:
Signed and approved by me after its passage.
______________________________
Chair of the Governing Board
Attest:
_______________________
Secretary
WHEREAS, the Governing Board of Pioneer Community Energy (“Pioneer”) adopted the Fiscal Year 2023-24 Operating Budget (“Adopted Budget”) on June 15, 2023; and WHEREAS, the Adopted Budget was approved during a time of volatile and increasing power costs; and
WHEREAS, the Governing Board understands that financial projections are highly uncertain, and that Pioneer’s revenues and electricity costs vary due to factors such as weather-driven impacts on heating/cooling demand, economic conditions, changes in wholesale energy market prices and changes in customer usage patterns, and that actual revenues and costs can vary significantly over the course of a fiscal year due to unforeseen factors outside of Pioneer’s control: and
WHEREAS, the Board has established a Reserve Target of 160 days of cash liquidity to be reached in a 3 to 5 year timeframe; and
WHEREAS, the Board has approved a rate adjustment that was effective January 1, 2024, while maintaining a rate discount of 10% to 19% compared to PG&E’s rates plus the Power Cost Indifference Adjustment (PCIA) that PG&E charges Pioneer customers; and In the matter of: Adopt Resolution to Approve
Operating Budget Adjustments
Resolution 2024-__
February 15, 2024
2 WHEREAS, future power purchase costs, energy sales uncertainty; and weather-driven impacts, economic conditions, changes in wholesale energy market prices, changes in customer usage patterns are difficult to forecast and will impact actual revenues and expense; and
WHEREAS, the Board considers the Budget a ‘living’ document; and BE IT RESOLVED, the Governing Board of Pioneer Community Energy, State of California, hereby finds, declares, and resolves as follows:
1. The above recitals are true and correct.
2. Approve the Pioneer Community Energy FY 2023-24 Operating Budget as shown in Exhibit A attached hereto and incorporated by reference.
3. This resolution shall take effect immediately.
Attachments:
Exhibit A: Fiscal Year 2023-24 Operating CCA Budget
Exhibit A
Recommended Difference
Adopted Revised Mid-Year Revised to Mid-Year
Revenues Energy Sales $225,938,000 $225,938,000 $225,938,000 $0 Green 100 $30,000 $30,000 $30,000 $0
Congestion Revenue Rights $5,000,000 $5,000,000 $5,000,000 $0 Less Uncollectable Accounts ($3,050,568) ($3,050,568) ($3,050,568) $0 Total Energy Revenues $227,917,432 $227,917,432 $227,917,432 $0 Investment gains (loses) $750,000 $750,000 $2,500,000 $1,750,000 Total Revenues $228,667,432 $228,667,432 $230,417,432 $1,750,000 Energy Expenses
Power Supply $183,919,000 $183,919,000 $183,919,000 $0
Operating Margin $44,748,432 $44,748,432 $46,498,432 $1,750,000 Recommended Difference
Operating Expense Adopted Revised Mid-Year Revised to Mid-Year By Division
Administration Total $2,042,958 $2,042,958 $2,042,958 $0 Finance Total $1,677,587 $1,677,587 $1,677,587 $0
Power Procurement Total $2,822,578 $2,822,578 $2,822,578 $0 Customer Care Total $3,664,898 $3,664,898 $3,664,898 $0 Marketing Total $1,261,320 $1,661,320 $1,661,320 $0
Legislative & Regulatory Total $901,307 $901,307 $901,307 $0 Programs Total $2,000,000 $2,000,000 $2,000,000 $0
By Expenses Type
Compensation $4,257,123 $4,257,123 $4,257,123 $0
Contract Services $6,584,429 $6,984,429 $6,984,429 $0
Operating Expenses $3,529,096 $3,529,096 $3,529,096 $0
Total Operating Expenses $14,370,648 $14,770,648 $14,770,648 $0 Debt Service
Term Loan Debt Service $950,000 $950,000 $950,000 $0
Additional Term Loan Principal $2,100,000 $2,100,000 $2,100,000 $0 Line/Letter of Credit Fees $350,000 $350,000 $650,000 $300,000 Financial Security Requirement $360,000 $360,000 $360,000 $0 Debt Service Total $3,760,000 $3,760,000 $4,060,000 $300,000 Total Expenses (Energy, Operating, Debt Service) $202,049,648 $202,449,648 $202,749,648 $300,000 Contribution to/(from) Net Position $26,617,784 $26,217,784 $27,667,784 $1,450,000
PIONEER COMMUNITY ENERGY (CCA)
Budget for FY 2023-2024
Staff Report – Item 1c
To: The Governing Board
From: Brad Koehn, Director of Finance and Administrative Services Item 1c: Adopt Resolution to Approve Employee Recruitment Incentive Program Date: 2/15/2024
RECOMMENDATION
Staff recommends the Board Adopt Resolution to Approve an Employee Recruitment Incentive Program.
BACKGROUND
Pioneer has 18 authorized positions, yet recruitment efforts have not always been successful in filling each of those positions. The energy business requires specialized knowledge and skill set and Pioneer must compete against other CCA’s and utilities for new hires in a competitive job market.
ANALYSIS & DISCUSSION
A Recruitment Incentive is a hiring tool that could make a difference and heighten the interest in Pioneer for a potential employee. It is also not uncommon that certain positions attract interest from candidates that are outside the region and an offer that includes an incentive may make that transition decision easier for a candidate.
STRATEGIC PLAN
A Recruitment Incentive Program is consistent with the Strategic Priority for Pioneer to be an Employer of Choice.
FISCAL IMPACT
Any Recruitment Incentive offer would be funded from existing budget appropriations and may not be a component of all job offers. There are currently 3 vacancies with an additional position vacancy in the beginning of March.
ATTACHMENTS
1) Resolution Employee Recruitment Incentive Program
Before the Governing Board of
Pioneer Community Energy
Resolution No.: ____________
The following Resolution was duly passed by the Governing Board of Pioneer Community Energy at a regular meeting held February 15, 2024, by the following vote on roll call:
Ayes:
Noes:
Absent:
Signed and approved by me after its passage.
______________________________
Chair of the Governing Board
Attest:
_______________________
Secretary
WHEREAS, the Energy business requires specialized knowledge and skill set; and WHEREAS, Pioneer’s recruitment efforts have not resulted in filling all of the Board approved staffing positions; and
WHEREAS, Recruitment efforts would benefit from incentives that would assist a new employee’s transition to Pioneer and may include, but are not limited to reimbursement of moving expenses, ‘broken’ lease expenses; signing bonus, and WHEREAS, Pioneer’s needs to be an attractive employer in a competitive job market where other utilities including other CCA’s are vying for similar skill sets; and WHEREAS,; the recruitment incentive would be funded from existing budget authority; and BE IT RESOLVED, the Governing Board of Pioneer Community Energy, State of California, hereby finds, declares, and resolves as follows:
1. The above recitals are true and correct.
2. Approve the Executive Director to offer a recruitment incentive in an offer of employment of up to $15,000.
3. This resolution shall take effect immediately.
In the matter of: Adopt Resolution to Approve
Employee Recruitment Incentive Program
Staff Report – Item 1d
To: The Governing Board
From: Don Eckert, Executive Director
Item 1d: Affirm Existing Committee Members through January 2025 Date: 2/15/2024
RECOMMENDATION
Affirm existing committee members of the Audit & Finance Committee, the Energy Procurement Review ad hoc Committee and the Expansion ad hoc Committee through January 2025.
BACKGROUND
At the February 17, 2022, Governing Board meeting, the Board approved Amendment No. 6 to the Pioneer Community Energy (“Pioneer”) Bylaws establishing procedures related to ad hoc and standing committees.
Section 5.2. Membership. The membership of any such committee shall be approved by the Governing Body by majority vote. Except as otherwise provided by the Governing Body, existing committee members shall be affirmed by the Governing Body each year at its February meeting, or as soon thereafter as in reasonably practicable, unless they provide advance notice to the Chairperson of the Authority that they desire to step down from the committee; they are otherwise removed or replaced by the Governing Body; or the committee is dissolved. The Governing Body may remove a committee member from a committee, with or without cause, by a majority vote. The Governing Body shall fill any vacancy in accordance with the provisions of these Bylaws.
ANALYSIS & DISCUSSION
Staff have not received notification that an existing committee member wishes to step down from their current assignment(s). The following table shows the current membership for Pioneer’s committees.
Audit & Finance Energy Procurement Review Expansion
Greg Janda, Rocklin
John Hidahl, El Dorado County
Gary Petersen, Nevada City
John Hidahl, El Dorado County
Greg Janda, Rocklin
Alice Dowdin Calvillo, Auburn
Jim Holmes, Placer County
Alice Dowdin Calvillo, Auburn
David Yarbrough, Placerville
STRATEGIC PLAN
The recommendation supports the Operational Excellence priority.
FISCAL IMPACT
There is no fiscal impact with the recommendation.
ATTACHMENTS
There are no attachments to this report.
Staff Report – Item 1e
To: The Governing Board
From: Don Eckert, Executive Director
Item 1e: Appoint Director Petersen to the Energy Procurement Review Committee and Appoint Director Ring to the Audit & Finance Committee
Date: 2/15/2024
RECOMMENDATION
Appoint Director Petersen to Pioneer Community Energy’s (“Pioneer”) Energy Procurement Review Committee to fill the vacancy created with the departure of Director Cortez and Director Ring to the Audit & Finance Committee to fill the vacancy with the departure of Director Andreatta.
BACKGROUND
Section 6E of Pioneer’s Joint Exercise of Powers Agreement states “The Board may establish any advisory commissions, boards, and committees as the Board deems appropriate to assist the Board in carrying out its functions and implementing the CCA Program, other energy programs, and the provisions of this Agreement which shall comply with the requirements of the Brown Act. The Board may establish rules, regulations, policies, bylaws or procedures to govern any such commissions, boards, or committees.”
ANALYSIS & DISCUSSION
Audit & Finance Committee
The purpose of the Audit & Finance Committee is to oversee the accounting and financial reporting process, the annual audit of Pioneer’s financial statements by the independent auditor, budgeting, rate-setting, monitor internal controls, review administrative policies, and oversee investment strategies. The Committee will meet a minimum of twice a year for the opening and closing of the financial audit but usually meets three to four times per year. The Committee reports to the Governing Board and is a Brown-Act meeting.
A vacancy was created with the change in role of Director Andreatta from primary to alternate with the Governing Board. The recommendation is the appointment of Director Ring from the Town of Loomis to the committee.
Director Ring brings a strong analytical background and is our new Board Member. With the addition of Director Ring to the committee, the table below shows the composition roster:
Composition Current Roster Member Agency
-4 Board Members
-Independent Auditor
-General Counsel
Greg Janda - Chair
John Hidahl – Vice Chair
Gary Petersen
David Ring
City of Rocklin
El Dorado County
Nevada City
Town of Loomis
Energy Procurement Review Ad Hoc Committee (“EPRC”)
The Executive Director is authorized to execute energy contracts greater than five (5) years in length (from contract execution date) subject to review and approval by the EPRC. Long-term power purchase agreements (“PPAs”) are periodically necessary to fulfill mandatory requirements (e.g., Renewables Portfolio Standard), and for portfolio optimization. The role of the EPRC is to review pending long-term PPAs or other significant energy procurement issues.
Agenda Item: 1e Agenda Date: 2/15/2024
A vacancy was created with the departure of Director Cortex from the Governing Board. The recommendation is the appointment of Director Petersen from Nevada City to the committee. Director Petersen brings strong financial acumen, has prior experience with Community Choice Aggregators, and represents our newest territory. With the addition of Director Petersen to the committee, the table below shows the composition roster:
Composition Current Roster Action Needed
-4 Board Members
-General Counsel
-Legal Consultant
specializing in long-term PPAs
John Hidahl - Chair
Greg Janda - Vice Chair
Alice Dowdin Calvillo
Gary Petersen
El Dorado County
City of Rocklin
City of Auburn
Nevada City
STRATEGIC PLAN
The recommendation supports the Operational Excellence priority.
FISCAL IMPACT
There is no fiscal impact with the recommendation.
ATTACHMENTS
There are no attachments to this report.
Staff Report – Item 1f
To: The Governing Board
From: Donald Eckert, Executive Director
Teresa Willock, Board Secretary
Item 1f: Conflict of Interest Code Amendment: Update and Next Steps Date: 2/15/2024
RECOMMENDATION
Receive update regarding the Conflict of Interest Code Amendment for Pioneer Community Energy as a Multi-County Agency; and, next steps for filing Form 700 - Statements of Economic Interests with the Fair Political Practices Commission.
BACKGROUND
The Political Reform Act (Government Code Section 81000, et seq.) requires state and local government agencies to adopt and publish Conflict of Interest Codes. The Conflict of Interest Code is intended to identify and disclose foreseeable disqualifying financial conflicts of interest for decision-makers within the agency and therefore provide transparency, as required by The Political Reform Act. Pursuant to the Fair Political Practices Commission (FPPC), which has the primary responsibility to oversee the administration of the Political Reform Act, this Code must be regularly updated to reflect the current structure of the agency.
On November 13, 2017, the Governing Board adopted Resolution 2017-11, establishing a Conflict of Interest Code for Pioneer Community Energy (Pioneer) in accordance with the Political Reform Act (Government Code section 81000 et seq.), which was approved by the Placer County Board of Supervisors.
On December 17, 2020, the Governing Board adopted Resolution 2020-25 approving Amendment No. 1 to the Amended and Restated Joint Exercise of Powers Agreement for Pioneer expanding Joint Powers Authority Membership pending California Public Utilities Commission (CPUC) certification of Addendum No. 1 to the Community Choice Aggregation Implementation Plan and Statement of Intent.
On December 17, 2020, the Governing Board also adopted Resolution 2020-26 approving Addendum No. 1 to the Community Choice Aggregation Implementation Plan and Statement of Intent and authorizing the Executive Director to Submit Addendum No. 1 to the CPUC.
On March 8, 2021, Pioneer received CPUC certification of Addendum No. 1 to the Community Choice Aggregation Implementation Plan and Statement of Intent, thus effectuating Amendment No. 1 to the Amended and Restated Joint Exercise of Powers Agreement for Pioneer expanding Joint Powers Authority Membership for unincorporated El Dorado County and City of Placerville.
On March 18, 2021, the Governing Board adopted Resolution 2021-10 approving the updated Conflict of Interest Code for Pioneer and to align with becoming a Multi-County Agency resulting from Governing Board actions for expansion beyond Placer County; and directed staff to implement necessary steps per California Code of Regulations Section 18750 and the FPPC pertaining to Statement of Economic Interests for officials and designated filers of a Multi-County Agency.
On April 15, 2021, Pioneer Community Energy initiated the process to be designated as a Multi-County Agency by the Fair Political Practices Commission (FPPC).
Agenda Item: 1f Agenda Date: 2/15/2024
On November 17, 2022, the Governing Board adopted Resolution 2022-26 approving Amendment No. 5 to the Amended and Restated Joint Exercise of Powers Agreement for Pioneer expanding Joint Powers Authority Membership pending CPUC certification of Addendum No. 2 to the Community Choice Aggregation Implementation Plan and Statement of Intent.
On November 17, 2022, the Governing Board also adopted Resolution 2022-27 approving Addendum No. 2 to the Community Choice Aggregation Implementation Plan and Statement of Intent and authorizing the Executive Director to submit Addendum No. 2 to the CPUC.
On February 27, 2023, Pioneer received CPUC certification of Addendum No. 2 to the Community Choice Aggregation Implementation Plan and Statement of Intent, thus effectuating Amendment No. 5 to the Amended and Restated Joint Exercise of Powers Agreement for Pioneer expanding Joint Powers Authority Membership for the cities of Grass Valley and Nevada City.
On October 20, 2023, the finalized Code Amendment was distributed to the Board Members and Designated Filers, initiating a 45-day Review Period ending on December 7, 2023.
On January 12, 2024, the FPPC completed their review and approved the Conflict of Interest Code Amendment for Pioneer Community Energy as a Multi-County agency with date effective as February 11, 2024.
ANALYSIS & DISCUSSION
As the Governing Board adopted Amendment No. 1 to the First Amended and Restated JPA for Membership expansion beyond Placer County, Pioneer became a Multi-County Agency and was required to align its Conflict of Interest Code in compliance with the FPPC process, implementing guidelines moving forward as a Multi-County agency.
Per the Board’s direction, On April 15, 2021, Pioneer initiated this process by remitting an amended Code to the FPPC for review. On July 26, 2022, Pioneer received the proposed Code Amendment with FPPC edits. Pioneer’s General Counsel conducted review, agreed with FPPC edits, and made no further updates.
The List of Designated Positions was then updated to include additional positions approved for Pioneer during this process as well as the FPPC’s addition of voting members serving on the Risk Oversight Committee.
Upon completion and FPPC approval of finalized edits regarding electronic filing to the FPPC, updating the List of Designated Filers, and updating the defined Disclosure Categories, the Code Amendment was approved on October 19, 2023, by Declaration of Chief Executive Officer Don Eckert.
The final Code Amendment was distributed to the Board and Designated Filers on October 20, 2023, initiating a 45-day Review Period ending on December 7, 2023, for which Pioneer received no questions or requests for public hearing.
Following the close of the 45-day Review Period, the FPPC approved the Conflict of Interest Code Amendment for Pioneer as a Multi-County Agency on January 12, 2024, with date effective as of 30 days following FPPC approval, being February 11, 2024.
Pioneer’s designation as a Multi-County Agency is complete and effective for all current and future member agencies.
NEXT STEPS
Per the FPPC-approved Code Amendment, “Officials and employees holding positions listed in this code must file their statements of economic interests electronically with the Fair Political Practices Commission…” Agenda Item: 1f Agenda Date: 2/15/2024
As of the Code Amendment effective date, February 11, 2024, all Form 700 – Statements of Economic Interests filing for Pioneer will move from the Placer County system to the FPPC system.
Board Members and Designated Filers for Pioneer will be receiving notification of “Leaving Office” (Pioneer positions only) from the Placer County system; and should remit that filing within 30 days as requested. As the Annual Statement covers year 2023, for which year filings for Pioneer were with Placer County, the Leaving Office statement will include your 2023 Annual Statement. This will conclude Pioneer’s filing activity with Placer County.
Likewise, all Board Members and Designated Filers for Pioneer will receive notification of “Assuming Office” (Pioneer positions only) from the FPPC system; and should remit that filing within 30 days as requested. The notification will provide your access and information regarding the electronic filing process for Pioner with the FPPC. Thus, will begin Pioneer’s filing activity with the FPPC for 2024 moving forward.
STRATEGIC PLAN
The recommendation supports the Operational Excellence priority.
FISCAL IMPACT
None.
ATTACHMENTS
1. Conflict of Interest Code Amendment_FINAL effective 021124
2. Conflict of Interest Code Amendment_At-a-Glance
1 Conflict of Interest Code of
PIONEER COMMUNITY ENERGY
A California Joint Powers Authority
The Political Reform Act (Government Code Section 81000, et seq.) requires state and local government agencies to adopt and promulgate conflict of interest codes. The Fair Political Practices Commission (FPPC) has adopted a regulation (2 California Code of Regulations Section 18730) that contains the terms of a standard conflict of interest code, which can be incorporated by reference in an agency's code. After public notice and hearing, the standard code may be amended by the FPPC to conform to amendments in the Political Reform Act. Therefore, the terms of 2 California Code of Regulations Section 18730 and any amendments duly adopted by the FPPC are hereby incorporated by reference. This regulation and the attached Appendices, designating positions and establishing disclosure categories, shall constitute the conflict of interest code of Pioneer Community Energy.
Officials and employees holding positions listed in this code must file their statements of economic interests electronically with the Fair Political Practices Commission. All statements must be made available for public inspection and reproduction under Government Code Section 81008.
Pioneer Community Energy
Appendix A
Designated Positions
Designated Employees Disclosure Category
Executive Director 1,2,3,4
General Counsel 1,2,3,4
Chief Operating Officer 1,2,3,4
Director of Finance and Administration 1, 2,3,4
Director of Public Affairs, Marketing, and
Programs
1,2,3,4
Legislative and Regulatory Manager 1,2,3,4
Power Resources Manager 1,2,3,4
Power Supply Contracts Manager 1,2,3,4
Risk Oversight Committee Members 1,2,3,4
Senior Manager-Quantitative Analysis &
Modeling
1,2,3,4
Manager-Quantitative Analysis & Modeling 1,2,3,4
Consultants/New Positions* *
*Consultants and new positions shall be included in the list of designated positions and shall disclose pursuant to the broadest disclosure category in the code subject to the following limitation:
With respect to consultants and new positions, the Executive Director may determine in writing that a particular consultant or new position is hired to perform a range of duties that is limited in scope and thus, is not required to comply with the disclosure requirements described in these categories. Such determination shall include a description of the consultant’s or new position’s duties and, based upon that description, a statement of the extent of disclosure requirements. The Executive Director’s determination is a public record and shall be retained for public inspection in the same manner and location of this conflict-of-interest code.
The following positions are not covered by the Conflict of Interest Code because they must file under Government Code Section 87200 and, therefore, are listed for informational purposes only:
Members of the Board of Directors
Members of the Board of Directors (Alternates)
An individual holding one of the above listed positions may contact the Fair Political Practices Commission for assistance or written advice regarding their filing obligations if they believe that their position has been categorized incorrectly. The Fair Political Practices Commission makes the final determination whether a position is covered by Government Code Section 87200.
Pioneer Community Energy
Appendix B
Disclosure Categories
Category 1:
Interests in real property of the type to be purchased or leased by Pioneer Community Energy.
Category 2:
Investments and business positions in business entities, and income, including receipt of gifts, loans and travel payments, from sources, that provide services, supplies, materials, machinery, or equipment of the type utilized by Pioneer Community Energy.
Category 3:
Investments and business positions in business entities, and income, including receipt of gifts, loans and travel payments, from sources that engage in the design, development, construction, sale, or the acquisition of facilities that generate electricity, including, wind, solar, geothermal, hydroelectric, ocean, garbage, and biomass.
Category 4:
Investments and business positions in business entities, and income, including receipt of gifts, loans and travel payments, from sources that are energy or environmental consultants, research firms, engineering firms, or entities that design, build, manufacture, sell, distribute or service equipment of the type that is utilized by electric power suppliers, including wind, solar, geothermal, hydroelectric, ocean, garbage, and biomass, or that is used by the federal, state, or local government or by private industry in research designed to refine or develop new methods of electrical power generation.
This is the last page of the conflict of interest code for the
CERTIFICATION OF FPPC APPROVAL
Pursuant to Government Code Section 87303, the conflict of interest code for the was approved on
This code will become effective on
_____________________________
Sukhi K. Brar
Assistant Chief Counsel
Fair Political Practices Commission
.
w
n .
