Board of
Directors
Closed Session
June 22, 2023
Welcome
&
Call to
Order
Roll
Call
4 Public
Comment
for Closed
Session
Items
6 Closed
Session
Agenda
1. PUBLIC EMPLOYEE PERFORMANCE
EVALUATION PURSUANT TO GOVERNMENT
CODE SECTION 54957
Title: Chief Executive Officer
2. CONFERENCE WITH LABOR NEGOTIATORS
PURSUANT TO GOVERNMENT CODE
SECTION 54957.6
Agency designated representative(s):
General Counsel Unrepresented employee:
Chief Executive Officer
7 Special
Meeting
Agenda
Report from
Closed Session
Board of
Directors
Regular Meeting
June 22, 2023
Warm Welcome!
Jack Clark
Chief Operating
Officer
Items to
be Added,
Withdrawn
or
Reordered
on the
Agenda
Public
Comment
for Items
NOT
on the
Agenda
12 Consent
Agenda
1. Approval of February 23, 2023 and March 23, 2023 Meeting Minutes
2. Receive and File Treasurer’s Report for Period Ending April 30, 2023
3. Receive and File Update on Power Services
4. Receive and File Update on Human Resources
5. Receive and File Update on Customer (Back Office) Operations
6. Receive and File Update on Marketing and Public Relations
7. Receive and File Update on Regulatory and Legislative Affairs
8. Receive and File Update on Community Advisory Committee
9. Approval of Second Amendment to Professional Services Agreement with Keyes and Fox for up to $1,300,000 for Legal and Regulatory Services through May 31, 2026
10.Approval of Third Amendment to the Professional Services Agreement with Maher Accountancy for up to $297,000 for accounting services through FY2024.
11.Approval of Professional Services Agreement with Innovation Network for Communities for up to $350,000 for a Building and Housing Stock Analysis and Funding Gap Analysis Services through June 30, 2025
12.Approval of Community Advisory Committee Reappointment of Members for Terms Ending in 2023
Public
Comment
for
Consent
Agenda
14 Regular
Meeting
Agenda
13.Approval of Second Amendment to
CEO Employment Agreement
14.Approval of the FY 2023-24
Operating Budget and FY 2024-28
Capital Investment Plan
15.Update on the Disadvantaged
Communities and Community Solar
Green Tariff Programs
16.Approve the update to the
Collections and Delinquency Policy
to Include Residential Customers
17.Approval of the Renewable Power
Purchase Agreement (PPA) Yellow
Pine Solar III, LLC
15 Item 13
Approval of Second Amendment to CEO
Employment Agreement
Recommendation:
Approve the Second Amendment to the CEO
Employment Agreement
Presenter:
Nick Norvell, Assistant General Counsel
Public
Comment
for Item 13
17 Item 13
Recommendation:
Approve the Second Amendment to the CEO
Employment Agreement
18 Item 14
Approval of the FY 2023-24 Operating Budget
and FY 2024-28 Capital Investment Plan
Recommendation:
Approve the FY 2023-24 Operating Budget and FY
2024-28 Capital Investment Plan
Presenter:
Dr. Eric Washington,
Chief Financial Officer
Budget Development for FY 2023-24
The Board adopted 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
Strategic planning
sessions with SDCP
Board
Staff develop
operating budgets
Baseline budget is
developed
May
Financial and Risk
Management
Committee Review
SDCP Board Preview
(Information Item)
June
SDCP Board Approval July 1st Budget
Implemented
Mid-year budget
review (February)
Budget amendments
as necessary
20 Budget - History
SDCP was formed
In October 2019
CCA ordinances
passed in September
First Board meeting
in late October
CPUC Implementation
Plan submitted in late
December
2019 2020
Implementation
budget of $3,315,000
FY20 Net Loss of
$ (1,070,110)
2021
FY21 budget
of $42,810,047
FY21 Net Loss of
$ (14,048,637)
SDCP
Implementation
and Start-Up
SDCP Becomes
Official Electricity
Provider for First
5 Cities
2022
FY22 budget
of $297,409,999
FY22 Net Income of
$42,530,952
Full Enrollment - SD County and
National City
2023
FY23 Budget
of $695,936,815
FY23 Proj. Net Income of
$157,713,219
2024
All Enrollment
Completed Over the past 4-years we have
scaled to full enrollment and are
projected to substantially grow
reserves.
