Board of
Directors
Regular Meeting
May 26, 2022
Moment of Silence
for Uvalde
3 Regular
Meeting
Agenda
Welcome
Call to Order
Pledge of Allegiance
Roll Call
Items to be Added, Withdrawn, or Reordered on the Agenda Public Comment for Items Not on the Agenda
Consent Agenda
Regular Agenda Items:
7. Presentation of the FY 2023 Operating Budget
8. Discussion on 2022 Legislative Platform and AB 2838; Update on Legislative and Regulatory Items
9. Update on Power Resources
10. Update on Customer Energy Programs
Reports by Management and General Counsel
Director Comments
Adjournment
4 Roll
Call
Items to
be Added,
Withdrawn
or
Reordered
on the
Agenda
Public
Comment
for Items
NOT
on the
Agenda
8 Consent
Agenda
1. Approval of Findings to Continue Holding
Remote/Teleconference Meetings Pursuant to
Assembly Bill 361
2. Approval of January 20, 2022 Meeting Minutes
for Regular and Closed Session
3. Receive and File Treasurer’s Report for Period
Ending 3/31/22
4. Update on Back Office Metrics/Dashboard
5. Update on Marketing and Public Relations
6. Approval of San Diego Community Power
Ticket and Pass Distribution Policy
9 Recommendation:
Receive and file the presentation of the
Fiscal Year (FY) 2023 Operating Budget
Presenter:
Dr. Eric Washington
Chief Financial Officer
Item 7
Presentation of the Fiscal Year (FY) 2023 Operating
Budget
Budget Development for FY 2022-23
The schedule for budget development is the following.
Develop Operating
Revenue Estimate
Develop Operating
Expense Estimate
Develop financial
plan for credit rating
in 3-years
February March-April
Staff develop
operating budgets
Baseline budget is
developed
May
Strategic planning
sessions with SDCP
Board
SDCP Board Preview
(Presentation)
June
Financial and Risk
Management
Committee Review
SDCP Board Approval
July 1st Budget
Implemented
Mid-year budget
review (February)
Budget amendments
as necessary
11 • Focus on community programs by up
Programs team and launching initial pilot
programs.
• Phase 4 enrollment of the County of
San Diego and National City during the
first half of calendar year 2023.
• Continued outreach through community
events, sponsorships and advertising
to inform customers about SDCP.
• High cost of energy with continued
increases in forward electricity prices.
Budget - Highlights
12 Budget – Summary
Item FY 23 Proposed
Budget, $M
FY 22 Amended,
$M
Gross Revenue 696.2 380.8
Less Uncollectible Accounts (7.0) (2.7)
Net Revenue 689.2 378.1
Cost of Energy 641.9 329.5
Non-Energy Costs 31.7 11.7
Debt Service 6.3 0.7
Total Expense 680.0 341.9
Net Position 9.2 36.1
Ratepayer
Revenue (Net),
$689M (99%of
GR)
FY 23 Operating Budget
Revenue Projection
Cost of Energy,
$642M (93% of
Total Expense)
Personn
el, …
Profession
al … Programs, $1M, General and Administrative 0% ,
$3M, 0%
FY 23 Operating Budget
Expense Projection
* Pro Forma estimates are as of May 2022
13 Budget – Key Revenue Assumptions
• Opt-out rate is assumed to be 5%.
• Participation rate in Power100 assumed at 7% of revenues (currently 6.4% as of 5/9/22).
• Uncollectible accounts assumed at 1% of total gross revenue. • Enrollment of Phase 4 expected to begin during the first half of 2023.
Item FY 23 Proposed, $M FY 22 Amended, $M
Gross Revenue 696.2 380.8
Less Uncollectible Accounts (7.0) (2.7)
Net Revenue 689.2 378.1
14 Budget – Cost of Energy
FY23 Budget Projections, $M Feb 2022 May 2022
Cost of Energy 597.8 641.9
• Outlook for future years has worsened due to continued increases in forward electricity prices, with natural gas prices having reached 18-year highs. • Between February and May, projected cost of energy for FY23 has increased 7.4% or $44.1 million.
15 Proposed FY 2022-
23 Budget -
Highlights Budget by Category
Revenue
Cost of Energy
Includes Phase 1 through Phase
3. Phase 4 starts in 2023.
Assumes hedging as of May
2022 and forward prices for the
remaining, unhedged energy.
FY22
$378.1m
FY22
$329.5m
Professional
Services
Personnel
Marketing and
Outreach
General and
Administrative
FY23
$689.2m
FY23
$641.9m
Data Management and SDG&E
fees comprise majority.
FY22
$5.1m
FY23
$17.0m
14 new staff and 2 interns - Power Services to 8 staff and Programs to 7 staff.
FY22
$4.0m
Amended
$7.5m
Mandatory enrollment notices,
communication consultants,
mailers, printing, sponsorships.
FY22
$1.7m
Amended
$4.1m
Office space, equipment,
membership dues, and other
general operational costs.
FY22
$0.8m
Amended
$2.5m
Net Position
+9.2m
FY23 FY22
Programs Initial pilot programs launch and
other community-based program efforts.