Pioneer Community Energy
Pioneer Community Energy 1/12/23
2/11/24
Sukhdip Brar
Digitally signed by Sukhdip
Brar
Date: 2024.01.12 09:20:45
-08'00'
Conflict of Interest Code
Amendment:
Update & Next Steps
Board of Directors Meeting
February 15, 2024
General Update
• March 18, 2021: The Governing Board approved updates to the Conflict of Interest Code for Pioneer Community Energy (Pioneer); and to align with becoming a Multi-County Agency due to expansion beyond Placer County.
• April 15, 2021: Pioneer initiated the process to be designated as a Multi-County Agency by the Fair Political Practices Commission (FPPC). • October 20, 2023: The finalized Code Amendment was distributed to the Board Members and Designated Filers, initiating a 45-day Review Period ending on December 7, 2023.
• January 12, 2024: The FPPC approved the Conflict of Interest Code Amendment for Pioneer as a Multi-County Agency.
• February 11, 2024: Effective Date of Conflict of Interest Code Amendment for Pioneer as a Multi-County Agency.
• Pioneer’s designation as a Multi-County Agency is complete and effective for all current and future Member Agencies.
Code Amendments
• Officials and employees holding Designated Filer positions must file their Statements of Economic Interests electronically with the FPPC. • The List of Designated Positions has been updated to include additional positions approved for Pioneer during this process; as well as designating the position of voting members serving on the Risk Oversight Committee. • The Disclosure Categories have been updated to reflect direct correlation to the business of Pioneer.
Next Steps
• As of the Code Amendment effective date, February 11, 2024, all Form 700 – Statements of Economic Interests filings for Pioneer will move from the Placer County system to the FPPC system.
Placer County Notifications
• Board Members and Designated Filers for Pioneer will be receiving notification of “Leaving Office” (Pioneer positions only) as of February 11, 2024, from the Placer County system; and should remit that filing within 30 days as requested.
• As the Annual Statement covers year 2023, for which year filings for Pioneer were with Placer County, the “Leaving Office” statement will include your 2023 Annual Statement.
• This will conclude Pioneer’s filing activity with Placer County.
Next Steps
FPPC Notifications
• All Board Members and Designated Filers for Pioneer will receive notification of “Assuming Office” (Pioneer positions only), as of February 11, 2024, from the FPPC system; and should remit that filing within 30 days as requested.
• The notification will provide your access and information regarding the electronic filing process for Pioneer with the FPPC. • This will begin Pioneer’s filing activity with the FPPC for 2024 moving forward.
Thank you.
Staff Report – Item 2
To: The Governing Board
From: Donald Eckert, Executive Director
Item 2: Investment Grade Credit Rating
Date: 2/15/2024
RECOMMENDATION
Receive report on Pioneer Community Energy (“Pioneer”) receiving an investment grade credit rating from Standard & Poor’s Global Ratings (“S&P”) of A- with a long-term outlook of stable.
BACKGROUND
Staff contracted with PFM Advisors (“PFM”) in 2022 to primarily assist with the power prepay transaction but also included in scope was the eventual pursuit of an investment grade credit rating.
As Pioneer continues to make progress toward its cash reserve targets, staff engaged with PFM in Fall 2023 to begin the process of obtaining an investment grade credit rating with S&P. The process included meetings with S&P staff over the past four months.
ANALYSIS & DISCUSSION
Pioneer received an A- credit rating with a stable long-term outlook. This is beneficial to Pioneer is many ways including:
1. Power Supply Options – It is currently a developer market and developers will choose a credit-rated entity to satisfy their internal credit departments. Obtaining this rating provides more options for Pioneer resulting in better pricing and more favorable terms.
2. Non-Power Supply – The credit rating also shows the business community (e.g., bank) that Pioneer is fiscally responsible and stable. It provides confidence for our ratepayers and potential expansion partners.
3. Board and Staff – It gives the employees pride in their work being recognized and is affirmation the Board is making smart decisions.
STRATEGIC PLAN
The recommendation supports the Financial Stability & Strategic Growth priority.
FISCAL IMPACT
There is no fiscal impact with this report.
ATTACHMENTS
1. Report from S&P Global Ratings
Pioneer Community Energy,
California; Wholesale Electric
Primary Credit Analyst:
Alexandra Rozgonyi, Englewood + 1 (303) 721 4824; [email protected] Secondary Contact:
Doug Snider, Englewood + 1 (303) 721 4709; [email protected] Table Of Contents
Credit Highlights
Outlook
Credit Opinion
Enterprise Risk
Financial Risk
Related Research
WWW.STANDARDANDPOORS.COM/RATINGSDIRECT FEBRUARY 2, 2024 1 Pioneer Community Energy, California; Wholesale
Electric
Credit Profile
ICR
Long Term Rating A-/Stable New
Credit Highlights
• S&P Global Ratings assigned its 'A-' issuer credit rating (ICR) to Pioneer Community Energy (Pioneer), Calif. • The outlook is stable.
Security
The ICR represents our view of Pioneer's Community Choice Aggregator (CCA) capacity and willingness to meet its financial commitments as they come due, and does not apply to any specific financial obligation. Pioneer's CCA has approximately $6.6 million of unrated long-term debt outstanding as of fiscal 2023. The lender for this debt is Umpqua Bank. We do not view this loan as a contingent liquidity risk because we believe the risk of nonpayment is remote given the rating. However, we note that this loan could become a contingent liquidity risk should credit quality significantly deteriorate, as the bank loan agreement includes default provisions related to covenant requirements and a remedy of default that includes acceleration of debt.
Credit overview
Pioneer is a joint powers agency (JPA) formed in 2017 to procure retail electric commodity on behalf of about 158,000 electric customers across 10 members in El Dorado, Placer, and Nevada counties. The ICR reflects our view of Pioneer's protective joint powers authority agreements, the 84% participation rate of retail customers, and Pioneer's portfolio of diverse contracted low- and no-carbon-emitting resources through primarily medium-term fixed-price contracts. The rating further reflects our view of Pioneer's growing customer base, with two new members (Grass Valley and Nevada City) starting service in January 2024. Nevertheless, the expansion could add risk related to participation rates, power procurement, electric rate competitiveness, and costs.
Fixed-charge coverage (FCC) has risen to about 1.4x (fiscal 2023) from 1.05x (fiscal 2021), and unrestricted cash improved 125% since fiscal 2021 due to customer growth, a rate increase, and more recent elevated market price conditions, resulting in a more favorable power charge indifference adjustment (PCIA). Based on our analysis of management-provided projections, FCC is projected to be sustained between 1.2x and 1.3x through fiscal 2028, in line with the current rating level, due to a 15% rate increase in January 2024 and 5% annual rate increases through 2028.
Nevertheless, we believe Pioneer's rate-setting flexibility is somewhat limited given that customers could leave the CCA if rates become uncompetitive relative to those of Pacific Gas & Electric (PG&E).
The rating reflects our view of the following:
• Pioneer has a primarily residential customer base with robust income levels, enhancing revenue stability.
WWW.STANDARDANDPOORS.COM/RATINGSDIRECT FEBRUARY 2, 2024 2 • Pioneer has protective JPA member agreements with counties and municipalities that create economic barriers to exiting Pioneer, tempered by the relative ease with which retail customers can return to PG&E. • Pioneer has low-carbon-emitting and diverse power supply arrangements with a variety of counterparties, geographic locations, and storage capabilities.
• FCC has improved, and we expect it will remain sound during the outlook period given the recently approved rate increase, and further planned rate increases.
• Liquidity rose to about $60 million, or 131 days of operating expenses, and is projected to continue to rise above management's reserve policy (approved in 2021 to maintain 160 days' cash on hand). • Debt is amortizing rapidly as a result of prepayments, resulting in a manageable debt-to-capitalization ratio of 10% for fiscal 2023, and the CCA has no plans to issue debt. If it were to issue debt, we would revisit this assessment, as well as any potential exposure if debt was for assets that could be exposed to wildfire liability.
Partly offsetting the above strengths, in our view, are the following:
• Power supply contracts are largely short- and medium-term, and Pioneer needs to add power to serve new members. Together, these expose Pioneer to variability in future contract prices. • Upon expansion into El Dorado County, the utility did not gain as many customers as it has gained elsewhere, leading to a lower overall participation rate of 84% in 2023 from 90% in 2019. Although the overall participation rate is generally sound, a weak growth rate could signal a less stable customer base and, in turn, less predictable revenues.
• FCC is projected to average above 1.2x (fiscal 2024-2028) given the approved 15% rate increase in January 2024 and the assumed, but not yet board-approved, 5% annual rate increases through 2028. FCC could be pressured if power purchase costs exceed projections and the time and sizing of rate increases differ from projections. • Pioneer faces indirect exposure to wildfire risk because it relies on PG&E's transmission and distribution assets, although Pioneer does not have direct asset ownership, which tempers the potential wildfire exposure compared to other asset-owning utilities. PG&E's need to fund wildfire liabilities or mitigation could lead it to socialize these costs among all users of its transmission and distribution systems. In turn, higher delivery charges could negatively affect overall rate affordability, and limit Pioneer's ability to increase rates without precipitating demand deterioration.
Environmental, social, and governance
We believe Pioneer's exposure to climate transition risk is low because of its predominantly carbon-free resource portfolio that limits the potential for regulatory costs and positions the CCA well for California's renewable portfolio standard. In 2022, Pioneer's fuel mix of its base service was 44.1% eligible renewables, 1.3% large hydro, 27.6% nuclear, and 27.0% unspecified. We believe Pioneer's current and projected energy portfolio positions the utility favorably relative to California's stringent and continually evolving regulatory landscape.
We believe Pioneer faces slightly elevated social risk. Although residential rates are below those of PG&E, we note that PG&E's rates are elevated (137.9% of California's average retail system rate in 2022), which could weigh on financial flexibility. Following stronger-than-expected U.S. economic growth through the third quarter of 2023, S&P Global Economics believes that recent business and consumer activity are not sustainable and projects slowing economic activity along with tepid economic growth of 1.5% in 2024 and 1.4% in 2025, which could further pressure Pioneer's WWW.STANDARDANDPOORS.COM/RATINGSDIRECT FEBRUARY 2, 2024 3 Pioneer Community Energy, California; Wholesale Electric delinquencies. (See "Economic Outlook U.S. Q1 2024: Cooling Off But Not Breaking," published Nov. 27, 2023, on RatingsDirect.) Furthermore, although inflation has likely peaked, S&P Global Economics projects elevated interest rates through much of 2024. The combination of delinquent consumer, credit card, and auto loans, along with October's resumption of student loan payments and drawdowns of household savings garnered during the pandemic, will likely compound the financial pressures facing consumers. Consequently, we are monitoring the strength and stability of CCAs' revenue streams for evidence of delinquent payments or other revenue erosion.
We view risk management, culture, and oversight factors as credit supportive, as they include robust joint powers agreements with members, full rate-setting autonomy, comprehensive financial and hedging policies, and a sophisticated management team. However, the potential for retail customer opt-out is beyond management's control and tempers our view of governance factors.
Outlook
The stable outlook reflects our anticipation that Pioneer's diverse and generally affluent territory will support the recently adopted rate increase and future rate increases to maintain at least 1.2x FCC. The outlook further reflects our expectation that Pioneer will execute on its power supply plan by increasing long-term contracts and reducing exposure to increasingly stringent emissions regulations and competitive potentially volatile wholesale markets.
Downside scenario
We could lower the rating if the cost of future power, storage, delivery, and/or capacity constrains Pioneer's ability to maintain FCC of at least 1.2x, if liquidity does not rise as projected, or if Pioneer's rate affordability meaningfully erodes. We could also lower the rating if Pioneer experiences customer opt-outs that leave it with meaningful surplus energy purchase commitments whose cost must be recovered through either liquidation into competitive wholesale markets or rate increases.
Upside scenario
Based upon our analysis of management's forecast, we expect FCC to be maintained at levels in line with the current rating level, so we do not anticipate raising the rating during the outlook period.
Credit Opinion
Enterprise Risk
Pioneer CCA
Pioneer was formed to provide clean and renewable power to its members at a competitive cost, while also generally reducing greenhouse gas emissions and stimulating the local economy. Pioneer provides service as a CCA under the California Public Utilities Code Section 366.2. Under the code, all of the incumbent investor-owned utilities' customers automatically become Pioneer customers, but have the option to opt out and return service to the previous provider, PG&E. Importantly, Pioneer does not own, operate, or maintain any of the generation, transmission, or distribution infrastructure used to serve its customers. However, management must procure electricity supply and balance the WWW.STANDARDANDPOORS.COM/RATINGSDIRECT FEBRUARY 2, 2024 4 Pioneer Community Energy, California; Wholesale Electric obligation to enter into contracts for long-term power supply volumes and a potentially fluid customer base that could migrate during the tenure of the CCA's commitments to purchase power.
A municipal or county member can depart the CCA with six months' notice; however, the JPA contracts stipulate that a departing member must make the CCA whole for any PPAs signed prior to its departure. (Ratepayers are not subject to this clause, lowering the barrier for individual customers switching providers.) Although this remains untested in court, each member agreed to this stipulation before joining the CCA, and we believe the exit fee serves as a disincentive to member communities to terminate their contracts with Pioneer.
Growing, primarily residential, and diverse customer base In our opinion, the primarily residential customer base and diverse leading 10 customers provide revenue stability. We view the weighted average income, based on the number of customers served in each member's territory and their respective income levels, to be robust at 132% of the national average. Nevertheless, we note that the incomes of the two new members, Nevada City and Grass Valley, are much lower at 81.0% and 70.5%, respectively, which may indicate more price sensitivity among these communities. Pioneer is projecting a 6% increase in load and a 90% participation rate as a result of more proactive outreach and communication. The price sensitivity of Pioneer's customers is an especially important consideration considering customers can opt out of the CCA at any time.
Competitive electric rates compared with PG&E's, projected to remain 10% below PG&E's in 2024 but higher than the state average
Pioneer's rates are lower than PG&E's due partly to competitive market prices and the lower PCIA in 2023 and projected for 2024. Pioneer increased rates by 15% in January 2024 given PG&E's rate increase. As a result, rate affordability will weaken, but rates will remain competitive with PG&E's, at about 10% below PG&E's rates. For 2022, based on the most recently available Energy Information Administration (EIA) PG&E rates were 132% of the state average and Pioneer's 15% below that. While future rates are expected to remain competitive with PG&E's, they are still high relative to the state. We understand management's strategy is to increase rates when needed while maintaining competitiveness with PG&E. Management reviews the need for rate increases annually.
Diverse renewable power supply through various PPAs and counterparties, albeit largely through medium-term contracts, with robust and transparent financial and operational policies Pioneer's power supply is diverse in terms of both counterparties (no supplier provides more than 35% of total energy needs for 2023 and 2024) and fuel mix. About 44% of Pioneer's power supply is made up of eligible renewable resources, and Pioneer is currently meeting all state renewable portfolio standards. Pioneer's contract power supply consists of primarily fixed-price energy products, largely medium-term contracts (one to 10 years) at 75%, long-term contracts (10+ years) at 18%, and short-term contracts (up to one year) at 7%. Pioneer was 100% hedged in 2023 and is also 100% hedged for 2024, which we view positively; nevertheless, we believe the large percentage of short- and medium-term contracts could present barriers to securing commodity prices at reasonable prices, which could lead to unbudgeted costs that could diminish FCC and/or liquidity.
In our opinion Pioneer's expansion policy, investment, reserve, debt, and risk management policies are credit supportive. Pioneer's energy risk policy has credit guidelines consider concentration risk and requires development and operational collateral deposits for all power purchase agreements, which limits the risk of counterparty nonperformance. In our opinion, having a formalized policies support long-term financial and operational planning to WWW.STANDARDANDPOORS.COM/RATINGSDIRECT FEBRUARY 2, 2024 5 Pioneer Community Energy, California; Wholesale Electric mitigate financial and power supply exposure.
Financial Risk
Sound FCC projected to remain supportive of credit quality due to planned annual rate increases to offset rising power purchase costs
FCC, our internally adjusted debt service coverage metric that that treats fixed costs associated with purchased power as debt service rather than an operating expense, has improved during the past three fiscal years, averaging about
1.25x (fiscal 2021-2023). In our opinion, this shows sufficient cost recovery. Based on our analysis of management-provided projections dated Jan. 11, 2024, FCC is projected to stay within a band of 1.2x to 1.3x through fiscal 2028, a range that is supportive of the current rating level. These projections include the 15% rate increase in January 2024 and a projected, but not yet approved, 5% annual increase in January of each year. If the board is reluctant to set rates to recover costs, resulting in metrics similar to the forecast, this could pressure our opinion of the rating.
Growing liquidity position projected to remain robust, supported by lines of credit designated for collateral postings
Pioneer's liquidity is sufficient relative to the operating risks its faces as a CCA. Namely, the utility faces inherent risks associated with customer retention, rate-setting, and power supply procurement, which necessitate a higher level of reserves. Based on our internal calculations, as of fiscal 2023, unrestricted cash was also at about $60 million, or about 131 days of operating expenses, which on a nominal basis is lower than that of higher-rated peers. The above figure does not include the additional approximately $30 million of lines of credit that are designated for collateral postings.
We believe that the additional liquidity would mitigate a potential collateral call, which we view as credit supportive.
Our analysis of management provided projections provided Jan. 11, 2024, shows unrestricted cash will increase to over 180 days starting in fiscal 2024 and rise further thereafter. Nevertheless, these metrics could be weaker if rate increases are not implemented as planned or power costs rise above forecast.
Rapidly amortizing debt with no future debt plans
The debt-to-capitalization ratio is manageable at 10% for fiscal 2023, which we understand management plans to rapidly amortize through prepayments by 2026. Management indicated that there are no future debt plans at this time, and given the planned rapid amortization and lack of future debt plans, leverage is not a current credit risk for Pioneer.
Pioneer Community Energy, California--key credit metrics --Fiscal year ended June 30--
2023 2022 2021
Operational metrics
Electric customer accounts 158,000 154,000 92,545
% of electric retail sales from residential customers 57 57 57 Top 10 electric customers' sales as % of total electric retail sales 8 8 13 Service area median household effective buying income as % of U.S. 132 132 135 Financial metrics
Gross revenues ($000s) 200,574 116,566 81,930
WWW.STANDARDANDPOORS.COM/RATINGSDIRECT FEBRUARY 2, 2024 6 Pioneer Community Energy, California; Wholesale Electric Pioneer Community Energy, California--key credit metrics (cont.) --Fiscal year ended June 30--
2023 2022 2021
Total operating expenses less depreciation and amortization ($000s) 164,172 103,608 79,467 Debt service ($000s) 1,183 1,044 550
Debt service coverage (x) 29.9 12.4 4.5
Fixed-charge coverage (x) 1.4 1.2 1.1
Total available liquidity ($000s)* 58,776 27,467 25,949 Days' liquidity 131 97 119
Total on-balance-sheet debt ($000s) 8,899 11,632 12,207 Debt-to-capitalization (%) 11 24 31
*Total available liquidity includes available committed credit line balances, where applicable. Debt service coverage--Revenues minus expenses divided by debt service. Fixed-charge coverage--Sum of revenues minus expenses minus total net transfers out plus capacity payments (or their proxy), divided by the sum of debt service plus capacity payments (or their proxy). N.A.--Not available.
Related Research
Through The ESG Lens 3.0: The Intersection Of ESG Credit Factors And U.S. Public Finance Credit Factors, March 2, 2022
WWW.STANDARDANDPOORS.COM/RATINGSDIRECT FEBRUARY 2, 2024 7 Pioneer Community Energy, California; Wholesale Electric WWW.STANDARDANDPOORS.COM/RATINGSDIRECT FEBRUARY 2, 2024 8 STANDARD & POOR’S, S&P and RATINGSDIRECT are registered trademarks of Standard & Poor’s Financial Services LLC.
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Staff Report – Item 3
To: The Governing Board
From: Don Eckert, Executive Director
Item 3: Adopt Resolutions Commending Director Andreatta and Director Cortez for their Dedicated Service to Pioneer Community Energy
Date: 2/15/2024
RECOMMENDATION
Adopt Resolutions commending Director Andreatta and Director Cortez for their dedication and outstanding service in directing Pioneer Community Energy (“Pioneer”).
BACKGROUND
As a Councilmember for the Town of Loomis, Director Cortez served as a Director on the Pioneer Community Energy Governing Board beginning January 2023 and has served in that role through January 2024. Director Cortez also served on the Energy Procurement ad hoc Committee.
As a Councilmember for the City of Lincoln, Director Andreatta served as a Director on the Pioneer Community Energy Governing Board beginning February 2023 and has served in that role through January 2024. Director Andreatta was then appointed as the Alternate Director beginning in February 2024. Director Andreatta also served on the Audit & Finance Committee.
ANALYSIS & DISCUSSION
Director Andreatta and Director Cortez have demonstrated outstanding commitment, representation, and leadership for Pioneer and its ratepayers.
STRATEGIC PLAN
The recommendation supports the Local Engagement Priority.
FISCAL IMPACT
There is no fiscal impact with the recommendation.
ATTACHMENTS
1. Resolution commending Director Cortez
2. Resolution commending Director Andreatta
Before the Governing Board of
Pioneer Community Energy
Resolution No.: ____________
The following Resolution was duly passed by the Governing Board of Pioneer Community Energy at a regular meeting held February 15, 2024, by the following vote on roll call:
Ayes:
Noes:
Absent:
Signed and approved by me after its passage.
______________________________
Chair of the Governing Board
Attest:
_______________________
Secretary
WHEREAS, Pioneer Community Energy is a Community Choice Aggregation Program serving the cities of Auburn, Colfax, Grass Valley, Lincoln, Nevada, City, Rocklin, and Placerville, the town of Loomis, and unincorporated Placer and El Dorado County; and WHEREAS, Town of Loomis Councilmember Amanda Cortez became a Director on the Pioneer Community Energy Governing Board beginning January 2023; and WHEREAS, Amanda Cortez has served on the Energy Procurement Review ad hoc Committee of Pioneer Community Energy beginning February 2023; and WHEREAS, Amanda Cortez has provided outstanding leadership, representation, and guidance for the ratepayers and staff of Pioneer Community Energy.
BE IT RESOLVED, the Governing Board of Pioneer Community Energy, State of California, hereby finds, declares, and resolves as follows:
1. The above recitals are true and correct.
2. The Governing Board hereby commends Amanda Cortez for her dedication and outstanding public service in directing Pioneer Community Energy.