Full
Enrollment – First 5 Cities
FY24 Budget of
$1,002,038,709
FY24 Projected Net
Income of
$290,433,821
21 • First full fiscal year of full enrollment
from Phase 1, 2, 3 and 4.
• Thoughtfully scale the agency by adding
23 staff to grow to 59 total staff.
• Continued outreach through community
events, sponsorships and advertising
to inform customers about SDCP.
• Addition of Capital Investment Plan
(CIP) to shift programs and projects over
multi-year periods.
Budget - Highlights
22 Budget – Material Changes since May Meeting
Item 5/25 Board
Meeting, $M
6/22 Board
Meeting, $M Net Change Update
Net Revenue 1,292.5 1,292.5 -
Cost of Energy 971.6 948.5 (23.1)Energy contracts updated through June 2023.
Professional Services 22.9 22.9 -
Personnel Costs 13.4 13.2 (0.2)Minor logistical changes related to timing and sequencing of new hires.
General and Administration 7.5 7.9 0.4Minor administrative and staff development adjustments
Programs 0.3 0.3 -
Marketing and Outreach 2.9 2.9 -
Interest and Related Expense 2.4 2.4 -
Capital Improvement Program 4.2 3.8 (0.4)Adjustment to account for external funding Total (23.5)
23 75%
Cost of
Energy
FY24 Cost of Energy /
Net Revenue
Budget – Summary
Item FY 23 Amended
Budget, $M
FY 24 Proposed
Budget, $M
Gross Revenue 939.2 1,346.3
Less Uncollectible Accounts (9.4) (53.9)
Net Revenue 929.8 1,292.5
Cost of Energy 738.8 948.5
Non-Energy Costs 32.0 47.2
Subtotal Operating Expense 770.8 995.8
Debt Service 1.3 2.4
Capital Investment Program 0.0 3.8
Total Expense 772.1 1,002.0
Net Position 157.7 290.4
Cumulative Net Position 200.2 490.6
Days Cash on Hand 94.8 179.8
24 290.4 82.5 112.1 126.8 163.8
0 200
400
600
800
1,000
1,200
1,400
1,600
FY24 FY25 FY26 FY27 FY28
90-Day Threshold
Jun 2023
$M
Operating Budget, $M FY24 FY25 FY26 FY27 FY28
Net Revenue 1,292.5 1,151.1 1,180.8 1,225.8 1,271.9
Total Expense 1,002.0 1,068.6 1,068.7 1,099.0 1,108.0
Annual Reserve (Net Position) 290.4 82.5 112.1 126.8 163.8 Reserves (Cumulative Net Surplus) 490.6 573.2 685.3 812.1 975.9 90-Day Expense Target 250.5 267.2 267.2 274.8 277.0
180-Day Expense 501.0 534.3 534.4 549.5 554.0
180-Day Threshold
Aug 2024
Updated ProForma Projections
25 Budget – Personnel
Department
SDCP
(Existing/
Proposed)
Marin Clean
Energy
Clean Power
Alliance
East Bay
Community
Energy
Peninsula
Clean Energy
Central Coast
Com. Energy
Existing SDCP Staff 36 - - - - -
Data Analytics and
Account Services 6 16 16 14 8 7
Executive Team - 5 6 2 3 8
Finance 3 4 6 3 2 3
Human Resources 1 5 3 3 6 6
Operations 1 6 3 3 7 3
Power Services 4 7 14 11 7 4
Programs 1 20 6 12 8 2
Regulatory and
Legislative 3 11 10 8 8 2
Public Affairs 4 16 6 10 3 7
Total 59 90 70 66 41 35
26 Budget – Next Steps
Public
Comment
for Item 14
28 Item 14
Recommendation:
Approve the FY 2023-24 Operating Budget and FY
2024-28 Capital Investment Plan
29 Item 15
Update on Disadvantaged Communities (DAC-GT)
and Community Solar Green Tariff (CSGT)
Programs
Presenter:
Tessa Tobar, Program Associate
Recommendation:
Receive Update on Disadvantaged Communities (DAC-GT) and Community Solar Green Tariff (CSGT) Programs
30 Background
Disadvantaged Communities Green Tariff (DAC-GT) & Community Solar Green Tariff (CSGT) September 29, 2021
• SDCP filed its Tier 2 Advice Letter (“AL”) with the Commission requesting a capacity transfer from SDG&E under the DAC-GT and CSGT based on the Disadvantaged Communities (DACs) located within founding member agencies of SDCP.