FY22
$0.0m
Amended
$0.7m
16 FY 2023 Budget –
Details
17 Budget – CCA Comparison
Community Choice
Aggregator
Years Est.
(JPA eff.
Date)
Customer
Accounts*
Cost of
Energy, $M**
Non-Energy
Costs, $M
Net
Ratepayer
Revenue, $M
Energy
Costs/Net
Revenue (%)
Clean Power Alliance Jun 2017 972,500 834.28 32.665 895.25 93% San Diego Community
Power Oct 2019 931,675 641.94 33.960*** 689.21 93%
East Bay Community Energy Dec 2016 613,263 442.34 37.757 499.70 89% Marin Clean Energy Dec 2008 470,000 410.70 49.436 483.96 85% Central Coast Community
Energy Mar 2018 296,000 326.30 32.179 351.53 93%
Peninsula Clean Energy Feb 2016 296,000 216.70 24.994 222.24 98% *Customer accounts from CalCCA as of October 2021, SDCP customer accounts are projected as of April 2023 **Cost of energy, non-energy costs and ratepayer revenue are from FY22 adopted budgets. SDCP costs and revenue are from its May 2022 Proforma. ***SDCP includes debt service costs of $6.3M.
18 Recommendation:
Receive and file the presentation of the
Fiscal Year (FY) 2023 Operating Budget
Presenter:
Dr. Eric Washington
Chief Financial Officer
Item 7
19 Recommendation:
Review and discuss SDCP 2022 Legislative Platform;
Discuss SDCP position on AB 2838; Receive and
discuss update on pending legislation and regulatory
items.
Presenter:
Laura Fernandez
Director of Regulatory and Legislative Affairs
Item 8
Discussion on 2022 Legislative Platform and AB
2838; Update on Legislative and Regulatory Affairs
20 Accelerate Deep
Decarbonization
Promote Local
Development
Stabilize
Community Choice
Discussion on 2022 Legislative Platform: Three Major Priorities 21 Discussion on 2022 Legislative
Platform Highlight:
Governance and Authority • Support legislation
that makes it easier
for other cities and
counties to form or
join a CCA
• Oppose legislation
that limits the local
decision-making
authority for CCAs
(e.g. rate-setting and
procurement)
22 Discussion
on 2022
Legislative
Platform
Highlight:
Environment
al Justice
• Legislation that enables communities of concern
to have affordable, reliable and clean energy
• Legislation that enables all communities to
participate in deep decarbonization efforts
• Legislation that would reduce local air pollution,
reduce other negative local impacts associated
with energy production, and boost adoption of
distributed energy resources within communities
of concern
Support:
• Legislation and initiatives that have the potential
to disproportionately and negatively impact
communities of concern
Oppose:
23 Discussion on 2022 Legislative
Platform Highlight:
Environmental Sustainability • Support: • Legislation that encourage the conservation of energy resources as well as the
development of dynamic load-shifting
capabilities
• Legislation and funding for renewable and
advanced energy technology that increase
efficient consumption
• Legislation and funding for pilot energy and
resource efficiency programs
24 Discussion on 2022 Legislative
Platform Highlight: Local
Economic Development • Support: • Legislation that is consistent with SDCP’s commitment to an inclusive and sustainable workforce
• Legislation that enhances opportunities for CCAs to
promote local economic development through locally
designed programs
• Efforts to enhance development of local and regional
sources of renewable energy
• Legislation that enables CCAs to collaborate with their member jurisdictions on local energy resources and
projects to advance environmental objectives
25 Discussion on AB
2838 • Will be heard June 2 in Senate Energy, Utilities and Communications Committee
• CalCCA sent Floor Alert with “Oppose Unless
Amended” Position on April 29 • Floor Alert notes AB 2838 violates well established ratepayer indifference
principle by allowing cost recovery from
customers who did not participate in or
benefit from program
• Floor Alert also notes the bill isn’t
necessary because there are established
CPUC procedures in place that would
permit program closure
26 Update on Regulatory Item:
Voluntary Allocation & Market
Offer (VAMO)
• SDCP has an opportunity to secure
voluntary allocations (VA) of PCIA-eligible
renewable resources from SDG&E
• These are renewable resources that SDCP
customers already pay above market costs
for through the PCIA, but do not yet count
towards SDCP’s portfolio
27 Update on Regulatory Item:
Voluntary Allocation & Market Offer (VAMO)
• In 2021, the CPUC ordered the IOUs to offer PCIA-paying LSEs voluntary allocations (VA) of PCIA-eligible renewable resources, and then sell any unallocated resources through an annual market offer (MO) process
• SDCP now has an opportunity to secure voluntary allocations of PCIA-eligible renewable resources from SDG&E at the
Market Price Benchmark, which is established by the current market price in any given year and is the same price at which the PCIA is set
28 Update on Regulatory Item:
Voluntary Allocation & Market Offer (VAMO)
• Voluntary Allocations are a “slice” of an IOU’s entire PCIA-eligible RPS portfolio, therefore SDCP does not have discretion over resource mix.