3. This Resolution shall take effect immediately upon its adoption.
In the matter of: Resolution in Appreciation
of Director Amanda Cortez for Outstanding
Service to Pioneer Community Energy
Before the Governing Board of
Pioneer Community Energy
Resolution No.: ____________
The following Resolution was duly passed by the Governing Board of Pioneer Community Energy at a regular meeting held February 15, 2024, by the following vote on roll call:
Ayes:
Noes:
Absent:
Signed and approved by me after its passage.
______________________________
Chair of the Governing Board
Attest:
_______________________
Secretary
WHEREAS, Pioneer Community Energy is a Community Choice Aggregation Program serving the cities of Auburn, Colfax, Grass Valley, Lincoln, Nevada, City, Rocklin, and Placerville, the town of Loomis, and unincorporated Placer and El Dorado County; and WHEREAS, City of Lincoln Councilmember Holly Andreatta became a Director on the Pioneer Community Energy Governing Board beginning February 2023; and WHEREAS, Holly Andreatta has served on the Pioneer Community Energy Audit & Finance Committee beginning February 2023; and
WHEREAS, Holly Andreatta began serving as Alternate Director on the Pioneer Community Energy Governing Board beginning February 2024; and
WHEREAS, Holly Andreatta has provided outstanding leadership, representation, and guidance for the ratepayers and staff of Pioneer Community Energy.
BE IT RESOLVED, the Governing Board of Pioneer Community Energy, State of California, hereby finds, declares, and resolves as follows:
1. The above recitals are true and correct.
2. The Governing Board hereby commends Holly Andreatta for her dedication and outstanding public service in directing Pioneer Community Energy.
3. This Resolution shall take effect immediately upon its adoption.
In the matter of: Resolution in Appreciation
of Director Holly Andreatta for Outstanding
Service to Pioneer Community Energy
Staff Report – Item 4
To: The Governing Board
From: Paige Garcia, Programs Manager
Item 4: Adopt Resolution Approving and authorizing the Executive Director to execute any and all documents and agreements with Participate.Energy LLC and Tesla for program services
Date: 2/15/2024
RECOMMENDATION
Adopt a resolution approving and authorizing the Executive Director to execute any and all documents and agreements with Participate. Energy LLC and Tesla for program services.
BACKGROUND
At the May 25, 2023, Governing Board Meeting, the Board reviewed the Proposed Fiscal Year 2023-24 Operating Budget and provided direction to focus on Programs that serve the residential sector.
At the June 15, 2023, Governing Board Meeting, the Board adopted the Fiscal Year 2023-24 Operating Budget that included $2 million of Programs funding.
At the October 19, 2023 Governing Board Meeting, the Board received a presentation on the solar-plus-storage program. The Board requested additional information and sample cases to show how the program would benefit Pioneer customers.
ANALYSIS & DISCUSSION
Staff had prior knowledge of Participate.Energy through their efforts with other Community Choice Aggregators (“CCAs”) and asked Participate.Energy to make a presentation to the Board in October of 2023. At this Board meeting, staff was given direction to return to the Board with additional information on how the program would be implemented for Pioneer customers.
Participate.Energy/Tesla have partnered with the following CCAs in Southern CA for the residential solar plus battery Distributed Microgrids program:
• Lancaster Energy
• Clean Energy Alliance
• San Jacinto Power
• RMEA (Rancho Mirage Energy Authority)
• Pomona Choice Energy
• PRIME (Pico Rivera Innovative Municipal Energy)
• Apple Valley Choice Energy
• EPIC (Energy for Palmdale’s Independent Choice)
Participate.Energy/Tesla provide the Distributed Microgrids program to CCAs across California. They, with the CCAs, provide behind-the-meter solar plus battery storage microgrids to homeowners at no upfront cost to the customer. The CCA offers the microgrid to their customers, to ensure customer retention and to create the most savings and benefits for the customer. Participate.Energy pays Tesla for the costs to install the microgrid and maintain it over the next 30 years (Participate.Energy owns the solar plus battery microgrid). Pioneer enters Agenda Item: 4 Agenda Date: 2/15/2024
a 25-year PPA with Participate.Energy to buy the energy created by the solar plus battery microgrid and charges the customer through the PG&E bill. The customer does not pay any costs upfront and receives the benefit of having solar plus battery storage for their home with the ease of monthly payments to Pioneer through their existing bill. Customer benefits include:
• $0 upfront costs to homeowner for a solar + battery microgrid • Customer gets the lowest $/kWh energy price available in the market • Long-term customer pricing stability locked in for up to 30 years (1.9% solar escalator & 0% battery escalator)
• Customer significantly protected from rising PG&E delivery rates • Available to all Pioneer customers and easily transferrable to next home buyer • No operational and maintenance costs to customer
• Up to 125% on-site renewable energy + whole home battery backup power (lights stay on when PG&E grid is down)
• Non-exclusive (this is just another Pioneer customer option – customers not required to sign up)
STRATEGIC PLAN
The recommendation supports the Local Engagement and Quality in Service priorities.
FISCAL IMPACT
If the Board provides direction to move forward with Participate.Energy, Pioneer will enter into a 25-year PPA with Participate.Energy, subject to final negotiation/approval of all program contracts by staff.
ATTACHMENTS
1) Resolution Approving and authorizing the Executive Director to execute any and all documents and agreements with Participate.Energy LLC and Tesla for program services. 2) Overview of how a Pioneer offered solar + battery microgrid program compares to market PPA solar plus battery offer that 3rd party solar companies make to Pioneer customers.
Before the Governing Board of
Pioneer Community Energy
Resolution No.: ____________
The following Resolution was duly passed by the Governing Board of Pioneer Community Energy at a regular meeting held February 15, 2024, by the following vote on roll call:
Ayes:
Noes:
Absent:
Signed and approved by me after its passage.
______________________________
Chair of the Governing Board
Attest:
_______________________
Secretary
WHEREAS, this Resolution Approving and Authorizing the Executive Director to finalize negotiations and execute any and all documents and agreements with Participate.Energy LLC for Program Services has been brought before the Governing Board; and WHEREAS, competitive solicitation requirement is hereby dispensed and a sole source procurement with Participate.Energy LLC is justifiably in the best interest of Pioneer for the following reasons:
• Participate.Energy has contracts with 8 additional CCAs for similar programs. • The Participate.Energy program model is made specifically for CCAS, so there is no similar program model available from other vendors.
• Participate.Energy has co-developed thousands of battery projects with Tesla. • Participate.Energy has successful programs already launched in California. • Participate.Energy has experience working with Pioneer’s data vendor, allowing for easier program development.
BE IT RESOLVED, the Governing Board of Pioneer Community Energy, State of California, hereby finds, declares, and resolves as follows:
1. The above recitals are true and correct.
In the matter of: A Resolution Approving and
Authorizing the Executive Director to Execute
any and all documents and agreements with
Participate.Energy LLC and Telsa for Program
Services
Resolution 2024- ___
February 15, 2024
2 2. The Governing Board hereby authorizes the Executive Director to finalize negotiations and execute any and all documents and agreements with Participate.Energy LLC for Program services, pursuant to the terms described in the staff report and staff presentation associated with this item, for program services beginning on March 1, 2024, subject to approval by General Counsel.
3. This Resolution shall take effect immediately upon its adoption.
Exhibit A: Program Management Agreement with Participate.Energy LLC.
Exhibit B: Program Support Agreement with Participate.Energy LLC.
Exhibit C: Framework Program Agreement with Participate.Energy LLC and Tesla
PROGRAM MANAGEMENT AGREEMENT
This Program Management Agreement (this “Agreement”) dated effective as of [___________, 2023], (the “Effective Date”) is by and between [CCA NAME], [JURISDICTION AND TYPE], [D/B/A] (“Program Manager”), and Participate.Energy LLC, a Delaware limited liability company (the “Owner”). The parties hereto are sometimes herein referred to individually as a “Party” and collectively as the “Parties”.
RECITALS
A. Program Manager, Owner and Tesla, Inc. (“Installer”) have entered into certain agreements for the creation of a distributed solar and energy storage program for residential electricity customers in Program Manager’s service territory (the “Program”). Under the terms of the Program, Owner will develop, finance, and own residential solar and energy storage systems to be located at private residences within Program Manager’s service territory (each a “System” or, collectively, the “Systems”), Installer will install the Systems under an installation contract between Installer and Owner (“Installation Contract”), and Program Manager will buy from Owner the energy and certain energy attributes and benefits generated by each System under the terms of a certain power purchase agreement between the Parties of even date herewith (the “Power Purchase Agreement”).
B. Owner does not independently maintain the internal capability to perform the Program Management Services (as defined below) that Owner requires in connection with the installation of the Systems, and Program Manager’s capabilities are expected to provide significant benefits to Owner. Therefore, Owner desires to engage Program Manager to manage certain aspects of the System permit management, Installer communication, and origination of potential customers in Program Manager’s service territory, all as further set forth herein (the “Program Management Services”).
C. In consideration of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the sufficiency and adequacy of which are hereby acknowledged, the Parties agree to the following:
AGREEMENT
In consideration of the above recitals, the premises and mutual covenants set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:
1. Appointment and Term; Assumption of Development Responsibilities; Standard of Performance. Owner hereby appoints Program Manager to render the Program Management Services as further described in the Schedule of Program Management Services attached hereto as Exhibit A. Program Manager hereby accepts such appointment. The term of this Agreement shall be co-terminus with the term of the Power Purchase Agreement (“Term”).
Program Manager shall use such diligence, care and prudence in the performance of its obligations hereunder as are commercially reasonable, and shall devote such time, effort and skills of its 2 personnel as a reasonable service Program Manager in like position would do in like circumstances.
2. Limitations and Restrictions. Notwithstanding any provisions of this Agreement, Program Manager shall not take any action, expend any sum, make any decision, give any consent, approval or authorization, or incur any obligation with respect to any of the following matters unless and until the same has been approved by Owner:
(a) alteration of any System contemplated by the Installation Contract, except for such matters as may be expressly delegated in writing to Program Manager by Owner; (b) any proposed change in the installation of a System, or in the plans and specifications therefor as previously approved by Owner, that increases the cost thereof, or any other change that would affect the design, cost, value or quality of any of a System, except for such matters as may be expressly delegated in writing to Program Manager by Owner.
3. Standard of Conduct.
a) Program Manager shall provide the Program Management Services, perform its other obligations and exercise its rights or powers under this Agreement in a prudent manner, with the degree of skill and judgment normally exercised by Program Managers performing Program Management Services for the permitting of systems of a similar nature, and in accordance with: (i) any applicable laws and regulations; and (ii) any agreement, instrument or other document to which Owner is a party, and that Owner has delivered to Program Manager, that relates to a System or any component thereof (“Project Documents”), except to the extent Owner provides Program Manager with written instructions not to do so in the event Owner is contesting in good faith the validity or application of any such applicable laws and regulations or such term and condition of a System Document, in any reasonable manner. b) Program Manager may, at any time, if it reasonably considers it to be necessary or appropriate, request written instruction from Owner with respect to any matter contemplated by this Agreement and may defer action thereon pending the receipt of such written instructions.
c) Program Manager shall advise Owner promptly, if it becomes aware of any material inconsistency between any of the following:
(i) Owner’s instructions given in accordance with this Agreement from time to time;
(ii) any System Document;
(iii) Required insurance (if any); and
(iv) any applicable laws and regulations or Permit.
d) Any action taken by Program Manager in accordance with the written instructions of Owner, or failure to act pending the receipt of such written instructions, shall be 3 deemed to be within the scope of Program Manager’s authority and in accordance with its obligations under this Agreement and, without limitation, shall not constitute gross negligence or willful misconduct as referred in Section 10(b).
4. Accounts and Records.
(a) Program Manager, shall keep such books of account and other records relating to each System as may be required by applicable laws and regulations or as reasonably requested by Owner in writing. All accounts and records relating to a System, including all correspondence, shall be surrendered to Owner upon demand without charge therefor. (b) All books and records prepared or maintained by Program Manager shall be kept and maintained at all times at secure locations accessible to Owner for audit, inspection and copying by Owner or any representative or auditor therefor or supervisory or regulatory authority upon reasonable written request.
(c) During the Term, Program Manager shall keep Owner reasonably informed as to the status of the Program Management Services provided by Program Manager. Program Manager shall notify Owner in writing of any material event related to the Program Management Services provided by Program Manager hereunder.
5. Accrual Schedule. The Program Management Agreement Fee (as defined below) shall be earned in full for a System when a System is placed in service for purposes of Sections 48 and 168 of the Internal Revenue Code, as amended, and shall be paid promptly when a System has reached final completion under the terms of the respective Installation Contract (collectively, “Final Completion”).
6. Compensation. As consideration for Program Manager’s Program Management Services to be performed under this Agreement, Owner will pay Program Manager a fee (the “Program Management Agreement Fee”) equal to Forty U.S. Cents ($0.40) multiplied by each Watt/dc of solar generating capacity for each System that has reached Final Completion and for which Program Manager has confirmed in a legally binding manner that such System will be covered under the Power Purchase Agreement for the term thereof. The Program Support Services Fee shall become due and payable on a quarterly basis, not later than the thirtieth (30th) day after the end of each calendar quarter during the Term.
4 7. Default and Remedies. If Program Manager defaults in the performance of any of its material covenants or obligations under this Agreement and such default continues unremedied for a period of 30 days after written notice thereof from Owner to Program Manager, Owner shall have the right, at its election, to exercise one or more of the following rights and remedies; provided, however, if the default is of such a nature that it cannot be cured within the 30-day period, and Program Manager has begun to cure each default within the 30-day period, Program Manager shall have an additional 60 days in which to cure said default provided it acts in good faith and with due diligence to cure the same (all of which shall be cumulative); provided, further, however, that a default under any agreement with a contractor, subcontractor, engineer or equipment Program Manager for a System, or a delay due to action or inaction by the utility shall not be deemed a default under the Agreement:
(a) terminate this Agreement; and
(b) enforce the provisions of this Agreement by legal proceedings for the specific performance of any covenant or agreement contained herein or for the enforcement of any other appropriate legal or equitable remedy and recover damages caused by any breach by Program Manager of the provisions of this Agreement, including court costs, reasonable attorneys’ fees and other expenses incurred in the enforcement of the obligations of Program Manager hereunder; and (c) exercise any and all rights and remedies that Owner (or its Members) may have under applicable laws and regulations; and
(d) in addition to any rights now or hereafter granted under applicable laws and regulations and not by way of limitation of any such rights, upon the occurrence of any event of default hereunder that is not cured within the time period specified in this Section 7, Owner is authorized to set off and to apply any amounts payable to Program Manager hereunder against and on account of the obligations of Program Manager to Owner hereunder.
8. Indemnity and Liability
(a) Limitation of Liability.
(i) Notwithstanding any provision in this Agreement to the contrary, neither Party, nor their respective Affiliates, nor any of their respective officers, directors, employees, agents, contractors, subcontractors, vendors, shareholders, members, partners or representatives, shall be liable hereunder for any consequential or indirect loss or damage, including loss of profit, cost of capital, loss of goodwill or any other special or incidental damages, it being understood that the Parties’ indemnification obligations under this Section 8 are not and shall not be deemed to be consequential or indirect loss or damage under this Section 8. (ii) Except as provided in this Section 8, Program Manager shall have no liability hereunder to Owner for damages or other amounts in connection with a breach by Program Manager of this Agreement or a failure by Program Manager to perform the Program Management Services in accordance with the terms and conditions hereof or otherwise as a result of the Program Management Services performed by Program Manager pursuant to this Agreement. 5 (iii) The Parties further agree that the waivers and disclaimers of liability, indemnities, releases from liability, and limitations on liability expressed in this Agreement shall survive termination or expiration of this Agreement, and shall apply at all times, whether in contract, equity, tort or otherwise, even in the event of the fault, negligence, including sole negligence, strict liability, or breach of the Party indemnified, released or whose liabilities are limited, and shall extend to the partners, members, principals, shareholders, directors, officers, employees and agents of each Party and its Affiliates.
(b) Indemnity. To the extent it may lawfully do so, each of Program Manager and Owner hereby indemnify, defend (with counsel of its choosing), and hold harmless the other party and its directors, agents, officers, members, employees and volunteers from and against any and all liability or claim of liability, loss or expense, including defense costs and legal fees and claims for damages of whatsoever character, nature and kind, whether directly or indirectly arising from or connected to: bodily injury, death, personal injury, or property damage caused by negligence, creation or maintenance of a dangerous condition of property, or intentional infliction of harm, including any workers’ compensation suits, liability, or expense, arising from or connected with Program Management Services performed by on behalf of the indemnifying party by any person pursuant to this Agreement; nonpayment for labor, materials, appliances, teams, or power, performed on, or furnished or contributed to the Site. Notwithstanding the above, neither Program Manager nor Owner shall be required to defend, indemnify and hold harmless the other for such other party’s negligent acts and omissions or willful misconduct. It is the intent of the Parties that where negligence is determined to have been joint or contributory, principles of comparative negligence will be followed, and each Party shall bear the proportionate cost of any loss damage, expense or liability attributable to that Party’s negligence.
9. Notices. Any notice, request, demand or other communication which is required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given:
(i) on the date of receipt by the applicable Party if personally delivered; (ii) when transmitted by the applicable Party if transmitted by telecopy, electronic mail, or other digital transmission method, subject to the sender’s facsimile machine receiving the correct answerback of the addressee and confirmation of uninterrupted transmission by a transmission report or the recipient confirming by telephone to sender that he has received the facsimile or electronic mail message; and (iii) when received by the applicable Party, if sent for next day delivery to a domestic address by recognized overnight delivery service or, if sent by certified or registered mail, return receipt requested.
Notices shall be given:
If to Owner, to:
Participate.Energy LLC
2093 Philadelphia Pike #3125,
Claymont, DE 19703.
Attn: Ethan Friedman
Phone: 917-301-2621
Email: [email protected]
6 If to Program Manager, to:
[FILL IN]
10. General Provisions.
(a) No Agency Relationship. This Agreement does not create an agency relationship between the Parties and does not establish a joint venture or partnership between the parties. Except as expressly set forth herein, neither party has the authority to bind the other party or represent to any person that the party is an agent of the other party. (b) Agreement. This Agreement consists of the terms and conditions set forth herein, as well as the appendices hereto, which are incorporated by reference herein and made part hereof.
In the event of a conflict, variation or inconsistency between the appendices hereto and the terms and conditions contained in the body of this Agreement, the latter shall control and be given priority.
(c) Relationship of the Parties.
(i) Program Manager has been retained by Owner as an independent contractor to solely perform the Program Management Services on behalf of Owner. (ii) Without limiting the relationship of any Party under any other agreement, nothing contained or implied in this Agreement shall constitute or be deemed to constitute any Party as the partner of any other Party for any purpose whatsoever; or create, or be deemed to create, any partnership between any Party and the any other Party. (iii) No Party shall by virtue of this Agreement have the power or authority to enter into any agreement or undertaking for or to act on behalf of or otherwise to bind the any other Party as to any matter or thing to be done in relation to a System or to the provision of the Program Management Services save as may be expressly authorized in this Agreement or agreed in writing between the Parties from time to time.
(d) Entire Agreement. This Agreement, the Schedules and Exhibits attached hereto contains the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior negotiations, undertakings and agreements. Neither Party will be bound by or deemed to have made in connection herewith any representations, warranties, commitments or undertakings, except those contained herein.
(e) Captions; Exhibits. Titles or captions of sections contained in this Agreement are inserted only as a matter of convenience and for reference, and in no way define, limit, extend, describe or otherwise affect the scope or meaning of this Agreement or the intent of any provision hereof. All exhibits and appendices attached hereto shall be considered a part hereof as though fully set forth herein.
7 (f) Amendment. This Agreement may not be amended or modified in any way unless such amendment or modification is in writing signed by duly authorized representatives of each Party.
(g) No Waivers. It is understood and agreed that any delay, waiver or omission by Owner or Program Manager to exercise any right or power arising from any breach or default by Owner or Program Manager with respect to any of the terms, provisions, or covenants of this Agreement shall not be construed to be a waiver by Owner or Program Manager of any subsequent breach or default of the same or other terms, provisions or covenants on the part of Owner or Program Manager. No waiver of any right or power by any Party under this Agreement shall be deemed effective unless in writing and signed by the waiving Party. (h) Changed Conditions; Invalidity. If there is an occurrence of an event of Force Majeure, there is a material change in market conditions affecting the prices of goods and Program Management Services constituting Development Costs, there is a change in any Project Document or financing document or Owner enters into a new Project Document or financing document affecting performance of the Program Management Services hereunder, or there is a change in any applicable Law, and any such performance or occurrence results in increased or decreased costs to Program Manager, or Owner, as the case may be, shall be entitled to an equitable budget adjustment reflecting the reasonable value of any such increased or decreased costs from such performance or occurrence, and the Parties hereby agree to adjust equitably such other provisions of this Agreement that are directly affected by such performance or occurrence; provided, however, that such adjustments must be consistent with the economic expectations and the intent of the Parties. The invalidity or unenforceability for public policy or other equitable grounds of any provision of this Agreement shall be determined only by a court of competent jurisdiction, and the Parties hereby agree to negotiate an equitable adjustment to the invalid or unenforceable provisions with a view toward affecting the purposes of this Agreement. The validity or enforceability of the remaining provisions or portions or applications hereof shall not be affected thereby.
(i) Representations and Warranties.
(i) Each Party represents and warrants to the other that:
(A) it is duly formed and validly existing under the laws of its jurisdiction of formation;
(B) it has the legal right and full power and authority to execute and deliver, and to exercise its rights and perform its obligations under, this Agreement; (C) all corporate or company action required by it validly and duly to authorize the execution and delivery of, and to exercise its rights and perform its obligations under, this Agreement has been duly taken; and
(D) this Agreement constitutes a valid and binding agreement enforceable against it in accordance with its terms.
8 (ii) Except as expressly provided in this Agreement or as required by law, no Party makes any warranties or guarantees to the other, either express or implied, with respect to the Facility, the Program Management Services or any other subject matter of this Agreement, and, to the extent permitted by law, each Party disclaims and waives any implied warranties or warranties imposed by law.
(j) Counterparts. The Parties may execute this Agreement in two or more counterparts, which shall, in the aggregate, be signed by the Parties and each counterpart shall be deemed an original instrument as against any Party who has signed it. (k) Facsimile or Electronic Delivery. This Agreement may be duly executed and delivered by a Party by execution and facsimile or electronic format (including portable document format (.pdf)) delivery of the signature page of a counterpart to the other Party, and, if delivery is made by facsimile or other electronic format, the executing Party shall promptly deliver, via overnight delivery, a complete original counterpart that it has executed to the other Party, but this Agreement shall be binding on and enforceable against the executing Party whether or not it delivers such original counterpart.
(l) Dispute Resolution. In the event a dispute arises between the Parties regarding the application or interpretation of this Agreement, the aggrieved Party shall promptly notify the other Party of its intent to invoke this dispute resolution procedure within ten (10) Business Days after such dispute arises. If the Parties shall fail to resolve the dispute within ten (10) Business Days after delivery of such notice, each Party shall, within five (5) Business Days thereafter, nominate a senior officer of its management to meet at the Facility, or at any other mutually agreed location, to resolve the dispute. If the dispute remains unresolved within ten (10) Business Days after such a meeting has commenced, each Party, without further delay, shall have the right to pursue any and all remedies available at law or in equity. The pendency of any dispute under this Agreement shall not of itself relieve any Party of any duty to perform under this Agreement. (m) Non-Recourse. Notwithstanding anything to the contrary provided in this Agreement, it is specifically understood and agreed that there shall be absolutely no personal liability on the part of any of the partners, members, shareholders, or affiliates of the Parties, or any of their respective directors, officers, employees, agents or representatives, (each, a “Protected Person”) for the payment of any amounts due or the performance of any other obligation of any Party under this Agreement. Each Party shall look solely to the assets of the other Parties for the satisfaction of each and every right or remedy under or in connection with this Agreement. In furtherance of the foregoing, Owner and Program Manager each agrees that it shall neither seek or obtain, nor be entitled to seek or obtain, any deficiency or other judgment against any Protected Person for any action or inaction under or in connection with this Agreement, and Owner and Program Manager each releases all such Protected Persons from any such claims by Program Manager or Owner, as the case may be.
[Signature Page Follows]
[Signature Page to Program Management Agreement]
IN WITNESS WHEREOF, the parties have executed this Program Management Services Agreement as of the date first written above.
PROGRAM MANAGER:
[CCA NAME], [JURISDICTION AND
TYPE], [D/B/A]
By: ____________________________
Name: ___________________________
Title: ___________________________
OWNER:
Participate.Energy LLC
a Delaware limited liability company
By: ____________________________
Name: ___________________________
Title: ___________________________
EXHIBIT A
PROGRAM MANAGEMENT SERVICES SCHEDULE
Program Management Services generally include all activities necessary or helpful to (a) monitor and support and all permitting activities for any System; (b) prepare materials and conduct communications and outreach to residential electric power customer in its service territory to promote the Program and to encourage the installation of Systems by its customers.
(c) create a streamlined and integrated System permitting process allowing for faster System permitting;
(d) effectively communicate with and guide Installer through the System permitting process to ensure shorter permitting timelines and to avoid any permitting delays; (e) Effectively coordinate the System permitting process with all other governmental agencies involved;
(f) To the extent legally permissible and reasonable, expedite permitting for any System
PROGRAM SUPPORT AGREEMENT
This Program Support Agreement (this “Agreement”) dated effective as of ___________, 2023, (the “Effective Date”) is by and between [CCA NAME], [JURISDICTION AND TYPE], [D/B/A] (“Member”), and Participate.Energy LLC, a Delaware limited liability company (the “Owner”). The parties hereto are sometimes herein referred to individually as a “Party” and collectively as the “Parties”.
RECITALS
A. Member, Owner and Tesla, Inc. (“O&M Provider”) have entered into certain agreements for the creation of a distributed solar and energy storage program for residential electricity customers in Member’s service territory (the “Program”). Under the terms of the Program, Owner will develop, finance, and own residential solar and energy storage systems to be located at private residences within Member’s service territory (each a “System” or, collectively, the “Systems”), O&M Provider will operate and maintain the Systems under an O&M Contract between O&M Provider and Owner (the “O&M Contract”), Member will buy from Owner the energy and certain energy attributes and benefits generated by each System under the terms of a certain power purchase agreement between the Parties of even date herewith (the “Power Purchase Agreement”), and sell the electric power generated by a System to the residential customer in Member’s service territory, where the System is located (the “Customer”).
B. Member and Owner intend that Systems will be added to this Agreement and the Power Purchase Agreement from time to time during the term of the Power Purchase Agreement.
C. Owner does not independently maintain the internal capability to perform the Program Support Services (as defined below) that Owner requires in connection with the operation and maintenance of the Systems, and Member’s capabilities are expected to provide significant benefits to Owner. Therefore, Owner desires to engage Member to support certain aspects of the Systems operations and management as further set forth herein (the “Program Support Services”).
D. In consideration of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the sufficiency and adequacy of which are hereby acknowledged, the Parties agree to the following:
AGREEMENT
In consideration of the above recitals, the premises and mutual covenants set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:
1. Appointment and Term; Assumption of Development Responsibilities; Standard of Performance. Owner hereby appoints Member to render the Program Support Services as further described in the Schedule of Program Support Services attached hereto as Exhibit A. Member hereby accepts such appointment. The term of this Agreement shall be co-terminus with the term of the Power Purchase Agreement (“Term”). Member shall use such 2 diligence, care and prudence in the performance of its obligations hereunder as are commercially reasonable, and shall devote such time, effort and skills of its personnel as reasonably possible.
2. Standard of Conduct.
a) Member shall provide the Program Support Services, perform its other obligations and exercise its rights or powers under this Agreement in a prudent manner, and in accordance with: (i) any applicable laws and regulations and permits; and (ii) any agreement, instrument or other document to which Owner is a party, and that Owner has delivered to Member, that relates to the development, construction, Owner or a System or any component thereof (“System Documents”), except to the extent Owner provides Member with written instructions not to do so in the event Owner is contesting in good faith the validity or application of any such applicable laws and regulations or such term and condition of a System Document, in any reasonable manner.
b) Member may, at any time, if it reasonably considers it to be necessary or appropriate, request written instruction from Owner with respect to any matter contemplated by this Agreement and may defer action thereon pending the receipt of such written instructions. c) Member shall advise Owner promptly, if it becomes aware of any material inconsistency between any of the following:
(i) Owner’s instructions given in accordance with this Agreement from time to time;
(ii) any System Document;
(iii) required insurance (if any); and
(iv) any applicable laws and regulations or permit.
d) Any action taken by Member in accordance with the written instructions of Owner, or failure to act pending the receipt of such written instructions, shall be deemed to be within the scope of Member’s authority and in accordance with its obligations under this Agreement and, without limitation, shall not constitute gross negligence or willful misconduct as referred in Section 7.
3. Accounts and Records.
(a) Member, on behalf of Owner, shall keep such books of account and other records relating to each System as may be required by applicable laws and regulations or reasonably requested by Owner in writing. All accounts and records relating to a System, including all correspondence, shall be surrendered to Owner upon demand without charge therefor. (b) All books and records prepared or maintained by Member shall be kept and maintained at all times at secure locations accessible to Owner for audit, inspection and copying by Owner or any representative or auditor therefor or supervisory or regulatory authority upon reasonable written request.
3 (c) During the Term, Member shall keep Owner informed as to the status of the Program Support Services provided by Member hereunder in a frequency Member and Owner may agree to from time to time. Member shall notify Owner of any material event related to the Program Support Services provided by Member hereunder.
4. Compensation and Payment.
(a) As consideration for Member’s Program Support Services to be performed under this Agreement, Owner will pay Member a fee (the “Program Support Services Fee”) equal to (i) Two U.S. Cents ($0.02) multiplied by each Kilowatt-hour of solar energy generation for each System that has been placed into operation and for which Member has confirmed in a legally binding manner that such System will be covered under the Power Purchase Agreement for the term thereof, plus (ii) Fifteen Dollars ($15.00) per month for each Tesla Powerwall installed as part of a System that has been placed into operation and for which Member has confirmed in a legally binding manner that such System will be covered under the Power Purchase Agreement for the term thereof.
(b) The Program Support Services Fee shall become due and payable on a quarterly basis, not later than the fifteenth (15th) day after the end of each calendar quarter during the Term (each, a “Fee Calculation Period”), provided, that payment of any Program Support Services Fee due and payable shall be limited to funds available to Owner from Net Operating Cash Flow during such Fee Calculation Period. The term “Net Operating Cash Flow” as used in this Agreement shall mean the cash proceeds received by Owner under the terms of the Power Purchase Agreement during a Fee Calculation Period, reduced by (i) actual or reasonably estimated operating and maintenance expenses for all Systems in operation at any time during such Fee Calculation Period, including, without limitation insurance expenses and reasonably estimated reserves for loses, and actual or reasonably estimated System equipment replacement costs during the Term and reserves therefore, (ii) actual or reasonably estimated income or other taxes payable by Buyer with respect to such cash proceeds (iii) preferred distributions to be made and any cash flow payable, or revenue or profit participation allocated to tax or sponsor equity investors unaffiliated with Owner in accordance with the terms and conditions of the then current charter documents of Owner, and (iv) payment of all obligations, including without limitation payment of principal and interest, under any loan document binding Owner at any time during such Fee Calculation Period, or for which any System operating at any time during such Fee Calculation Period has been placed as collateral.
(c) Together with any Program Support Services Fee payment, Owner shall provide Member a written accounting for the Program Support Fee due in reasonable detail. In addition, if payment for a Fee Calculation Period is reduced to available funds for payment for the respective Fee Calculation Period in accordance with Section 4(b), above, Owner shall provide Member a written accounting in reasonable detail supporting any fee reduction during such Fee Calculation Period.
(d) Any portion of the Program Support Services Fee reduced during one Fee Calculation Period in accordance with Section 4(b), above, shall be added to the Program Support Services Fee becoming due and payable in the following Fee Calculation Period subject, 4 however, to availability funds from Net Operating Cash Flow during such following Fee Calculation Period.
(e) To facilitate payment and verification, Owner shall maintain all books and records necessary for billing and payments, including copies of all invoices under this Agreement, for a period of at least two (2) years or as otherwise required by applicable laws and regulations.
Upon fifteen (15) days’ Notice to Owner, Member shall be granted reasonable access to the accounting books and records pertaining to all invoices generated pursuant to this Agreement. (f) Payment adjustments shall be made if Owner or Member discovers there have been good faith inaccuracies in invoicing that are not otherwise disputed under Section 4(h), or there is determined to have been a meter inaccuracy sufficient to require a payment adjustment under the Power Purchase Agreement. If the required adjustment is in favor of Owner, Owner’s quarterly Program Support Services Fee payment shall be credited in an amount equal to the adjustment. If the required adjustment is in favor of Member, Member shall add the adjustment amount to Owner’s next quarterly Program Support Fee payment obligation, subject, however, to the limitations set forth in Section 4(b), above.
(g) If a payment due date under Section 4(b), above, falls on a weekend or legal holiday, such due date shall be the next business day. Payments made more than ten (10) business days after the due date will be considered late and will bear interest on the unpaid balance, except, however, any payment reduction applied during a Fee Calculation Period, if paid during the next available Fee Calculation Period during which funds available to Owner from Net Operating Cash Flow first allow payment of the reduced amount. If the amount due is not paid on or before the due date or if any other payment that is due and owing from one party to another is not paid on or before its applicable due date, a late payment charge shall be applied to the unpaid balance and shall be added to the next billing statement. Such late payment charge shall be calculated based on an annual interest rate equal to 10% (the “Interest Rate”) of the total amount due. If the due date occurs on a day that is not a business day, the late payment charge shall begin to accrue on the next succeeding business day. The payment of any late payment fee by Owner shall be subject to availability of funds from Net Operating Cash Flow.
(h) A Party may, in good faith, dispute the correctness of any invoice or any adjustment to an invoice, rendered under this Agreement or adjust any invoice for any arithmetic or computational error within twelve (12) months of the date the invoice, or adjustment to an invoice, was rendered. In the event an invoice or portion thereof, or any other claim or adjustment arising hereunder, is disputed, payment of the undisputed portion of the invoice shall be required to be made when due. Any invoice dispute or invoice adjustment shall be in writing and shall state the basis for the dispute or adjustment. Payment of the disputed amount shall not be required until the dispute is resolved. Upon resolution of the dispute, any required payment shall be made within two (2) business days of such resolution along with interest accrued at the Interest Rate from and including the original due date to but excluding the date paid. Inadvertent overpayments shall be returned upon request or deducted by the Party receiving such overpayment from subsequent payments, with interest accrued at the Interest Rate from and including the date of such overpayment to but excluding the date repaid or deducted by the Party receiving such 5 overpayment. Any dispute with respect to an invoice is waived if the other Party is not notified in accordance with this Section 4(h) within twelve (12) months after the invoice is rendered or subsequently adjusted, except to the extent any misinformation was from a third party not affiliated with any Party and such third party corrects its information after the twelve-month period. If an invoice is not disputed within twelve (12) months after the close of the month during which performance occurred, the right to payment for such performance is waived.
5. Default and Remedies. If either Party defaults in the performance of any of its material covenants or obligations under this Agreement and such default continues unremedied for a period of (a) ten (10) days, in case of any monetary default, or (b) thirty (30) days in case of non-monetary default, in each after written notice thereof from the non-defaulting Party to the defaulting Party, the non-defaulting Party shall have the right, at its election, to exercise one or more of the following rights and remedies; provided, however, if a non-monetary default is of such a nature that it cannot be cured within said thirty (30) day period, and the defaulting Party has begun to cure each default within the 30-day period, the defaulting Party shall have an additional 60 days in which to cure said default provided it acts in good faith and with due diligence to cure the same (all of which shall be cumulative); provided, further, however, that a default under any agreement with a contractor, subcontractor, engineer or equipment manager for a System, or a delay due to action or inaction by the utility shall not be deemed a default under the Agreement:
(a) terminate this Agreement; and
(b) enforce the provisions of this Agreement by legal proceedings for the specific performance of any covenant or agreement contained herein or for the enforcement of any other appropriate legal or equitable remedy and recover damages caused by any breach by the defaulting Party of the provisions of this Agreement, including court costs, reasonable attorneys’ fees and other expenses incurred in the enforcement of the obligations of the Defaulting Party hereunder; and
(c) exercise any and all rights and remedies that the non-defaulting Party may have under applicable laws and regulations; and
(d) in addition to any rights now or hereafter granted under applicable laws and regulations and not by way of limitation of any such rights, upon the occurrence of any event of default hereunder that is not cured within the time period specified in this Section 5, the non-defaulting Party is authorized to set off and to apply any amounts payable to the defaulting Party hereunder against and on account of the obligations of defaulting Party to the non-defaulting Party hereunder.
6. Indemnity and Liability
(a) Limitation of Liability.
(i) Notwithstanding any provision in this Agreement to the contrary, neither Party, nor their respective Affiliates, nor any of their respective officers, directors, employees, agents, contractors, subcontractors, vendors, shareholders, members, partners or representatives, shall be liable hereunder for any consequential or indirect loss or damage, 6 including loss of profit, cost of capital, loss of goodwill or any other special or incidental damages, it being understood that the Parties’ indemnification obligations under this Section 6 are not and shall not be deemed to be consequential or indirect loss or damage under this Section 6. (ii) Except as provided in this Section 6, Member shall have no liability hereunder to Owner for damages or other amounts in connection with a breach by Member of this Agreement or a failure by Member to perform the Program Support Services in accordance with the terms and conditions hereof or otherwise as a result of the Program Support Services performed by Member pursuant to this Agreement.
(iii) The Parties further agree that the waivers and disclaimers of liability, indemnities, releases from liability, and limitations on liability expressed in this Agreement shall survive termination or expiration of this Agreement, and shall apply at all times, whether in contract, equity, tort or otherwise, even in the event of the fault, negligence, including sole negligence, strict liability, or breach of the Party indemnified, released or whose liabilities are limited, and shall extend to the partners, members, principals, shareholders, directors, officers, employees and agents of each Party and its Affiliates.
(b) Indemnity. To the extent it may lawfully do so, each of Member and Owner hereby indemnify, defend (with counsel of its choosing), and hold harmless the other party and its directors, agents, officers, members, employees and volunteers from and against any and all liability or claim of liability, loss or expense, including defense costs and legal fees and claims for damages of whatsoever character, nature and kind, whether directly or indirectly arising from or connected to: bodily injury, death, personal injury, or property damage to the extent caused by negligence, creation or maintenance of a dangerous condition of property, or intentional infliction of harm, including any workers’ compensation suits, liability, or expense, arising from or connected with Program Support Services performed by on behalf of the indemnifying party by any person pursuant to this Agreement; nonpayment for labor, materials, appliances, teams, or power, performed on, or furnished or contributed to the Site. Notwithstanding the above, neither Member nor Owner shall be required to defend, indemnify and hold harmless the other for such other party’s negligent acts and omissions or willful misconduct. It is the intent of the Parties that where negligence is determined to have been joint or contributory, principles of comparative negligence will be followed, and each Party shall bear the proportionate cost of any loss damage, expense or liability attributable to that Party’s negligence.
7. Notices. Any notice, request, demand or other communication which is required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given: (i) on the date of receipt by the applicable Party if personally delivered; (ii) when transmitted by the applicable Party if transmitted by telecopy, electronic mail, or other digital transmission method, subject to the sender’s facsimile machine receiving the correct answerback of the addressee and confirmation of uninterrupted transmission by a transmission report or the recipient confirming by telephone to sender that he has received the facsimile or electronic mail message; and (iii) when received by the applicable Party, if sent for next day delivery to a domestic address by recognized overnight delivery service or, if sent by certified or registered mail, return receipt requested.
Notices shall be given:
7 If to Owner, to:
Participate.Energy LLC
2093 Philadelphia Pike #3125,
Claymont, DE 19703.
Attn: Ethan Friedman
Phone: 917-301-2621
Email: [email protected]
If to Member, to:
[FILL IN]
8. General Provisions.
(a) No Agency Relationship. This Agreement does not create an agency relationship between the Parties and does not establish a joint venture or partnership between the parties. Except as expressly set forth herein, neither party has the authority to bind the other party or represent to any person that the party is an agent of the other party. (b) Agreement. This Agreement consists of the terms and conditions set forth herein, as well as the appendices hereto, which are incorporated by reference herein and made part hereof.
In the event of a conflict, variation or inconsistency between the appendices hereto and the terms and conditions contained in the body of this Agreement, the latter shall control and be given priority.
(c) Relationship of the Parties.
(i) Member has been retained by Owner as an independent contractor to solely perform the Program Support Services on behalf of Owner. (ii) Without limiting the relationship of any Party under any other agreement, nothing contained or implied in this Agreement shall constitute or be deemed to constitute any Party as the partner of any other Party for any purpose whatsoever; or create, or be deemed to create, any partnership between any Party and the any other Party. (iii) No Party shall by virtue of this Agreement have the power or authority to enter into any agreement or undertaking for or to act on behalf of or otherwise to bind the any other Party as to any matter or thing to be done in relation to a System or to the provision of the Program Support Services save as may be expressly authorized in this Agreement or agreed in writing between the Parties from time to time.
(d) Entire Agreement. This Agreement, the Schedules and Exhibits attached hereto contains the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior negotiations, undertakings and agreements. Neither Party will be bound by or 8 deemed to have made in connection herewith any representations, warranties, commitments or undertakings, except those contained herein.
(e) Captions; Exhibits. Titles or captions of sections contained in this Agreement are inserted only as a matter of convenience and for reference, and in no way define, limit, extend, describe or otherwise affect the scope or meaning of this Agreement or the intent of any provision hereof. All exhibits and appendices attached hereto shall be considered a part hereof as though fully set forth herein.
(f) Amendment. This Agreement may not be amended or modified in any way unless such amendment or modification is in writing signed by duly authorized representatives of each Party.
(g) No Waivers. It is understood and agreed that any delay, waiver or omission by Owner or Member to exercise any right or power arising from any breach or default by Owner or Member with respect to any of the terms, provisions, or covenants of this Agreement shall not be construed to be a waiver by Owner or Member of any subsequent breach or default of the same or other terms, provisions or covenants on the part of Owner or Member. No waiver of any right or power by any Party under this Agreement shall be deemed effective unless in writing and signed by the waiving Party.
(h) Changed Conditions; Invalidity. If there is an occurrence of an event of Force Majeure, there is a material change in market conditions affecting the prices of goods and Program Support Services constituting Development Costs, there is a change in any Project Document or financing document or Owner enters into a new Project Document or financing document affecting performance of the Program Support Services hereunder, or there is a change in any applicable Law, and any such performance or occurrence results in increased or decreased costs to Member, or Owner, as the case may be, shall be entitled to an equitable budget adjustment reflecting the reasonable value of any such increased or decreased costs from such performance or occurrence, and the Parties hereby agree to adjust equitably such other provisions of this Agreement that are directly affected by such performance or occurrence; provided, however, that such adjustments must be consistent with the economic expectations and the intent of the Parties and agree to in writing by the Parties. The invalidity or unenforceability for public policy or other equitable grounds of any provision of this Agreement shall be determined only by a court of competent jurisdiction, and the Parties hereby agree to negotiate an equitable adjustment to the invalid or unenforceable provisions with a view toward affecting the purposes of this Agreement. The validity or enforceability of the remaining provisions or portions or applications hereof shall not be affected thereby.
(i) Representations and Warranties.
(i) Each Party represents and warrants to the other that:
(A) it is duly formed and validly existing under the laws of its jurisdiction of formation;
9 (B) it has the legal right and full power and authority to execute and deliver, and to exercise its rights and perform its obligations under, this Agreement; (C) all corporate or company action required by it validly and duly to authorize the execution and delivery of, and to exercise its rights and perform its obligations under, this Agreement has been duly taken; and
(D) this Agreement constitutes a valid and binding agreement enforceable against it in accordance with its terms.
(ii) Except as expressly provided in this Agreement or as required by law, no Party makes any warranties or guarantees to the other, either express or implied, with respect to the System, Program Support Services or any other subject matter of this Agreement, and, to the extent permitted by law, each Party disclaims and waives any implied warranties or warranties imposed by law.
(j) Counterparts. The Parties may execute this Agreement in two or more counterparts, which shall, in the aggregate, be signed by the Parties and each counterpart shall be deemed an original instrument as against any Party who has signed it. (k) Facsimile or Electronic Delivery. This Agreement may be duly executed and delivered by a Party by execution and facsimile or electronic format (including portable document format (.pdf)) delivery of the signature page of a counterpart to the other Party, and, if delivery is made by facsimile or other electronic format, the executing Party shall promptly deliver, via overnight delivery, a complete original counterpart that it has executed to the other Party, but this Agreement shall be binding on and enforceable against the executing Party whether or not it delivers such original counterpart.