• Considered a tradeoff to provide option for allocation without allowing cherry picking of desirable resources from IOU portfolios • SDG&E’s PCIA RPS portfolio includes PCC0 resources
• There is a risk that out-of-state PCC0s will transfer as PCC3s (unbundled RECs- but charged to SDCP at the PCC1 price) • PCC3s are valued at a significant discount to PCC1, are discouraged by the JPA, and are difficult to remarket
29 Item 8
Recommendation:
Review and discuss SDCP 2022 Legislative Platform;
Discuss SDCP position on AB 2838; Receive and
discuss update on pending legislation and regulatory
items.
Presenter:
Laura Fernandez
Director of Regulatory and Legislative Affairs
30 Recommendation:
Receive and file the update on Power
Resources
Presenter:
Byron Vosburg
Managing Director
Item 9
Update on Power Resources
31 Item 9: Update on Power Resources
Voluntary Allocation Market Offer (VAMO)
• CPUC has created VAMO process via which LSEs can elect to receive allocations of renewable energy from PCIA-eligible resources in IOU portfolios • SDCP will have an opportunity to receive long-term and short-term renewable energy from SDG&E’s portfolio of resources procured on behalf of SDCP customers before they departed SDG&E service
• SDCP and SDG&E anticipated VAMO and incorporated SDCP’s allocation into the long-term renewable energy contract that was approved and signed in 2021 • No action necessary at this time, but Staff will discuss with and present a recommendation to Committees and Board in the coming weeks 32 Item 9: Update on Power Resources
2021 Power Source Disclosure (PSD)
• Annual reporting process
• Filed to CA Energy Commission (CEC) by June 1 of each year for previous year’s retail energy sales
• Once reviewed and finalized, PSD will inform SDCP’s Power Content Label (PCL) • PCL will be reviewed with SDCP Board in the coming months prior to distribution 33 Item 9: Update on Power Resources
2021 Power Source Disclosure (PSD)
34 Item 9: Update on Power Resources
Clean Firm RFO
• CPUC requires all Load Serving Entities (LSEs) to contract for new capacity to be online between 2023-2026 for Mid-Term Reliability (MTR) – D.21-06-025 • One category of new resource requirements is “firm, zero emitting” or “clean firm” resources • capacity factor of at least 80%
• no associated energy storage or reliance upon weather • eligible projects are expected to be geothermal and bioenergy resources • SDCP’s target for the Clean Firm category is ~40 MW, to be online by 2026 • Staff will release an RFO tomorrow, 5/27, for proposals for eligible resources • Offers to be due in early July, followed by Staff and Ad-Hoc Contracts Committee review • Contracts will be reviewed with FRMC and Board prior to execution 35 Recommendation:
Receive and file the update on Power Resources
Presenter:
Byron Vosburg
Managing Director
Item 9
36 Recommendation:
Receive and file the update on Customer
Energy Programs
Presenter:
Colin Santulli
Director of Programs
Item 10
Update on Customer Energy Programs
37 Existing Programs Net Energy Metering: • Program to support customers that installed on- site generation
Feed-In-Tariff:
• Renewable energy
purchasing program which
sets the rules and price for
the purchase of electricity
from small-scale wholesale
renewable electricity projects
within service territory
• Opened in March 2022,
inquires about program but
no applications submitted
Next Steps • Track progress and review
program guidelines to identify
areas for improvement.
38 Under Development
Disadvantaged Communities Green Tariff & Community
Solar Green Tariff
• CPUC Allocated 14.39 MW in Nov 2021, largest
allocation in the state
• 20% bill discount on generation and distribution
available to CARE/FERA residential customers and
those living in DACs
• All customers would receive 100% renewable energy
Next Steps
• Application Advice Letter to be submitted to CPUC in
October
• Launch expected early 2023
39 May 2022
May 2022 Summer 2022 Fall 2022 Early 2023
Community Power Plan
Community
Needs
Assessment
Market
Assessment
Program Ranking
and Plan
Development
Community
Power Plan
Adoption
Program
Prioritization
Framework
Winter 2022
Next Steps
• Board and Community Advisory Committee Goal Setting Workshop • Community listening sessions & stakeholder interviews • Information Gathering via surveys, community event attendance, and public goal setting workshops 40 Funding Opportunities
Elect to Administer
(ETA)
Easiest method to access funds CPUC funds to
conduct energy efficiency work
Restrictive cost-effectiveness requirements makes
programs difficult to design and implement
Funding available is expected to be <$1M/yr and
reducing over time
Regional Energy
Network (REN)
Significant effort to form and manage
Significant higher funding potential and program
design flexibility
Intended to fill gaps in existing programs and serve
hard-to-reach customers
Next Steps
Pending FY22-23 budget approval, competitive
procurement for technical consultant
Hire staff to lead development of application(s) and
program management
41 Recommendation:
Receive and file the update on Customer
Energy Programs
Presenter:
Colin Santulli
Director of Programs
Item 10
Adjournment
Board of
Directors
Next Regular Meeting
June 23, 2022