(l) Dispute Resolution. In the event a dispute arises between the Parties regarding the application or interpretation of this Agreement, the aggrieved Party shall promptly notify the other Party of its intent to invoke this dispute resolution procedure within ten (10) business days after such dispute arises. If the Parties shall fail to resolve the dispute within ten (10) business days after delivery of such notice, each Party shall, within five (5) business days thereafter, nominate a senior officer of its management to meet at the facility, or at any other mutually agreed location, to resolve the dispute. If the dispute remains unresolved within ten (10) business days after such a meeting has commenced, each Party, without further delay, shall have the right to pursue any and all remedies available at law or in equity. The pendency of any dispute under this Agreement shall not of itself relieve any Party of any duty to perform under this Agreement. (m) Non-Recourse. Notwithstanding anything to the contrary provided in this Agreement, it is specifically understood and agreed that there shall be absolutely no personal liability on the part of any of the partners, members, shareholders, or affiliates of the Parties, or any of their respective directors, officers, employees, agents or representatives, (each, a “Protected Person”) for the payment of any amounts due or the performance of any other obligation of any Party under this Agreement. Each Party shall look solely to the assets of the other Parties for the satisfaction of each and every right or remedy under or in connection with this Agreement. In 10 furtherance of the foregoing, Owner and Member each agrees that it shall neither seek or obtain, nor be entitled to seek or obtain, any deficiency or other judgment against any Protected Person for any action or inaction under or in connection with this Agreement, and Owner and Member each releases all such Protected Persons from any such claims by Member or Owner, as the case may be.
(n) Parties shall not discriminate in its employment practices because of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, marital status, sex, age, or sexual orientation in contravention of the California Fair Employment and Housing Act, Government Code section 12900 et seq.
(o) Governing Law. This Agreement si executed and intended to be performed in the State of California, and the laws of that State shall govern its interpretation and effect. Any legal proceedings on this agreement shall be brought under the jurisdiction of the Superior Court of County of Placer, State of California, and Owner hereby expressly waives those provisions in California Code of Civil Procedure section 394 that may have allowed it to transfer venue to another jurisdiction.
(p) Entirety of Agreement. This Agreement contains the entire agreement of Member and Owner with respect to the subject matter hereof, and no other agreement, statement, or promise made by any party, or any employee, officer or agent of any party, which is not contained in this Agreement, shall be binding.
[Signature Page Follows]
[Signature Page to Program Support Agreement]
IN WITNESS WHEREOF, the Parties have executed this Program Support Agreement as of the date first written above.
MEMBER:
[CCA NAME], [JURISDICTION AND
TYPE], [D/B/A]
By: ____________________________
Name: ___________________________
Title: ___________________________
OWNER:
Participate.Energy LLC
a Delaware limited liability company
By: ____________________________
Name: ___________________________
Title: ___________________________
EXHIBIT A
PROGRAM SUPPORT SERVICES SCHEDULE
1. Member shall provide Level 1 System Support for all Systems included under the Power Purchase Agreement, including without limitation maintaining and coordinating all personnel, activities, and infrastructure reasonably required for such Level 1 Support Services. “Level 1 Support Services” shall include:
a) Provide first contact and Customer interaction for any System-related communication via email and telephone;
b) Clarify general System functions and features via email or telephone upon receipt of Customer requests;
c) To the extent reasonably possible by telephone or email, verify, analyze and correct System problems reported by Customers;
d) Create incident reports, including initial analysis, for System problems that cannot be corrected by telephone or email;
e) Forward incident reports to O&M Provider promptly upon report of any System problem that cannot be corrected by Member by telephone or email; f) Periodic reporting to Owner and O&M Provider of all significant System-related Customer interactions.
Framework Distributed Energy Resource Program Agreement This Framework Distributed Energy Resource Program Agreement (this “Agreement”) is entered into as of [_______________] (the “Effective Date”), among the parties listed below (each, a “Party” and together the “Parties”). This Agreement comprises (i) the Key Terms set out below (the “Key Terms”), and (ii) all schedules referenced in the “Attachments” section of the Key Terms.
Key Terms
This Agreement sets out the terms and conditions on which the [CCA NAME] (“Member”) shall market and offer a program for the deployment of traditional solar PV systems and Powerwalls (“System”) to certain residential customers (“Customers”) and new homes builders (“Builders”) located in the Member territory, with sales and educational support provided by Member, product and product installation support provided by Tesla, purchase and operation of System by Participate.Energy, LLC (“The Program Fund”) for the sale of energy from the Systems to Member for resale to Customers (the “Program”).
Parties:
Tesla: Tesla, Inc., a corporation organized under the laws of Delaware.
Member: [CCA NAME] Pioneer Community Energy Authority, a joint exercise of powers pursuant to Government Code section 6500 et seq.
The Program Fund: Participate.Energy, LLC, a Delaware limited liability company.
Framework Agreement Term:
Term: The period commencing on the Effective Date and ending on the second (2nd) anniversary of the Effective Date (the “Term”), which shall automatically be extended for additional, one-year periods upon the expiration of the then-current Term unless terminated early in accordance with this Agreement.
Notices:
Tesla Notice Address: 1 Tesla Road, Austin, TX 78725, USA.
Attn: Energy Notices / Legal Department
Phone: +1. 512.516.8177.
Email: [email protected].
Tesla Address for submission of
Purchase Orders:
www.tesla.com
Member Notice Address: [INSERT]
Program Fund Notice Address: Participate.Energy, LLC
Attn: Ethan Friedman
c/o Virtual Post Solutions, Inc.
2093 Philadelphia Pike #3125
Claymont, DE 19703
[email protected]
NDA:
NDAs: The non-disclosure agreement dated [MMM DD, YYYY] between the Program Fund and Member.
Attachments:
The attachments below are incorporated by reference into this Agreement. In the event of any conflict, the order of precedence shall be (i) these Key Terms and (ii) the Schedules, in order of appearance.
Schedule 1: Program Terms and Conditions
Schedule 2: Pricing
Attachment A: Form of Customer Agreement
Attachment B: Form of New Homes Builder Framework Agreement Attachment C: Form of Customer Order – Program Terms
EXECUTED by the Parties on the Effective Date.
[CCA NAME]
(SIGNATURE)
(PRINT NAME)
(PRINT TITLE)
TESLA, INC.
(SIGNATURE)
(PRINT NAME)
(PRINT TITLE)
PARTICIPATE.ENERGY, LLC
(SIGNATURE)
(PRINT NAME)
(PRINT TITLE)
Schedule 1
Program Terms and Conditions
1. The Program. The objective of the Program is to deploy eligible Systems with a target of [INSERT] MW of direct current capacity throughout the territorial boundaries of Member utilizing the distributed microgrids program within service territories managed by Member (the “Territory”), as further set forth in this Agreement (the “Objective”).
2. Program Development.
(a) Geographic Focus. Membershall target all residential Customers and Builderslocated or operating within the portion of the Territory that is located within Member’s jurisdictional boundaries (the “Member Territory”) through the Master Marketing Plan.
(b) Site Eligibility. Eligible sites include existing single-family residential properties (“Existing Homes”) and single-family residential properties under construction by participating Builders in accordance with a New Homes Builder Framework (“New Homes”) located in the Member Territory. (c) Marketing Strategy & Outreach. The Master Marketing Plan shall be jointly developed by the Parties and designed to enlist the participation of Customers and Builders located in the Member Territory.
(i) Marketing Strategy. Within sixty (60) days, Member shall develop a strategy for marketing and promoting the Program, including:
1. Specific tactics that will be used to execute the Master Marketing Plan strategy;
2. An annual budget and description of dedicated resources that will be used to support Program marketing efforts;
3. Specific communications to be made through its sales channels; and
4. Dedicated education and links to the Tesla Products offering on the Member website. (ii) Marketing Outreach. Member shall provide consistent and targeted marketing outreach consistent with the Master Marketing Plan to prospective Customers and Builders in the Member Territory.
(d) Sales Support. Member shall:
(i) Provide sales support for interested Customers and Builders by phone and email. (ii) Provide educational information regarding Tesla Products, economics, billing, maintenance, installation and technical performance of the System and components thereof as provided by Tesla; and
(iii) Convert inbound interest and leads into Orders that (i) that Customers may submit to Tesla through the Existing Homes Retrofit Energy Order Tool; and (ii) participating Builders may submit to Tesla through the New Homes Energy Order Tool. (e) Order Funding. The Program Fund shall facilitate the establishment of a fund (the “Program Fund”) that shall be obligated to pay for Orders placed in accordance with the Program criteria set forth herein and that shall own and operate the Systems in accordance with the terms and conditions of each Customer Agreement.
3. Customer Eligibility; Engagement.
(a) Eligibility. To be eligible for participation in the Program, a Customer must: (i) either own an Existing Home or have entered into an agreement with a Builder to purchase a New Home, (ii) be an existing participant, or agree to become a participant in the Member’s Community Choice Aggregation program with utility service provided by Pacific Gas & Electric (“Utility”), (iii) agree to host a System installed on the home and to provide the Program Fund, as System owner, and its agents with a non-exclusive license (the “Site License”) for access to the Site for the entire term of the Customer’s participation in the Program for the purposes operating and maintaining the System; and (iv) agree to purchase an equivalent amount of energy generated by the System pursuant to a Solar Power Purchase & Energy Storage Services Agreement (each, a “Customer Agreement”) using the form attached hereto as Attachment A. (b) Customer Engagement. Member shall assist Customers with New Homes to accept the transfer and assumption of a Customer Agreement from a participating Builder in accordance with the terms and conditions of the applicable New Homes Builder Framework as more particularly described in Section 4. Member shall assist Customers with Existing Homes to place Orders directly with Tesla and to enter into a Customer Agreement in accordance with Section 5.
4. New Homes Builder Framework Agreement.
(a) Builder Framework Agreement. During the Term, the Parties may consider Builders for participation in the Program. Upon Tesla confirmation of Builder eligibility, the Program Fund and each participating Builder will enter into a New Homes Builder Framework Agreement (the “Builder Framework”) in the form attached as Attachment B. Material deviations from the Builder Framework are not permitted without unanimous written agreement of the Parties. (b) Builder Framework Obligations. The Program Fund will require, pursuant to each Builder Framework, that Builders deliver and maintain the following to remain eligible for participation in the Program:
(i) A fully executed Builder Framework;
(ii) Community Specific Terms setting forth the Tesla Product Suite, eligible System information and Pricing applicable to the particular subdivision of new homes (each, a “Community”); (iii) An executed Builder non-disclosure agreement in the form attached to the Builder Framework;
(iv) Orders as set forth in Section 5 placed in accordance with each Builder Framework; (v) For each Order, a “solar ready” home that will include internal conduit installation, roof dry in and order details developed in consultation with the buyer of each applicable home in the Community (each, a “Home Owner”) sufficient for Tesla to complete installation of Tesla Products and the home to pass inspection by the applicable building department as the authority having jurisdiction (“AHJ”); and
(vi) Ongoing compliance with the Builder Framework and Program requirements as Tesla and Member may mutually agree to update from time to time.
5. Orders.
(a) During the Term, Member shall direct eligible Customers to the Existing Homes Energy Order Tool at www.tesla.com and Builders to the New Homes Energy Order Tool developed by Tesla for each Builder to place orders for Tesla Products for installation on Existing Homes or New Homes in the Member Territory in accordance with these Program terms and the form of Customer Order – Program Terms set forth in Attachment C (“Orders”).
(b) Tesla shall deliver and install Tesla Products in accordance with each applicable Order. The Program Fund shall purchase and pay for the quantities and types of Tesla Products at the prices stated in each applicable Order. Tesla will review each submitted Order to ensure that it tracks the Program criteria and the Community Specific Terms, if applicable. If Tesla reasonably believes that the Order does not track the Program criteria or the Community-Specific Terms, it will notify the Parties and the Parties will then reasonably cooperate to resolve the issue. (c) For each Order that is accepted by Tesla (each, an "Accepted Order"), Tesla shall supply, install and commission the Tesla Products at the Site identified in that Accepted Order in accordance with that Accepted Order and the Work Standards described in Section 8(a) (the “Work”). Accepted Orders will be subject to Tesla’s standard terms and conditions. (d) For purposes of this Agreement and each Accepted Order, “Tesla Products” means a Traditional PV System with a Powerwall, as more particularly set forth in the Community Specific Guidelines of each Builder Framework. A “Traditional PV System” means a traditional solar photovoltaic generating system comprising of solar modules, an inverter and various balance of system components. A “Powerwall” means an energy storage system manufactured by Tesla and accompanying Tesla accessories. Each Traditional PV System, Powerwallshall consist of those that correspond to the specifications published in the Tesla Partner Portal as of the date when an Order for such Tesla Product is submitted.
(e) Tesla agrees to provide Member with access to a platform managed by Tesla that enables access to and control of distributed energy resource assets (“DER Assets”), manufactured by Tesla and owned directly or indirectly by Member or the Program Fund, for monitoring, aggregation, and control (the “Aggregation Platform”). Tesla will not charge Member or the Program Fund any fees for access or use of the platform, but otherwise reserves the right to establish the terms and conditions for Member’s access to the Aggregation Platform within an Aggregation Platform Subscription Agreement in a form mutually acceptable to the parties. Access to the Aggregation Platform excludes aggregation services offered by Tesla. (f) The Parties acknowledge and agree that Tesla can choose at any time to discontinue a product, feature or option related to any one or more Tesla Products and, in Tesla’s sole discretion, can choose whether to provide a comparable product, feature or option, or terminate any affected Order before installation of any Tesla Product. If Tesla fails to provide a comparable product, feature or option to Member’s reasonable satisfaction, Member may terminate any affected Order before installation of any Tesla Product.
6. Pricing; Order Payment.
(a) Pricing. Programmatic pricing for Tesla Products is set forth in Schedule 2 (the “Pricing”). The System size or design may be adjusted by Tesla in its reasonable discretion based on a variety of factors, including installation complexity or product availability, provided that the Pricing remains at or below the Pricing set forth on the Program website. If that happens, we will update the Pricing in the applicable Order; Orders with updated Pricing that exceeds the Pricing set forth on the Program website and that are not accepted will be terminated. (b) Order Payment. For Accepted Orders, the price for the Work performed by Tesla under each Accepted Order shall be the Contract Price identified in that Accepted Order. The Program Fund shall pay the Contract Price for each Accepted Order plus applicable taxes within 30 days after receipt of Tesla’s invoice, which Tesla shall provide after the affected Tesla Products have been installed and passed inspection by the AHJ. Passed inspection shall also be deemed “Acceptance” in this Agreement and in each Builder Framework.
(c) Price Adjustments. Tesla may request a Pricing increase from time to time, provided, that any requested Pricing increase shall be limited to the pricing charged for similar Systems and Tesla Products online through www.tesla.com. Within 5 business days after receipt of a written Pricing increase request, Program Fund shall, in writing, either reject (providing detailed reasons for rejection) and provide Tesla a reasonable Pricing counter-offer, or accept the requested Pricing increase. Should Program Fund provide a Pricing counter-offer, Tesla shall either reject (providing detailed reasons for rejection) or accept such counter-offer within 5 business days after receipt.
Any Pricing increase agreed to between Tesla and Program Fund shall take effect and be binding for all Orders placed through www.tesla.com at the later of (i) the business day following Program Fund’s written acceptance of the Pricing increase , or (ii) if Program Fund requires a change to the Customer pricing as result of the Pricing increase, the business day after the adjusted Customer pricing has been included in the Existing Homes Retrofit Energy Order Tool and the New Homes Energy Order Tool. Should Tesla and Program Fund fail to agree upon the amount of a Pricing increase, Tesla shall not be obligated to accept any additional Orders.
7. Title; Risk of Loss. Title to and risk of loss for the Tesla Products shall pass to the Program Fund after Acceptance.
8. Permits. Customers and Builders, as the case may be, shall bear the obligation to obtain and maintain all permits required for Tesla to install each Tesla Product (the “Permits”), except that Tesla shall include the cost of Permits in Orders for Existing Homes.
9. Installation.
(a) Work Standards. Tesla, or its approved subcontractors, will perform the Work according to Tesla’s standard practices and the “Tesla Work Standards” set forth in Exhibit 2 to each Builder Framework exercising the reasonable skill and care of an installation contractor and in accordance with mandatory laws, regulations and permits applicable to the Work. (b) Subcontractors. Tesla will be responsible for all work performed by, and acts or omissions of, each subcontractor and will ensure that all subcontractors are licensed as required by applicable law. (c) Safety. Tesla shall ensure that all Tesla employees and subcontractors comply with Builder’s safety procedures and requirements while on Sites during prosecution of the Work.
10. Failure to Perform.
(a) If any Party believes that any other Party is not satisfying its obligations under this Agreement or with respect to an Order, such Party must notify the other Party in writing. Whichever Party is notified of not meeting its obligations will have 30 days after receiving that notice to correct the issue. If not, whoever gave the notice can terminate the affected Order or this Agreement in accordance with Section 13.
(b) In addition, if Tesla notifies the Parties of the Program Fund’s failure to pay the Price for an Order, Tesla can suspend work on that Order and, if not cured within ten (10) days, Tesla can suspend performance under this Agreement.
(c) If a Customer or Builder terminates an Order for Tesla’s failure to perform before installation of the Tesla Products for that Order has commenced, Tesla will return any payment(s) made toward the Price for those products.
(d) If either party terminates an Order for the other party’s failure to perform, except as specified in the next sentence, Tesla may take back all components of any Tesla Products Tesla delivered but that have not yet been installed for that Order and shall not have any further obligation to deliver product pursuant to this Agreement or that Order. In addition, if an Order is terminated pursuant to this Section, Tesla will complete the installation of Tesla Products where installation is partially complete, unless otherwise requested by the Program Fund (in which case, Tesla will deinstall and remove the Tesla Products from the affected home and return the jobsite to its original condition, at no cost). Each Party will also be able to pursue all rights and remedies available at law or in equity with respect to the failure to perform, except as otherwise provided in Section 13, below.
Breaches of one or more Orders will not constitute breaches under any other Orders or under this Agreement, and breaches of this Agreement independent of any Orders shall not constitute breaches of any Orders.
11. Warranties.
(a) Starting on the date of installation, Tesla warrants to the Program Fund that all materials, equipment and work furnished by Tesla as part of an Order will be:
(i) of good quality, free from fault and defects, and
(ii) performed in a good and workmanlike manner, in accordance with all applicable laws, building codes and ordinances, and in strict conformity with the Order.
If the Program Fund notifies Tesla within 1 year after Acceptance (for Existing Homes) or the initial close of escrow by a Home Owner (for New Homes), Tesla shall, at its sole expense, immediately correct or replace any Work that is defective or determined to be not in accordance with the requirements of the above warranties.
(b) Tesla’s warranties in this Agreement are limited, as they do not cover (i) any defect or damage to the extent caused (A) by events that are (1) beyond Tesla’s reasonable control, (2) not reasonably foreseeable, and (3) not caused by Tesla’s or its subcontractor’s negligence, or (B) by Customer or Program Fund misuse or negligence, and (ii) any material or equipment connected to the Tesla Products that Tesla did not install. Tesla is not providing any warranties in connection with this Agreement other than those in this Agreement or in the product warranties provided by Tesla pursuant to Section 11(c), even if those other warranties are express or implied by any law. (c) Tesla's warranties under this Agreement shall in all cases survive termination of this Agreement and the transfer of title in the home to a third-party purchaser, except for a Home Owner (whose warranty is set forth in Sections 11(e) and 11(f)).
(d) With respect to any warranty claim by the Program Fund under Section 11(a) for the correction, replacement and warranty work, the remedies set forth in Section 11(a) and in Sections 10(d) and 11, as applicable, are the Program Fund’s sole and exclusive remedies. For clarity, the foregoing shall not limit the Program Fund’s ability to bring claims for other purposes not related to the correction, replacement and warranty work as set forth in this Section 11(d), including, without limitation, the Program Fund’s rights to indemnification under Section 14. (e) If a Home Owner exercises a buyout option and purchases any Tesla Product from the Program Fund, Tesla will cover each Home Owner with limited warranties for Tesla Products in the forms attached as Exhibit 3 to each Builder Framework, as applicable. (f) In addition, Tesla will provide to each Home Owner the workmanship warranty attached as Exhibit 4 to each Builder Framework, assuming the Program Fund assigns that warranty to the Home Owner.
(g) The manuals and equipment warranties for Tesla Products are available upon request after each Order.
12. Proprietary Rights.
(a) Ownership. As between the Parties, Tesla shall remain the sole and exclusive owner of any and all Proprietary Rights associated with the System or any parts or derivations thereof. “Proprietary Rights” means patents, trademarks, copyrights, mask work rights, trade secrets and any other intellectual or proprietary rights. Tesla represents and warrants that the System does not and will not infringe on the intellectual property rights of third parties. (b) License. Tesla hereby grants to Member, a limited, non-exclusive, non-sublicensable, non-transferable license to use the materials that Tesla provides for implementing the Master Marketing Plan and marketing the Plan in accordance with this Agreement. Except for the foregoing, no license or other right to Tesla’s Proprietary Rights is granted or implied hereby.
13. Termination.
(a) Termination for Cause. Each Party may terminate its participation in this Agreement or any Accepted Order for cause in the event (i) an insolvency event involving one of the other Parties; or (iii) any Party has materially breached any provision of this Agreement (other than non-payment) and, within 30 days after receipt of written notice of such breach from a non-breaching party, the breaching party has failed to cure such breach or, in the event the breach cannot reasonably be cured within such 30 day period, submit a plan for cure acceptable to each non-breaching party in its reasonable discretion. The termination of this Agreement by any single Party shall result in the termination of this Agreement as to all Parties.
(b) Insolvency Event. An “Insolvency Event” occurs with respect to a Party (i) if it is adjudged bankrupt; (ii) if it makes a composition or arrangement with its creditors; (iii) if it has a winding up petition or a petition for an administration order presented against it; (iv) if it has a receiver or manager or administrative receiver or provisional liquidator appointed; or (v) upon the happening of any other event of insolvency.
(c) Effects of Termination. Except as otherwise set forth in this Agreement, the expiration or termination of this Agreement will not affect any rights or obligations of the Parties that were incurred or that accrued prior to such expiration or termination. Termination shall not be deemed an election of remedies, and the non-defaulting party shall have all rights and remedies available under applicable law in connection with and following such termination.
14. Indemnification.
(a) Except to the extent permitted by this Agreement, no Party to this Agreement will be obligated to indemnify any other Party from any losses, damages, liabilities, deficiencies, actions, judgments, interest, awards, penalties, fines, costs or expenses, including reasonable legal fees (“Losses”) to the extent arising out of or due to the negligence or willful misconduct of such other Party or for the acts of a Customer. For purposes of this Agreement and each Builder Framework, “Indemnified Parties” means for each Party, (i) the Party and any person providing financing to the Party with respect to the System, (ii) any affiliate of the persons set forth in clause (i), and (iii) any director, officer, partner, member, manager, agent or employee of a person described in clause (i) or (ii); and, “Indemnifying Party” means each other Party, as the context requires. (b) Tesla’s Indemnities. Tesla will indemnify, defend and hold harmless each other Party’sIndemnified Parties from any Losses arising out of any claim, action, suit, proceeding, investigation made or brought by any third party (“Claims”):
i. alleging that Tesla Products (or any component or software thereof) or Tesla’s Work pursuant to any Accepted Order infringes the intellectual property rights of a third party, other than a Claim for which such Party is responsible under Section 11(c). In addition, if such Party is enjoined from the use, operation or enjoyment of Tesla Products or any part thereof as a result of any Claim alleging that Tesla Products or Tesla’s Work infringes the intellectual property rights of a third party, Tesla will at no cost to such Party, at Tesla’s option: (1) have such injunction removed, (2) substitute non-infringing goods or processes, or (3) modify the infringing goods or processes so they become non-infringing and provide the same or better functionality and performance relative to the affected item’s then-current functionality and performance; and
ii. in connection with the design, construction, installation, warranty service, workmanship, materials or functionality of any materials, equipment and work furnished by Tesla, except with respect to any modification by any party other than Tesla (directly or indirectly) or use or reuse of Tesla Products that are the subject of an Accepted Order other than as permitted under this Agreement or their warranties. (c) Program Fund Intellectual Property Indemnity. Program Fund will indemnify and hold harmless Tesla and Tesla’s Indemnified Parties from any Losses arising out of Claims alleging infringement to the extent involving actions of the Program Fund and:
i. a particular design, process or product required or specified pursuant to any Accepted Order or where the copyright violations are contained in drawings, specifications or other documents prepared or provided by Program Fund or others for whom Program Fund is responsible, except to the extent that such documents were provided by Tesla for distribution to Customers under this Agreement,
ii. any modification by Program Fund (directly or indirectly), use or reuse of Tesla Products other than as permitted under this Agreement or their warranties, iii. use of Tesla Products by Program Fund (directly or indirectly) in combination with any other products, materials or equipment not expressly authorized in writing by Tesla in circumstances where the infringement would have been avoided by the use of Tesla Products not so combined, unless such other products, materials or equipment are provided, required or approved by Tesla (as indicated by reasonable evidence) for, or are intrinsic to, use of Tesla Products, or
iv. any modifications or changes made to Tesla Products by Program Fund (directly or indirectly) other than at the direction (as indicated by reasonable evidence) of Tesla in circumstances where the infringement would have been avoided without such modifications or changes.
(d) Member Intellectual Property Indemnity. Member will indemnify and hold harmless Tesla and Tesla’s Indemnified Parties from any Losses arising out of Claims alleging infringement to the extent involving actions of the Member and:
i. a particular design, process or product required or specified pursuant to any Accepted Order or where the copyright violations are contained in drawings, specifications or other documents prepared or provided by Member or others for whom Member is responsible, except to the extent that such documents were provided by Tesla for distribution to Customers under this Agreement,
ii. any modification by Member (directly or indirectly), use or reuse of Tesla Products other than as permitted under this Agreement or their warranties, iii. use of Tesla Products by Member (directly or indirectly) in combination with any other products, materials or equipment not expressly authorized in writing by Tesla in circumstances where the infringement would have been avoided by the use of Tesla Products not so combined, unless such other products, materials or equipment are provided, required or approved by Tesla (as indicated by reasonable evidence) for, or are intrinsic to, use of Tesla Products, or
iv. any modifications or changes made to Tesla Products by Member (directly or indirectly) other than at the direction (as indicated by reasonable evidence) of Tesla in circumstances where the infringement would have been avoided without such modifications or changes.
15. Limitation of Liability. Except for indemnification obligations (Section 14), breach of confidentiality (Section 17), or any gross negligence or willful misconduct, the Program Fund’s and Tesla’s total liability for all damages of any kind arising out this Agreement will not exceed $1,000,000.00 or the limits of required insurance, whichever is greater, and Member shall not bear any liability for any damages of any kind arising out this Agreement. Also, no party will have to pay any other party for any indirect, special or consequential damages.
16. Force Majeure. Each Party shall be excused from performance and shall not be considered to be in breach with respect to any obligation hereunder other than any obligation to pay money due and owing, if and to the extent that such Party’s failure of, or delay in, performance is caused by or results from acts or circumstances beyond the reasonable control of such Party (a “Force Majeure Event”); provided:
(a) such Party gives the other Parties notice describing the particulars of the Force Majeure Event as soon as is reasonably practicable and in any event within ten (10) Business Days after the discovery of the Force Majeure Event and its impact on such Party’s performance; (b) the suspension of performance is of no greater scope and of no longer duration than is reasonably required by the Force Majeure Event;
(c) the Party uses reasonable endeavors to:
(i) overcome or mitigate the effects of such occurrence, and (ii) minimize costs and expenses attendant to or arising from such occurrence; (d) when the Party is able to resume performance of the affected obligations, such Party shall so notify the other Party and promptly resume performance.
17. Confidentiality; Publicity.
(a) Except for communications exchanged between each Party, each Party will keep any disclosures, as well as the terms of this Agreement, confidential in accordance with the non-disclosure agreements between them (the “NDAs”) and agree that this Agreement is confidential information of each of them for purposes of the NDAs. (Even though the NDAs are separate documents, they are considered part of this Agreement).
(b) Neither Party will advertise or issue any public announcement about this Agreement, or use the other Party’s mark, name or logo in any marketing literature, web sites, articles, press releases (including interviews with representatives of media organizations of any form), or any other document or electronic communication, without the other Party’s written consent. Each Party’s written approval of a marketing plan shall be deemed written consent in compliance with the foregoing to publication or use of trademarks as expressly provided in such approved marketing plan..
(c) Nothing in this Agreement, the NDAs, or any other agreement between the Parties limits or prohibits any announcement, disclosure, or other act that is required by law, including under the California Public Records Act or Ralph M. Brown Act.
18. Governing Law; Disputes.
(a) The Parties agree to comply with all applicable laws and regulations in connection with this Agreement. This Agreement is governed by the laws of the State of California. Any dispute arising out of or relating to this Agreement shall be brought in the Superior Court of California, County of Placer, or the United States District Court for the Eastern District of California. (b) The Parties are not bound by any terms relating to Tesla Products or other matters covered by this Agreement or any Order that are not contained in this Agreement or the affected Order. (c) Each of the Parties also agree to promptly notify the other’s senior level management if there is any dispute relating to this Agreement or any Orders and to try to resolve the dispute in good faith.
If the Parties are unable to resolve a dispute within 20 days after that notice is given, then any of them can request to take the dispute to mediation or arbitration through Judicial Arbitration and Mediation Services (“JAMS”) according to JAMS Streamlined Arbitration Rules or proceed with legal action. The existence, content and result of any mediation or arbitration will be confidential except to the extent that applicable law requires otherwise. Any arbitration will be conducted by a single arbitrator in English and in Placer County, California, unless otherwise agreed by the Parties. Each Party will each bear its own expenses in any mediation or arbitration and will share equally the costs of any mediation arbitration unless the arbitrator assigns costs to one of them.
Judgment upon the award rendered in the arbitration may be entered in any court of competent jurisdiction.
19. Miscellaneous.
(a) Representations. Each Party represents and warrants to the other Parties that (i) it is a legal entity, duly organized, validly existing and in good standing under the laws of jurisdiction of incorporation and registered and authorized to do business in the State of California; (ii) this Agreement constitutes a legal, valid and binding obligation of such Party enforceable in accordance with its terms; and (iii) the execution, delivery and performance of this Agreement (A) is within its powers, (B) has been duly authorized by all requisite action and (C) will not violate any agreement, commitment, certificate or other document to which it is a party or by which any of its assets may be bound or affected.
(b) Compliance with Law. Each Party will comply with all applicable laws and regulations in connection with its performance under Agreement.
(c) Notices. All notices under this Agreement must be in writing and must be sent via email, or express and/or certified mail, to the contacts identified in the Key Terms. Email notice shall not be effective unless the other Party acknowledges receipt or notice is also sent by another method. (d) Assignment. Tesla or the Program Fund can assign this Agreement and each Accepted Order (i) to an affiliate of Tesla or the Program Fund, respectively, and (ii) as collateral in connection with its financing activities, in either case without the need for consent from any other Party. (e) Insurance. Each Party shall carry and maintain in force, with reputable insurance companies authorized to do business in the jurisdictions where the portion of the Member Territory is located.
Each of the Parties shall each maintain all insurance that such Party is required by law to maintain.
In connection with the Work pursuant to each Builder Framework and Accepted Order, Tesla shall be required to maintain insurance as set forth in Exhibit 6 to the Builder Framework. (f) Cumulative and Certain Exclusive Remedies. Except as otherwise specifically set forth in this agreement, all rights and remedies provided under this Agreement are cumulative and not exclusive, and the exercise by either Party of any right or remedy does not preclude the exercise of any other rights or remedies that may now or subsequently be available at law, in equity, by statute, in any other agreement between the Parties or otherwise. (g) Entire Agreement; Severability. This Agreement constitutes the entire agreement between the Parties regarding the subject matter hereof and supersedes all prior agreements, representations and understandings, oral or written, between the Parties regarding the subject matter hereof. If any provision of this Agreement is held by a court of competent jurisdiction to be invalid or unenforceable, such term shall be severable from the remainder of this Agreement and the remainder of this Agreement or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable shall not be affected and each term and provision of this Agreement shall be valid and be enforced to the fullest extent permitted by the law.
(h) Amendment and Modification. No amendment or modification of this Agreement is effective unless it is in writing and signed by each Party.
(i) Waiver. No waiver by either Party of any provision of this Agreement is effective unless explicitly set forth in writing and signed by such Party. No failure to exercise, or delay in exercising, any right or remedy arising from this Agreement operates or may be construed as a waiver thereof. No single or partial exercise of any right or remedy hereunder precludes any other or further exercise thereof or the exercise of any other right or remedy.
(j) Relationship of the Parties. The relationship between the Parties is that of independent contractors. Nothing contained in this Agreement shall be construed as creating any agency, partnership, joint venture or other form of joint enterprise, employment or fiduciary relationship between the Parties, and neither Party shall have authority to contract for or bind the other Party in any manner whatsoever.
(k) No Third-Party Beneficiaries. This Agreement is for the sole benefit of the Parties hereto and their respective successors and permitted assigns and nothing herein is intended to or shall confer upon any other person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.
(l) Survival. Provisions of this Agreement which by their nature contemplate or govern performance or observance subsequent to the termination or expiration of this Agreement shall survive such termination or expiration.
Schedule 2
Pricing
The following terms set forth in this table listed below (the “Pricing”) shall apply to each Accepted Order as of the date the Accepted Order is received by Tesla in accordance with the terms and conditions of this Agreement. The Parties agree that Tesla may, in its reasonable discretion, based upon community-specific factors, including installation complexity, as well as recent market factors and product availability, update the Pricing applicable to each Community pursuant to each New Home Builder Framework so long as the Pricing is at or below the Pricing set forth on the Program website. Pricing shall not exceed the Pricing on the Program website absent written Notice to the Parties(including email) and written acceptance by each applicable Party or any other method as may reasonably be agreed upon by the Parties.
Solution Price
Solar PV (Rooftop) < 8kW $2.90 /Wp
Solar PV (Rooftop) >= 8kW $2.80 /Wp
1st Powerwall $10,500
2nd Powerwall $6,700
3rd Powerwall $7,100
4th Powerwall $6,900
5th Powerwall $6,100
6th Powerwall $6,000
7th Powerwall $6,000
8th Powerwall $6,100
9th Powerwall $6,000
10th Powerwall $6,000
Tesla Pre-Construction Services
Examples: Remove copper from roof; upgrade
structure; remove existing solar PV;
remove/relocate AC unit; remove/fix existing
generator; remove existing battery backup;
remove/relocate existing solar thermal;
remove/relocate rooftop vents; remove/trim tree;
clean roof surface; fix electrical code violation;
remove/relocate shelving; master-panel upgrade
(MPU) (situational)
14.5¢ PPA: $0 - $750 in pre-construction services
15.0¢ PPA: $751 - $2,500 in pre-construction services
15.5¢ PPA: $2,500 - $5,000 in pre-construction services Project Ineligible: > $5,000 in pre-construction services By way of example, for a typical System (7.6 kW
Solar PV + 1 Powerwall)
Solution Price
7.6 kW Solar PV $22,040
1st Powerwall $10,500
Tesla Pre-Construction Services $2,000
TOTAL: $34,540 (corresponds to a 15.0¢ Customer PPA)
Attachment A
Form of Customer Agreement
[Insert]
Attachment B
Form of New Homes Builder Framework Agreement
[Insert]
Attachment C
Form of Customer Order – Program Terms
[Insert]
Overview of how a Pioneer offered solar plus battery microgrid program compares to 3rd party market PPA solar plus battery offer.
The below chart compares the Pioneer microgrid offer to the current market PPA solar+battery offer that 3rd party solar companies make to Pioneer customers.
Pioneer Offer 3rd Party PPA Offer
Upfront cost to residential,
single family home
customers
$0 upfront cost $0 upfront cost
Do all residential customers
qualify?
Yes No. Qualification depends
on FICO score
Do renters (of single family
homes) qualify?
Yes No. Not offered to renters
Solar PPA price & battery
price for customers with a
FICO score greater than
650 to 600 (depending on
market provider)
$0.145 per kWh solar PPA
price with 1.9% annual
escalator locked in for 25
years (w/ 5-year option to
extend)
$115 per month battery
price with 0% annual
escalator locked in for 25
years. This is for one (1)
battery. Some residential
customers may select 2
batteries. Each additional
battery costs $75 per
month with 0% annual
escalator
Total year 1 solar+battery
price of the Pioneer offer is
20%+ below market. This
% below market grows
over time because market
annual escalator rates are
higher than Pioneer’s
$0.169 to $0.189 per kWh
solar PPA price with 1.9%
to 2.9% annual escalator
locked in for 20 to 25 years
$127 to $189 per month
battery price with 1.9% to
2.9% annual escalator
locked in for 10 to 25
years. Pricing for
additional batteries is $100
to $189 per month with
1.9% to 2.9% escalators
Solar PPA price & battery
price for customers with a
FICO score less than 650 to
600 (depending on market
provider)
Same pricing as customers
with a high FICO score
Not offered
Solar PPA price & battery
price for CARE customers
Important – because CARE
Same pricing as customers
with a high FICO score
Not offered
Agenda Item: Agenda Date:
customers receive a
subsidized rate, initial
research indicates that the
Pioneer price would be
higher than what CARE
customers currently pay
Is there a plan to offer
lower pricing to CARE
customers?
Yes
Tesla, Participate.Energy,
and Pioneer plan to
cosponsor an application to
the US Treasury requesting
additional Federal subsidy
for CARE customers in
Pioneer territory. If we are
successful, then pricing
could potentially be
reduced to provide bill
savings for CARE
customers.
No. Not offered
Contract term (how many
years does the residential
customer lock in the above
solar+battery pricing)
25 years for both the solar
pricing and the battery
pricing (w/ 5-year option to
extend)
20 to 25 years for the solar
pricing.
Depending on the provider,
10 to 25 years for the
battery pricing (based on a
replacement battery being
offered or not)
Can the residential
customer choose to size
the solar+battery system
to supply 100% of their
energy use?
Yes
Additionally, if a residential
customer plans to add an
electric car or increase
their electricity use in the
near future, they can
choose to size the
solar+battery system to
supply up to ~125% of
their current energy use if
the customer and Tesla can
justify the larger energy
use to PG&E
Depends on customer’s
FICO score
What happens when the
residential customer sells
the house?
The Pioneer offer transfers
to the new home buyer
without any FICO score
check (or any credit
underwriting, etc) of the
new home buyer. This
ensures that the
solar+battery system
The home buyer’s FICO
score is checked (there is a
credit underwriting, etc),
and if the score is not
satisfactory to the 3rd
party solar+battery system
owner, then an added layer
of complexity is added to
Agenda Item: Agenda Date:
doesn’t add a layer of
complexity to the sale of
the house
Because the Pioneer offer
has a significantly lower
annual price escalator over
the next 25 to 30 years
(compared to historical
PG&E annual escalators),
we believe that homes that
enroll in Pioneer program
will be more desirable to
future home buyers.
the sale of the house (the
transfer could be rejected,
forcing a buyout from the
current owner or the rates
could be re-negotiated
upwards to “accommodate”
the new homeowner)
Does the customer receive
a 2nd electricity bill (in
addition to their current
PG&E bill)?
No.
The Pioneer microgrid
billing is added as a line
item to the customers
existing PG&E bill
Yes.
Customer will have 2 bills
going forward. One from
PG&E and the other from
the 3rd party solar PPA
provider
Tesla customer experience Yes. All residential
customers that choose
Pioneer program get the
full Tesla customer
experience
No. Not offered
Access to supply of Tesla
batteries (“Powerwall”)
Tesla Powerwall batteries
and other materials for
Pioneer customers are
included in Tesla’s planning
Depends on allocation and
available inventory from
market provider
Impact to Pioneer when a
residential customer goes
solar+battery
If the residential customer
goes solar+battery via the
Pioneer microgrid program,
then there is a positive
impact to Pioneer in
retaining their customer
long-term
If the residential customer
goes solar+battery with a
3rd party solar PPA
provider, then there is a
negative impact to Pioneer
in sharing their customer
and losing load
Fiscal impact to Pioneer
(based on 1,000 homes
going solar+battery)
Approximately
$21,000,000 over 30 years
per 1,000 homes
Based on the system size
assumptions previously
mentioned in this Staff
Report
Negative due to less retail
revenue for Pioneer due to
the lost load
Who owns the renewable
energy credits (“RECs”)
generated by the solar over
Pioneer owns the RECs The 3rd party company that
owns the solar+battery
systems owns the RECs
Agenda Item: Agenda Date:
the next 25 to 30 years?
Does Pioneer have real
time visibility into the
energy use, solar
generation and battery
storage/discharge of each
house that goes
solar+battery
Yes No
Ability for Pioneer to create
future programs that
benefit residential
customers & Pioneer
(example DR, Grid
Services, etc)?
Yes – with maximum
economic benefit to the
customer & Pioneer
Yes – with TBD economic
benefit to the customer &
Pioneer
Staff Report – Item 5
To: The Governing Board
From: Sam Kang, Chief Operating Officer
Item 5: Update on the Implementation of Bioenergy Market Adjusting Tariff (BioMAT) Date: 2/15/2024
RECOMMENDATION
Receive an update on the implementation of BioMAT.
BACKGROUND
Biomass energy is a key resource priority for Pioneer Community Energy (Pioneer) as indicated in its strategic and integrated resource plans. In order to reduce the cost of purchasing biomass energy, Pioneer co-sponsored and led the effort to pass Assembly Bill (AB) 843 (Aguiar-Curry) in the 2021 legislative session. AB 843 allowed community choice aggregators (CCA) like Pioneer to participate in the BioMAT program that they and all load-serving entities paid into, yet only investor-owned utilities had access to.
Nearly two years after the passage of AB 843, on November 30, 2023, the California Public Utilities Commission (CPUC) issued Decision 23-11-084 “SETTING THE RULES TO ENABLE COMMUNITY CHOICE AGGREGATORS TO PARTICIPATE IN THE BIOENERGY MARKET ADJUSTING TARIFF PROGRAM.” Pioneer has been working closely with the California Community Choice Association (CalCCA) and other interested CCAs to implement AB 843.
ANALYSIS & DISCUSSION
On January 29, 2024, CalCCA, on behalf of the participating BioMAT CCAs (3CE, OCPA, Pioneer, and RCEA) filed the attached Tier 2 Advice Letter (AL) required under the BioMAT Implementation Decision, D.23-11-084, for CCA BioMAT participation.
The Tier 2 AL requests CPUC the approval of: (1) the standard program documentation required by D.23-11- 084 to allow CCA participation in the BioMAT program; and (2) the 2024 and 2024 costs of Accion, the website and third-party administration (TPA) provider. Included in the Tier 2 Advice Letter are:
Pro Forma CCA Tariff
Power purchase agreement (PPA)
Program participation request (PPR) forms
BioMAT program website and portal development, and TPA contract with Accion Balancing account statements
On February 1, 2024, Pioneer filed Tier 3 AL No. 16-E requesting CPUC approval of Pioneer’s participation in the BioMAT Program together with 2024 and 2025 forecasted revenue requirements pursuant to D.23- 11-084. Since new BioMAT projects will likely not come online till 2026, Pioneer does not forecast any revenue requirements beyond Pioneer’s share of the Accion costs of $13,000 that will be reimbursed by PG&E after they (and the other investor-owned utilities (IOUs)) reach an agreement with Accion.
Agenda Item: 5 Agenda Date: 2/15/2024
Next steps for implementation are:
• Continue working with Accion on website design and portal processes • Sign an agreement with Accion for website and third-party administrator services (pending Accion’s review of a PG&E final change in one of the Scopes of Work) • IOUs need to sign agreements with Accion for website and TPA services (pending IOU negotiations on their agreement with Accion)
• Work with CPUC after receiving their review and feedback of the CCA Advice Letters • Feb. 28, 2024 – Accion completes central BioMAT webpage and structure for CCA webpages • April 28, 2024 – Accion completes individual participating CCA webpages • May 2024 – Launch of Pioneer BioMAT program!
FISCAL IMPACT
$13,000 initially to be reimbursed by PG&E after signing the agreement with Accion resulting in no fiscal impact.
Staff Report – Item 6
To: The Governing Board
From: Donald Eckert, Executive Director
Item 6: Second Amended and Restated Joint Powers Agreement Date: 2/15/2024
RECOMMENDATION
Discussion as a follow-up to the resolution that approved the Second Amended and Restated Joint Powers Agreement (“JPA”) for Pioneer Community Energy (“Pioneer”) at the January 18, 2024, Governing Board meeting.
BACKGROUND
The Board discussed and adopted resolution at the January 18, 2024, Board meeting. The revisions to the JPA included:
• Name – Change the name of agency to Pioneer Community Energy throughout. • Recitals – Update recitals to reflect on the history of Pioneer and subsequent amendments. • Effective Date – Revise effective date to reflect Second Amended and Restated. • Exhibit A for List of Members – Easier reference and updating when expansion occurs. • Special Voting Requirements – Revise Section 8 to separate the discussion of involuntary termination of a member from the discussion of general amendments to the JPA. • Amendments – Revise Section 19, Amendments, to specify that only amendments to Section 4, Powers, and the addition of new member agencies requires approval by separate resolutions of each of the member agencies and to make other changes to streamline the amendment process. • Satisfied/Completed Obligations – Revise sections that have been completed to indicate they are satisfied.
• Clean-Up – Fix incorrect cross references and typos.
ANALYSIS & DISCUSSION
With approval from the Board, subsequently staff collaborated with the Member Agencies to place the Second Amended and Restated JPA on each of our Member Agencies consent calendar for approval. At the date of this report, half of our Member Agencies have approved while the remainder will have it on the agenda during February.
The City of Rocklin did have discussion on the Pioneer JPA at their January 23, 2024, Council meeting. All changes to the JPA were approved except for a request from Councilmember Broadway to have a discussion at the Pioneer Board regarding the Member Agencies role if a member exits the JPA. While changes to the JPA did not include any revisions to a member existing, the Board should review the item.
Next steps would be to bring the JPA back to the City of Rocklin for final approval at their March Council meeting.
STRATEGIC PLAN
The recommendation supports the Operational Excellence priority.
FISCAL IMPACT
There is no fiscal impact with this report.
ATTACHMENTS
There are no attachments to this report.
Agenda Item: 6 Agenda Date: 2/15/2024
Staff Report – Item IV-B
To: The Governing Board
From: Donald Eckert, Executive Director
Item IV-B: Executive Director Report
Date: 2/15/2024
PERSONNEL
Alexia was one of Pioneer’s first employees and has the honor of being Pioneer’s first retiree.
She’s worn many hats through the years – Board Clerk, communications support, webmaster, and Customer Care manager. She has shared her knowledge and talents generously and has been a staunch advocate for our customers. Her attention to detail has been an asset not only to Customer Care, but to all of Pioneer.
On behalf of everyone at Pioneer, we wish her a wonderful retirement … and for those of you in Placer County, I suspect you will see her again, as she already is involved in many community groups! Current recruitment is for the Sr. Manger of Quantitative Analysis.
EXECUITVE DIRECTOR AGREEMENTS EXECUTED (NON-POWER SUPPLY) The following agreements have been executed by the Executive Director, consistent with the authority delegated by the Board:
• Jones Hall, Bond Counsel services, Effective 2/2/24 until completion, not-to-exceed $10,000
EXPANSION
Staff engaged with Board Supervisor Bains and staff of Sutter County regarding joining Pioneer. The meeting was well received and will lead to further discussions. Staff will continue to explore expansion opportunities and review those opportunities and the state of the power supply market with the Expansion Committee in May.
PROGRAMS ACTIVITY - GREENLITE
Staff is working with GreenLite to continue to identify new stores in our territory. Recent additions will be:
• 1 store in Auburn
• 1 store in Pollack Pines
• 2 additional stores in Grass Valley
On the following page is a photo of a display at a Placerville store:
Agenda Item: IV-B Agenda Date: 2/15/2024
CARBON-FREE ALLOCATIONS
As part of the Power Charge Indifference Adjustment (“PCIA”) proceeding decision from the California Public Utilities Commission (“CPUC”), PG&E is required to provide greenhouse-gas free (“GHG”) emission credits to load-serving entities in their service territory that pay the PCIA (based on their load share). The GHG allocation is comprised of nuclear and large hydro assets that PG&E owns and operates. Since Pioneer’s Board is focused on low cost and Pioneer’s portfolio is on track to meet the all GHG-free targets set by the State and required by the CPUC, Pioneer optimizes its portfolio by reselling its GHG-free allocation.
For the 2024 allocation, through many bilateral discussions and difficult negotiations, Pioneer was able to resell its large hydro allocation and lock in a minimum of $2.5 million of incremental revenue, with the possibility of adding an additional $1 million if the hydro assets perform as expected/forecast. Well done by the energy procurement team!
COMMUNITY ADVISORY COMMITTEE (“CAC”)
There was no CAC meeting in January. Next scheduled meeting is February 28, 2024.
EXECUTIVE DIRECTOR POWER SUPPLY CONTRACTS EXECUTIED
The following agreements have been executed by the Executive Director, consistent with the authority delegated by the Board:
Counterparty Name
Execution
Date Type Product Start Date End Date
Notional
Value
Shell Energy North America 1/22/2024 Sell Pioneer Large Hydro 1/22/2024 12/31/2024 $2,460,021 City of Lancaster 1/4/2024 Sell Pioneer North System Flexible 3/1/2024 3/31/2024 $12,000 City of Lancaster 1/23/2024 Sell Pioneer North System 4/1/2024 4/30/2024 $24,500 Town of Apple Valley 1/4/2024 Sell Pioneer North System Flexible 3/1/2024 3/31/2024 $12,000 Town of Apple Valley 1/23/2024 Sell Pioneer North System 4/1/2024 4/30/2024 $14,000 Pico Rivera Innovative Municipal Energy 1/23/2024 Sell Pioneer North System 4/1/2024 4/30/2024 $14,000 Santa Barbara Clean Energy 1/23/2024 Sell Pioneer North System 4/1/2024 4/30/2024 $3,500 Rancho Mirage Energy Authority 1/23/2024 Sell Pioneer North System 4/1/2024 4/30/2024 $7,000 Clean Power Alliance 1/23/2024 Sell Pioneer North System Flexible 4/1/2024 4/30/2024 $43,500 San Jacinto Power 1/23/2024 Sell Pioneer North System 4/1/2024 4/30/2024 $7,000 Agenda Item: IV-B Agenda Date: 2/15/2024
Presentations and Relevant Meetings attended by the Executive Director
1. Participated in CalCCA Weekly/Monthly Board meetings.
2. Presented at Nevada City/Grass Valley Community Forum
3. Presented at Sutter County regarding expansion
4. Participated with CalTrans staff about opting up to Green100
5. Participated in a tour of CAISO with Chair Dowdin-Calvillo and Director Hidahl
ATTACHMENTS
1. Agenda Planning Document
2. Legislative and Regulatory Report
3. Public Outreach Report
Agenda Planning Document – Pioneer Community Energy Updated 2-9-2024 C: Pioneer Community Energy\Executive Director - General Documents\Board\Board Meeting Templates
BOARD OF
DIRECTORS
FEBRUARY 15, 2024
3:00 PM
(Post Agenda: February 9)
MARCH 21, 2024
3:00 PM
(Post Agenda: March 15)
APRIL 25, 2024
3:00 PM
(Post Agenda: April 19)
IN THE FUTURE
General Function I Closed Session [2:30 & Teams] Closed Session [time & Teams] Agenda Review Agenda Review Agenda Review
Consent
1a
Minutes for Approval
DECEMBER 14, 2023
JANUARY 18, 2024
Minutes for Approval
FEBRUARY 15, 2024
Minutes for Approval
MARCH 21, 2024
1b Mid-Year Budget Review (Koehn) Receive Draft Financials: JAN 2024 (Koehn)
Receive Draft Financials: FEB 2024
(Koehn)
1c Recruitment Incentive (Koehn)
1d Conflict of Interest Code update
(Eckert)
Regular
2 Board/Staff recognition in receiving a
Credit Rating for Pioneer (discussion- Eckert)
Update on Prepay Transaction
(discussion-Eckert)
WPWMA Biomass Plant update (action- Kang)
FY 2024-25 Operating Budget (action-Koehn)
3 RES recognizing Board Members for
their dedicated service to Pioneer
Community Energy - Andreatta, Cortez
(action-Eckert)
Leg Reg Platform (action-Kang) RES Grid Savvy program (action- Stassi- Vanacore) IT Annual Audit (discussion-Koehn)
4 RES Participate.Energy contract
(action - Stassi-Vanacore)
RES Amendment No. 3 to ED
Employment Agreement (action-Eckert)
State of the Utility (discussion-Eckert)
5 Committees-affirm current members
& fill vacancies (action-Eckert)
Strategic Plan (discussion-Eckert) RES Strategic Plan (action-Eckert) 6 RES Approval of BioMAT PPA and
associated documents (action-Kang)
RES HVAC Program (action - Stassi- Vanacore)
7 2nd Amended & Restated JPA
(discussion-Eckert)
Electrum contract update & demo
(discussion - Stassi-Vanacore)
8 LMS - Programs update (action-Kang/Stassi-Vanacore)
General Function II
IV-B
Executive Director’s Report
REG Reports: Leg/Reg; Programs;
Community Engagement; staff recognition;
Executive Director’s Report
REG Reports: Leg/Reg; Programs;
Community Engagement;
Executive Director’s Report
REG Reports: Leg/Reg; Programs;
Community Engagement;
QTR updates: Strategic Plan Objectives;
Sponsorship Activity; Income Graduated
Fixed Charge;
Executive Director Report-QTRLY Updates
requested by the Board
JAN – APR – JULY – OCT
Strategic Plan Objectives
Sponsorship Activity
Income Graduated Fixed Charge
IV-C Informational Items
Glossary of Terms
Informational Items
Glossary of Terms
Informational Items
Glossary of Terms
Agenda Planning Document – Pioneer Community Energy Updated 2-9-2024 C: Pioneer Community Energy\Executive Director - General Documents\Board\Board Meeting Templates AUDIT/FINANCE COMMITTEE MAY – TO BE SCHEDULED
in-person & remote locations
DATE
in-person & remote locations IN THE FUTURE
Greg Janda, Chair
John Hidahl, Vice Chair
Gary Petersen
vacant
FY 2024-25 Operational Budget
IT Audit
ENERGY PROCUREMENT REVIEW
AD HOC COMMITTEE
DATE TBD
zoom only DATE IN THE FUTURE
John Hidahl, Chair
Greg Janda, Vice Chair
Alice Dowdin Calvillo
vacant
Select Officers for 2024
EXPANSION
AD HOC COMMITTEE
APRIL – TO BE SCHEDULED
zoom only DATE IN THE FUTURE
Jim Holmes, Chair
Alice Dowdin Calvillo, Vice Chair
David Yarbrough
Select Officers for 2024
Check-in
COMMUNITY ADVISORY COMMITTEE
TO THE EXECUTIVE DIRECTOR FEBRUARY 28, 2024 APRIL 24, 2024 IN THE FUTURE Meets on the 4th Wednesday
(even-numbered months)
JUNE 26
AUGUST 28
OCTOBER 23
DECEMBER 11
By-Laws Article V, Section 5.3
Each committee shall on an annual basis choose its officers, comprised of a Chairperson and Vice-Chairperson
Ad Hoc Member Limit fewer members than majority of board (<6) Ad Hoc Member Limit fewer members than majority of board (<6)
Attachment: Legislative and Regulatory Update
Date: 2/15/2024
Legislative Affairs
• The deadline to introduce 2024 legislative bills legislative is February 16. • There was a press conference on January 30, 2024, by numerous Democratic Legislators to repeal the income-graduated fixed charge. Most of those that attended the press conference are from coastal/wealthier districts whose constituents are understandably upset that their bills will increase, yet again. AB 1999 has 20 authors and co-authors. The bill would repeal the income-graduated fixed charge and instead replace it would a maximum fixed charge of no more than $5 for CARE customers and no more than $10 for other residential customers.
• CalCCA Lobby Day is currently scheduled for Wednesday, February 21 from 8am-6:30pm. CalCCA will be setting up meetings with Leadership and people from the Administration for Executive Directors of CCAs and individual CCAs are encouraged to set up meetings with their delegation to discuss CCA accomplishments in 2023 and ask Legislators what their priorities are for the year. Meetings have been set up with Senator Niello, Senator Alvarado-Gil, and the Chief of Staff with Assembly Member Megan Dahle. CalCCA has set up a meeting with Senator Dahle, since he is part of Leadership (Vice-Chair of Senate Energy, Utilities and Communications Committee). Assembly Member Patterson is not in Sacramento on the 21st.
Regulatory Proceedings
Below is a summary table of the key issues, followed by further detail on activities since our last Board Meeting on a few ongoing priority Pioneer regulatory Proceedings and matters. More updates will follow at future Board meetings as regulatory proceedings and matters evolve.
Proceeding Issue Pioneer Position
R.22-07-005 Order Instituting Rulemaking
(OIR) to advance Demand
Flexibility through electric rates
Limit negative impacts of the
Income Based Graduated Fixed
Charge and educate Pioneer
Board and customers prior to
the rollout
R.22-10-010 Order Instituting Rulemaking to
Implement AB 843 (2022) –
The Bioenergy Adjusting Tariff
Program
Expeditiously implement AB
843 to allow CCA access to the
BioMAT program for future
subsidies for biomass
procurement
A.20-02-009; A.21-03-008;
A.21-06-001; A.22-05-029
PG&E 2019 Energy Resource
Recovery Account (ERRA)
Compliance Application; PG&E
2020 ERRA Compliance
Application; 2021 ERRA
Compliance Application; 2022
ERRA Compliance Application;
2023 ERRA Compliance
Application; 2023 ERRA
Forecast Application; 2024
ERRA Forecast Application
Reduce the ERRA impact on the
PCIA; increase data
transparency from the IOUs
Attachment: 2 Agenda Date: 2/15/2024
R.20-08-020 Rulemaking to develop a
successor to existing Net
Energy Metering (NEM) tariffs
and to review and refine
existing NEM tariffs
Mitigate impacts to Pioneer NBT
customers and inform
customers of upcoming changes
to the program
R.21-03-011 Provider of Last Resort (POLR)
Order Instituting Rulemaking
Limit the impacts of changes to
the Financial Security
Requirement (FSR)
R.17-09-020; R.19-11-009;
R.21-10-002
Resource Adequacy (RA)
Reform & Implementation
Tracks
Refine the current RA Program
construct; reduce volatility of
RA prices; increase RA
procurement availability and
grid reliability
R.18-12-005 Utility De-energization, Public
Safety Power Shutoffs (PSPS),
and Enhanced Powerline Safety
Settings (EPSS)
Reduce impacts of PSPS and
EPSS events; increase
coordination and
communications with IOUs to
ensure public safety during de-energization; limit PSPS and EPSS impacts on CCA load
scheduling
CEC - OIR – 21-OIR-03, 23-
LMS-01
Load Management Standards
(LMS)
Ensure Pioneer Maintains
compliance with CEC mandates
and requirements
AB 843 OIR:
• October 20, 2022- The OIR was opened to examine issues in the implementation of AB 843 which Pioneer and other CCAs championed in 2021.
• April 28, 2023- Workshop held.
• August 28, 2023- Meeting between CalCCA and IOUs.
• October 10, 2023- Proposed Decision. Largely a win for CCAs. This decision is not final until the CPUC hears and votes to approve it.
• November 6, 2023- CalCCA, Joint IOUs, and Public Advocates Office filed reply comment to the PD. • November 9, 2023- CalCCA attended an ex parte meeting with Commissioner John Reynolds’ office concerning the BioMAT PD.
• November 16, 2023- The CPUC delayed the vote on a decision. • November 28, 2023- CPUC issued a revised Proposed Decision. • November 30, 2023- CPUC voted to approve the revised Proposed Decision, which clarified many of the issues raised in the comments of the PD, while retaining the favorable outcome for CCAs. • January 2, 2024- the IOUs submitted their Tier 2 ALs modifying the BioMAT Tariff to incorporate CCAs. • January 29, 2024- 60 days from the Decision- CCAs finalized two provisions with Accion for website work and third-party administrator. In addition, CCAs submitted a revised tariff, a program participation request, power purchase agreement, rate schedule, and balancing statement as part of a Tier II AL to the CPUC. • February 1, 2024, Tier III ALs were submitted by 4 CCAs indicating interest in participating in the BioMAT program.
Demand Flexibility:
• June 30, 2022- AB 205 passed giving the CPUC the authority to approve a pricing structure that incorporates an Income Based Graduated Fixed Electricity Charge (IGFC). • July 14, 2022- The Commission issued an OIR to begin this proceeding to establish demand flexibility policies and modify electric rates to advance the following objectives: 1) enhance the reliability of Attachment: 2 Agenda Date: 2/15/2024
California’s electric system; 2) make electric bills more affordable and equitable; 3) reduce the curtailment of renewable energy and greenhouse gas emissions associated with meeting the state’s future system load; 4) enable widespread electrification of buildings and transportation to meet the state’s climate goals; 5) reduce long-term system costs through more efficient pricing of electricity; and 6) to enable participation in demand flexibility by both bundled and unbundled customers. • July 31, 2023- Parties submitted Comments on the IGFC Implementation Pathways considering the ALJ Ruling’s questions.
• August 21, 2023- CalCCA submitted Reply Comments to refute parties’ arguments regarding including the PCIA or Competitive Transition Charge (CTC) as fixed costs eligible for inclusion in the IGFC. • October 27, 2023- 22 Democratic lawmakers sent a letter to the CPUC asking for an extension of the timeline for the proceeding and require public participation hearings before implementing an IGFC. • November 3, 2023- Track A (IGFC)- CalCCA filed a reply brief continuing to refute party proposals that the PCIA be included in the IGFC and noting that the parties advocating for inclusion of the PCIA have not addressed the arguments put forth by CalCCA.
• December 15, 2023- Track B (demand flexibility)- The CPUC issued a PD which directs PG&E to expand the Valley Clean Energy Ag-Fit pilot program. CCAs that participate in the expanded pilot may receive $20/kW for each year of customer enrollment in the PGE Ag-Fit pilot as an incentive. The incentive is capped at $1.8 million for PG&E’s territory. The budgets are for all the CCAs wanting to participate to share. PG&E will be administering the pilot so there will be no administrative costs, but several of the CCAs want to have a say in how the pilot is administered and the education and outreach of the pilot. December 18, 2023- Track A (IGFC)- CPUC issued a ruling requesting implementation information from the IOUs on the IGFC. The ruling directs the IOUs to file additional information about the proposed budgets for implementing the first income-graduated fixed charges by January 24, 2024. • January 23, 2024-(Track B) There was a revised PD on the expanded pilots. Pioneer is considering offering the expanded Ag-Fit program to its customers. The pilot will be administered by PG&E so it will involve minimal work on behalf of Pioneer staff, but it will also bolster our Load Management Standards program and keep us competitive with PG&E.
• January 25, 2024- The CPUC approved the expanded pilots revised decision. • January 30, 2024- (Track A)- There was a press conference held by a group of 20 Democratic Legislators calling for the repeal of income-graduated fixed charge. AB 1999 would repeal the income-graduated fixed charge approved under AB 205 (2022) and replace it with a $5 fixed charge for CARE customers and a $10 fixed charge for all other residential customers.
Net Billing Tariff (NBT):
• December 15, 2022- The CPUC issued a PD that was voted out unanimously. New solar customers that sign up after April 14, 2023, will be placed on NBT. This Proceeding created a successor Program to NEM 2.0 to address some of the identified issues with the existing Program. The objective is to increase equity and eliminate cost shifts onto lower income customers who are subsidizing, to some degree, residential solar owners.
• August 2, 2023- The CPUC issued a Proposed Decision on the remaining issues in the NBT proceeding, including virtual NEM, enhanced consumer protection, and fuel cell participation. • August 8 ,2023- Comments were filed by Joint CCAs: SDCP, PCE, Pioneer, SCP, RCEA, and SJCE. The comments argued that the Proposed Decision, with some adjustments, can improve bill clarity for NEM customers and future NBT customers.
• September 14, 2023- A California appeals court will hear a lawsuit seeking to overturn the CPUC’s rooftop solar decision which would significantly reduce the credits customers receive. • September 16, 2023- There was a letter signed by members of the Legislature on the NEM program for agricultural users.
• October 26, 2023- Joint CCAs have held ex parte meetings with the CPUC, and President Reynolds, who recommended meeting with the Energy Division.
• October 30, 2023- Energy Division released a Proposed Resolution approving the IOUs NBTs, with modifications.
Attachment: 2 Agenda Date: 2/15/2024
• November 2, 2023- CPUC has delayed their decision implementing Virtual Net Energy Metering (VNEM) and other aspects of NBT until November 16, 2023, at the earliest. • November 16, 2023- CPUC adopted revision 2 of the VNEM Decision. • November 20, 2023- PG&E requested an extension of time to comply with the Residential Net Billing Tariff to August 31, 2024. Pioneer led a coalition of CCAs that submitted a letter to the CPUC in support of the extension request to allow for a more enhanced customer service process. • December 14, 2023- CPUC granted an extension for PG&E until April 15, 2024. • December 20, 2023- An appeals court in San Francisco upholds the CPUC decision on the vote to overhaul rooftop solar rules. Protect Our Communities Foundation, Center for Biological Diversity, and the Environmental Working Group filed the lawsuit. This decision could be taken to the Supreme Court.
PG&E ERRA Compliance and ERRA Forecast:
• The ERRA Proceedings act as a review of an IOU’s prior year portfolio management and accounting and seeks to identify errors and discrepancies between PG&E’s revenue requirements vis-à-vis collected revenues through the IOUs’ General Rate Case (GRC) which ultimately affects CCA rates through the Power Charge Indifference Adjustment (PCIA).
• May 14, 2023- PG&E’s 2023 – 2024 ERRA Forecast and Testimony was released. • June 1, 2023- NewGen sent over the new rate forecast spreadsheet. The forecast looks good with the PCIA remaining negative over many vintages, but this will change before the October Update. • June 16, 2023- Keyes and Fox filed a Protest to PG&E's Forecast Application. • August 10, 2023- CalCCA filed a Protest to PG&E’s ERRA Trigger Application proposing a rate increase in November to correct and account for under-collections.
• September 6, 2023- CalCCA provided Testimony on the 2024 PG&E ERRA Forecast case and touched upon the fixed generation cost issue.
• October 16, 2023- PG&E’s October Update to its 2024 ERRA Forecast came out. Energy prices have softened relative to PG&E’s original forecast (which would, all else equal, cause PCIA rates to increase), but RA and RPS benchmarks have increased significantly since PG&E's filing (dampening the impact of energy prices).
All told, forecast rates increased relative to the original forecast across the board, but forecast rates remain negative for vintages 2021 and later.
• November 1, 2023- Keyes and Fox submitted comments on PG&E’s ERRA Trigger proposal and comments on PG&E’s October update.
• November 16, 2023- The CPUC unanimously approved the Alternate Proposed Decision and indicated that “the decision balances a myriad of competing interests- affordability, feasibility, safety, and reliability.” PG&E requested $15.4 billion for 2023 and the decision reduced that amount by $1.8 billion to $13.5 billion.
This is an 11% increase from the authorized 2022 revenue requirement. For the typical residential customer, their combined monthly electric and natural gas bill will increase by $32.62 or 12.8%, compared to PG&E’s request of $38.73 or 17.9% increase.
• November 30, 2023- The PD for the PG&E ERRA Forecast came out. There were a couple of disputed issues including whether to amortize the 2023 trigger balance over 6 months or 12. CalCCA was asking for 12 and PG&E was asking for 6 months. The CPUC adopted PG&E’s recommendation. The second issue was whether PG&E should apply a first-in-first-out methodology to the use of excess prior year RECs or a last-in-first-out methodology. The CPUC ruled with PG&E on a last-in-first-out methodology. • December 12, 2023- A revision to the proposed decision came out and CalCCA won its argument on first-in-first-out, meaning the CPUC is requiring PG&E to use a first-in-first-out methodology for RECs banked in or after 2019.
• December 29, 2023- PG&E submitted their Annual True-Up to change PG&E’s electric rates on January 1, 2024.
Attachment: 2 Agenda Date: 2/15/2024
Resource Adequacy:
• May 25, 2023- The CPUC issued a PD barring non-compliant LSEs from expansion for two calendar years following a system RA deficiency.
• June 14, 2023- CalCCA filed Opening Comments recommending the CPUC fully reject the PD’s restrictions on LSE expansion due to RA deficiencies and modify the RA deficiency penalty. • June 19, 2023- CalCCA filed reply comments on June 19, 2023. • June 27, 2023- a Redlined PD was issued. The revisions included: adopting a one percent minimum threshold for RA deficiencies that would limit CCA expansions; clarifying that if an LSE “cures” its year-ahead RA deficiency in the month-ahead timeframe, the year-ahead deficiency will not be applied to the expansion requirement.
• June 29, 2023- The PD was adopted by the Commission.
• July 26, 2023- CalCCA and CCCE filed two Applications for Rehearing (AfR) of the decision to limit CCA expansion for two years due to uncured RA deficiencies. CalCCA’s PfR cited a lack of CPUC statutory authority to limit CCA expansion, and that it gives itself new unauthorized powers to needlessly discriminate against CCAs to prevent their growth; it also asserted, that without credible evidence, the CPUC determined that addition of new CCA load would be detrimental to grid reliability, and that the decision violates the CPUC’s legal requirement to apply RA enforcement measures in a nondiscriminatory manner, not just to CCAs.
• October 5, 2023- CalCCA filed a Petition for Writ of Review of Resolution E-5258 and D.23-08-052 over the decision with the First Appellate District.
• On September 19, 2023, PG&E and SCE submitted their annual CPE reports. PG&E is short RA for all months - up to 4,400 MW.
• October 12, 2023- The Commission opened the new RA proceeding through its Order Instituting Rulemaking (OIR). The OIR proposes the scope, schedule, and administration of this next RA proceeding. • November 9, 2023- CalCCA submitted comments recommending additional scoping items for the RA proceeding, including additional refinements to the RA program for the local RA CPE, compliance and penalty structure, SOD transactability, and RA import rules.
• December 14, 2023- CPUC denied CalCCA’s request for a rehearing of the decision on RA procurement obligations and the prohibition against CCA expansion for failure to comply. • January 17, 2024- Petition for Writ of Review prohibition of CCA expansion filed. Shell also filed a petition for somewhat different reasons. CPUC is seeking to consolidate since there are two filings. CalCCA did not oppose the motion.
• January 19, 2024- Proposals due in the RA proceeding for Track 1, addressing time-sensitive issues that must be resolved for the 2025 RA compliance year. CalCCA has identified 3 major problems that the RA proposals should address: RA market scarcity, the potential exercise of market power, and removing the economic incentives not to comply. CalCCA is seeking to remove the prohibition from CCA expansion in the event of noncompliance and add the ability for the CPUC to waive penalties if CCAs can show reasonable efforts to comply were unsuccessful. The RA proposal approved by CalCCA’s Board included a temporary waiver proposal for system and flexible RA from 2025 to 2027. Partial waivers would waive the penalty points and non-fiscal consequences and a full waiver would also be available that would waive financial penalties as well under certain circumstances. A slice of day waiver would also be available.
Utility Deenergization, PSPS, and EPSS:
• July 12, 2022-Pioneer, along with Joint CCAs, Joint Local Governments, and Rural County Representatives of California (RCRC), filed a motion with the CPUC on July 12, 2022, to consider EPSS issues in the Deenergization or its own Proceeding. The arguments in the motion seek to treat EPSS events with the same regulations and oversight as Public Safety Power Shutoff (PSPS) events. • September 21, 2023- The CPUC approved a PSPS citation program for violations of the established PSPS guidelines.
• August 30-31, 2023- PG&E provided a post PSPS report. A total of 3,928 customers were deenergized.
Attachment: 2 Agenda Date: 2/15/2024
• October 10, 2023- The Joint CCAs, RCRC, and Joint Local Governments had a meeting with the Public Advocates Office to see if there is agreement on the need to further do more with regards to Fast Trips. The Public Advocates Office indicated that the CPUC and Office of Energy Infrastructure Safety are not inclined to act to regulate Fast Trips and that more data is needed. The Public Advocates Office is looking to submit a report in the beginning of 2024.
• January 16, 2024- The data for December’s Fast Trips and YTD data came out. These are the following circuits in Pioneer’s territory with 8 or more outages in 2023:
o Placerville 2106 (EDH)- 19
o Apple Hill 2102 (EDH)- 18
o Shingle Springs 2109 (EDH)- 11
o Mountain Quarries 2101 (EDH)- 11
o El Dorado PH 2101 (EDH)- 11
o Clarksville 2104 (EDH)- 9
o Apple Hill 2104 (EDH)- 9
o Lincoln 1101 (Placer)- 8
o Penryn 1103 (Placer)- 8
o Penryn 1107 (Placer)- 8
o Brunswick 1105 (Nevada)- 17
o Brunswick 1106 (Nevada)- 15
• January 29, 2024- A data request was made by joint CCAs (including Pioneer) using the circuits listed above to PG&E requesting the number of customers served by each circuit, the number of life support customers, the number of medical baseline customers, and the number of critical facilities served by each circuit.
Provider of Last Resort (POLR):
• October 2, 2019- SB 520 passed requiring the establishment of a Provider of Last Resort (POLR). As part of the proceeding to implement SB 520, the CPUC is seeking to establish new policies to plan for and prevent catastrophic failures in the event of an unplanned return en masse of CCA customers to IOU service.
Additionally, the CPUC will review and update existing procedures and policies for Financial Security Requirements (FSR), reentry fees, and LSE deregistration process and compliance requirements. • July 31, 2023- CalCCA's Reply Briefs were submitted and address PG&E’s proposal to modify the FSR to reflect two months of forecast energy costs, other parties’ recommendations on elements of the existing FSR calculation, mandatory contract assignments, financial monitoring, and the duration of POLR service. • December 2023- Possible decision to the proceeding. CalCCA is waiting for that expected PD. In anticipation of the PD, CalCCA will be holding ex partes with CPUC Commissioners' Offices to reiterate CalCCA’s position on financial monitoring to limit monitoring to LSEs for only those that are at financial risk of failure and to deny PG&E's proposal that the FSR be based on two months of energy costs. CalCCA has circulated their slide deck of issues to be discussed at the ex parte meetings.
CEC Load Management Standards (LMS):
• October 12, 2022- The CEC adopted the Load Management Standards regulation which requires the development of a statewide standard tool for authorized rate data access by third parties that is compatible with each IOU, large POUs, and large CCAs with the idea that electricity customers or their authorized third-party agents can look at rates that the customer is eligible to switch and allow the customer to change the customer’s current rate to rates they are eligible for. • June 8, 2023- CEC staff provided a schedule of the key LMS adoption and compliance dates. • August 1, 2023- Pioneer, through Calpine, uploaded its rates and will continue to work with Calpine on uploading all time dependent rates to meet deadlines.
• By April 1, 2024, all large CCAs are required to file their plan for compliance with all LMS regulations. • January 17, 2024- Workshop on implementation of LMS. Comments on the workshop are due on January
31. Marketing and Outreach Report
February 15, 2024
Notable Accomplishments
We had a successful service launch in Grass
Valley and Nevada City, with just 57 total
op-outs. To date, here are some notable
statistics about our expansion efforts:
• 99% participation rate
• 4 million paid media impressions
• 300,000 listeners
• 90,000 in newsprint circulation
• Hosted and attended multiple community
events
• Pioneer staff attended meetings in each
member community to detail rate savings.
• El Dorado Hills Community Services District
re-enrolled with Pioneer.
• Staff has begun Strategic Planning for 2025
through 2027.
• Paid media campaigns continue to drive visitors
to the pages on our website.
• Pioneer’s Don Eckert was the guest speaker at
a community forum in Grass Valley that
attracted 125 people and aired on a KNCO
radio broadcast.
January Highlights
Expansion support efforts have proven to be very
successful. With a current participation rate of 99%, we met and exceeded initial goal of 90%.
Efforts for this successful expansion will serve as a road map for future expansions, as well as for a model for
other CCAs. Monthly Field Days are set, and we look
forward to our continued partnership with the Grass
Valley and Nevada City communities.
Expansion Success
Establish Pioneer as a trusted and
reputable energy provider in the new
expansion area.
– Established a landing page on Pioneer’s
website
– Developed visually appealing information
that met the needs of multiple audiences
– Participated in town hall meetings
– Proactive earned, paid and social media
campaigns
– Mailed four proactive mailers, in addition to
required regulatory mailers, to increase
understanding and answer frequently
asked questions
Meeting Strategic Goals
Engage with 85% of the population in the
expansion area at least seven times (approx.
94,976 impressions).
– More than 4 million impressions
– 300,000 listeners
– 90,000 in newsprint circulation
Understand public opinion by gaining insights
into the perspectives of various audiences.
– Conducted expansion survey
– Participated in town hall meetings
– Partnered with community influencer and
former publisher of The Sacramento Bee to
participate in a Grass Valley Community Forum
General Awareness
Our general awareness campaign is running and continues to drive impressions through newsprint, radio, television, out-of-home/bus shelters, Google ads and paid social media ads.
Gold Country Media –
Auburn Journal, Lincoln
News and Roseville
Tribune
– 127,000 circulation
The Mountain Democrat
– 55,000 circulation
• Newsprint Ads
Audacy Radio
Over the air
– KKDO 94.7
– KUDL 106.5 The End
– KSEG 96.9 The Eagle
– 1,084,800 impressions
Streaming
– 314,842 impressions
OTT/CTV
– 117,059 impressions
– 128 clicks/.11 CTR
iHeartRadio
– KFBK 93.1
– Talk 650 KSTE
– 404,610 impressions
Public Radio – Capital Public
Radio
– 90.9 KXJZ
– 88.9 KXPR
– Banner Ads/App Ads/
Newsletter Ads
– 261,756 impressions
• Radio
• Out of Home
– Bus Shelters - El Dorado
County
– 2.2M impressions (Dec-May)
• Television
– KCRA 3
– 2.3 M impressions
Google and paid social ads
are running
• Paid Digital Advertising
– 835,441 impressions
– 5,128 clicks
• Google
• Paid Social Media
Ads are created to emphasize
core messages about savings
and community commitment,
as well as to drive traffic to
the home page.
We continue to see consistent
website traffic, with the home
page, energy savings tips,
and our residential customer
pages being the most visited
pages.
• Website Visits
VIEWS
23,461
100% of
total
USERS
9,929
100% of
total
Pioneer
Community
Energy 3,663 2,616
Pioneer
Community
Energy |
Home Energy
Savings Tips
2,784 1,133
Pioneer
Community
Energy |
Residential
2,406 1,501
– 113,442 impressions
– 1,856 clicks
Social Media
Posts with the greatest engagement
continue to be those with content
featuring our staff or active
involvement in local events.
Posts generating the most
engagement in January were those
with staff assisting a customer; the
relaunch of our “how to calculate
your savings” video; and promotion
of our field days.
Event Spotlight
Outreach efforts continue as staff identifies strategic ways to raise Pioneer’s profile throughout our service territory. • Lincoln Chamber of Commerce Field Day
• Auburn Senior Center Field Day
• Board Tour of California Independent System Operator (ISO) • Public comments related to 2023 success and 2024 rate adjustments
• Participation in Chambers of Commerce throughout our
territory, including attending and sponsoring Government Relations Committees, and heightening Pioneer’s brand
awareness through event sponsorships.
• The January 26 Grass Valley Community Forum featured
Pioneer Executive Director Don Eckert and Grass Valley City Councilmember Tom Ivy. The event featured an open
question-and-answers segment, allowing for in–depth
discussion about the issues that matter most to customers.
Pioneer Community Energy
Glossary of Terms
CAISO - California Independent System Operator - a non-profit independent system operator that oversees the operation of the California bulk electric power system, transmission lines and electricity market generated and transmitted by its members (~80% of California's electric flow). Its stated mission is to "operate the grid reliably and efficiently, provide fair and open transmission access, promote environmental stewardship and facilitate effective markets and promote infrastructure development. CAISO is regulated by FERC and governed by a five-member governing board appointed by the governor.
CALCCA - California Community Choice Association -Association made up of Community Choice Aggregation {CCA) groups which represents the interests of California's community choice electricity providers.
CARB- California Air Resources Board -The CARB is charged with protecting the public from the harmful effects of air pollution and developing programs and actions to fight climate change in California.
CEC - California Energy Commission
CPUC- California Public Utility Commission
C&I - Commercial and Industrial - Business customers
CP- Compliance Period-Time period to become RPS compliant, set by the CPUC (California Public Utilities Commission)
DA- Direct Access - An option that allows eligible customers to purchase their electricity directly from third party providers known as Electric Service Providers (ESP).
DA Cap - the maximum amount of electric usage that may be allocated to Direct Access customers in California, or more specifically, within an Investor-Owned Utility service territory.
DA Lottery- a random drawing by which DA waitlist customers become eligible to enroll in DA service under the currently-applicable Direct Access Cap.
DA Waitlist- customers that have officially registered their interest in becoming a DA customer but are not yet able to enroll in service because of DA cap limitations.
DAC- Disadvantaged Community
DASR- Direct Access Service Request- Request submitted by C&I to become direct access eiigible.
Demand - The rate at which electric energy is delivered to or by a system or part of a system, generally expressed in kilowatts {kW}, megawatts (MW}, or gigawatts {GW), at a given instant or averaged over any designated interval of time. Demand should not be confused with Load or Energy.
DER- Distributed Energy Resource -A small-scale physical or virtual asset {e.g. EV charger, smart thermostat, behind-the-meter solar/storage, energy efficiency} that operates locally and is connected to a larger power grid at the distribution level.
Distribution -The delivery of electricity to the retail customer's home or business through low voltage distribution lines.
DLAP- Default Load Aggregation Point - In the CAISO's electricity optimization model, DLAP is the node at which all bids for demand should be submitted and settled. Pioneer settles its CAISO load at the PG&E DLAP as Pioneer is in the PG&E transmission access charge area.
DR- Demand Response - An opportunity for consumers to play a significant role in the operation of the electric grid by reducing or shifting their electricity usage during peak periods in response to time-based rates or other forms of financial incentives.
DWR - Department of Water Resources - DWR manages California's water resources, systems, and infrastructure in a responsible, sustainable way.
ELCC- Effective Load Carrying Capacity - The additional load met by an incremental generator while maintaining the same level of system reliability. For solar and wind resources the ELCC is the amount of capacity which can be counted for Resource Adequacy purposes.
EPIC - Electric Program Investment Charge -The EPIC program was created by the CPUC to support investments in clean energy technologies that provide benefits to the electricity ratepayers of PG&E, San Diego Gas & Electric Company {SDG&E}, and Southern California Edison Company {SCE}
ERRA - Energy Resource Recovery Account - ERRA proceedings are used to determine fuel and purchased power costs which can be recovered in rates. The utilities do not earn a rate of return on these costs, and only recover actual costs. The costs are forecast for the year ahead.
If the actual costs are lower than forecast, then the utility gives money back, and vice versa.
ESP- Energy Service Provider - An energy entity that provides service to a retail or end-use customer.
EV- Electric Vehicle
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GHG - Greenhouse gas - water vapor, carbon dioxide, tropospheric ozone, nitrous oxide, methane, and chlorofluorocarbons (CFCs). A gas that causes the atmosphere to trap heat radiating from the earth. The most common GHG is Carbon Dioxide, though Methane and others have this effect as well.
GRC- General Rate Case - Proceedings used to address the costs of operating and maintaining the utility system and the allocation of those costs among customer classes. For California's three large IOUs, the GRCs are parsed into two phases. Phase I of a GRC determines the total amount the utility is authorized to collect, while Phase II determines the share of the cost each customer class is responsible and the rate schedules for each class. Each large electric utility files a GRC application every three years for review by the Public Advocates Office and interested parties and approval by the CPUC.
GWh - Gigawatt-hour - The unit of energy equal to that expended in one hour at a rate of one billion watts. One GWh equals 1,000 megawatt-hours.
IEP - Independent Energy Producers - California's oldest and leading nonprofit trade association, representing the interest of developers and operators of independent energy facilities and independent power marketers.
IOU - Investor Owned Utility- A private electricity and natural gas provider. !RP- Integrated Resource Plan -A plan which outlines an electric utility's resource needs in order to meet expected electricity demand long-term.
kW- Kilowatt - Measure of power where power (watts)= voltage (volts) x amperage (amps) and 1 kW = 1000 watts
kWh - Kilowatt-hour- This is a measure of consumption. It is the amount of electricity that is used over some period of time, typically a one-month period for billing purposes. Customers are charged a rate per kWh of electricity used.
LCFS- Low Carbon Fuel Standard -A CARB program designed to encourage the use of cleaner low-carbon fuels in California, encourage the production of those fuels, and therefore, reduce greenhouse gas emissions.
LCR - Local {RA) Capacity Requirements -The amount of Resource Adequacy capacity required to be demonstrated in a specific location or zone.
LMP- Locational Marginal Price - Each generator unit and load pocket is assigned a node in the CAISO optimization model. The model will assign a LMP to the node in both the day- ahead and real time market as it balances the system using the least cost. The LMP is comprised of Page I 3
three components: the marginal cost of energy, congestion and losses. The LMP is used to financially settle transactions in the CAiSO.
Load - An end use device or customer that receives power from an energy delivery system.
Load should not be confused with Demand, which is the measure of power that a load receives or requires. See Demand.
SE - Load-serving Entity - Entities that have been granted authority by state, local law or regulation to serve their own load directly through wholesale energy purchases and have chosen to exercise that authority.
NEM - Net Energy Metering-A program in which solar customers receive credit for excess electricity generated by solar panels.
NRDC- Natural Resources Defense Council
OIR - Order Instituting Rulemaking - A procedural document that is issued by the CPUC to start a formal proceeding. A draft OIR is issued for comment by interested parties and made final by vote of the five Commissioners of the CPUC.
MW - Megawatt - measure of power. A megawatt equals 1,000 kilowatts or 1 million watts.
MWH - Megawatt-hour- measure of energy
NP-15 - North Path 15 - NP-15 is a CAISO pricing zone usually used to approximate wholesale electricity prices in northern California in PG&E's service territory.
PCCl - RPS Portfolio Content Category 1- Bundled renewables where the energy and REC are dynamically scheduled into a California Balancing Authority (CBA) such as the CAISO. Also known as "in-state" renewables.
PCC2 - RPS Portfolio Content Category 2 - Bundled renewables where the energy and REC are from out-of-state and not dynamically scheduled to a CBA.
PCC3 - RPS Portfolio Content Category 3 - Unbundled REC PCIA or "exit fee" - Power Charge Indifference Adjustment (PCIA) is an "exit fee" based on stranded costs of utility generation set by the California Public Utilities Commission. It is calculated annually and assessed to customers of CCAs and paid to the IOU that lost those customers as a result of the formation of a CCA.
PCL- Power Content Label - A user-friendly way of displaying information to California consumers about the energy resources used to generate the electricity they sell, as required by AB 162 (Statue of 2009) and Senate Bill 1305 (Statutes of 1997).
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PD - Proposed Decision - A procedural document in a CPUC Rulemaking process that is formally commented on by Parties to the proceeding. A PD is a precursor to a final Decision voted on by the five Commissioners of the CPUC.
Pnode - Pricing Node - In the CAISO optimization model, it is a point where a physical injection or withdrawal of energy is modeled and for which a LMP is calculated.
PPA - Power Purchase Agreement - A contract used to purchase the energy, capacity and attributes from a renewable resource project.
RA - Resource Adequacy - Under its Resource Adequacy (RA) program, the California Public Utilities Commission (CPUC) requires load-serving entities-both independently owned utilities and electric service providers-to demonstrate in both monthly and annual filings that they have purchased capacity commitments of no less than 115% of their peak loads.
RE - Renewable Energy - Energy from a source that is not depleted when used, such as wind or solar power.
REC - Renewable Energy Certificate - A REC is the property right to the environmental benefits associated with generating renewable electricity. For instance, homeowners who generate solar electricity are credited with 1 solar REC for every MWh of electricity they produce.
Utilities obligated to fulfill an RPS requirement can purchase these RECs on the open market.
RPS - Renewable Portfolio Standard - Law that requires CA utilities and other load serving entities (including CCAs) to provide an escalating percentage of CA qualified renewable power (culminating at 33% by 2020) in their annual energy portfolio.
SCE - Southern California Edison
SDG&E- San Diego Gas & Electric
SGIP- Self-Generation Incentive Program -A program which provides incentives to support existing, new, and emerging distributed energy resources (storage, wind turbines, waste heat to power technologies, etc.)
TCR EPS Protocol -The Climate Registry Electric Power Sector Protocol - Online tools and resources provided by The Climate Registry to assist organizations to measure, report, and reduce carbon emissions.
Time-of-Use (TOU) Rates - The pricing of delivered electricity based on the estimated cost of electricity during a particular time-block. Time-of-use rates are usually divided into three or four time-blocks per 24-hour period (on-peak, mid-peak, off-peak and sometimes super off-peak) and by seasons of the year (summer and winter). Real time pricing differs from TOU rates Page I 5
in that it is based on actual (as opposed to forecasted) prices that may fluctuate many times a day and are weather sensitive, rather than varying with a fixed schedule.
TURN -The Utility Reform Network - A ratepayer advocacy group charged with ensuring that California IOUs implement just and reasonable rates.
Unbundled RECs - Renewable energy certificates that verify a purchase of a MWH unit of renewable power where the actual power and the certificate are "unbundled" and sold to different buyers.
VPP - Virtual Power Plant - A cloud-based network that leverages an aggregation of distributed energy resources (DERs) to shift energy demand or provide services to the grid.
For example, thousands of EV chargers could charge at a slower speed and hundreds of home batteries could discharge to the grid during a demand peak to significantly reduce the procurement of traditional supply resources.
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