November 18, 2021
• CPUC accepted and approved SDCP's allocation request of 14.39 megawatts (MW) under DAC-GT and 4 MW under the CSGT programs, making SDCP’s program the largest allocation in the state.
October 12, 2022
• Staff submitted a Tier 3 Implementation AL to become a Program Administrator of the DAC-GT and CSGT programs and seek approval of an Implementation Plan.
March 16, 2023
• The CPUC voted to adopt Resolution E-5246 on SDCP's DAC-GT and CSGT Implementation Plan AL. SDCP becomes DAC-GT & CSGT Program Administrators.
May 19, 2023
• SDCP filed a Tier 2 AL with the Commission requesting approval of the Solicitation Documents.
31 Overview
Disadvantaged Communities Green Tariff (DAC-GT) & Community Solar Green Tariff (CSGT) Description & Benefits
• Designed to increase renewable energy
generation among residential customers in DACs
per CalEnviroScreen 4.0.
• Offers 100% renewable energy to customers
who are eligible for the California Alternate Rates
for Energy (CARE) or Family Electric Rate
Assistance Program (FERA) discounts.
• Provides an additional 20% discount on the
electricity and delivery portion of the customers'
bills.
• Funding for DAC-GT & CSGT is fully refundable
by the CPUC.
Program Capacity & Enrollment*
Short-Term
*Eligible customers will be auto-enrolled in
2025 when new projects come online.
DAC-GT CSGT
MW Allocation 15.78 4.38
Estimated Customer
Enrollment
6,912 1,920
32 Eligibility
Disadvantaged Communities Green Tariff (DAC-GT) & Community Solar Green Tariff (CSGT)
The CPUC has defined an eligible DACs as
census tracts that either:
• Score at or above the 75th percentile (i.e.,
scoring in the top 25 percent statewide) in the
current CalEPA CalEnviroScreen 4.0 on a
statewide basis, or
• Are one of the census tracts that score in the
highest five percent of CalEnviroScreen’s
pollution burden, but that do not have an
overall score.
SDCP has over 40 eligible census tracts
located in Chula Vista, National City, and the
City of San Diego.
Figure 1: Qualifying Neighborhoods in SDCP Service Territory 33 Eligibility – cont.
Disadvantaged Communities Green Tariff (DAC-GT) & Community Solar Green Tariff (CSGT) DAC-GT
• DAC-GT projects can be sited in any DACs
in SDG&E’s and/or SDCP’s service
territory.
CSGT
• CSGT projects must be located in a DACs
in SDCP’s service territory.
• CSGT projects must be within 5 miles of
participating customers.
• CSGT projects must have a Community
Sponsor on behalf of the customers.
34 Community Sponsors
Community Solar Green Tariff (CSGT)
Eligibility & Requirements
• Must be a non-profit community-based
organization (CBO), local government
entity, or school.
• The sponsor’s role is to work with the
project developer to encourage program
participation in the community.
• Sponsors are required to include job
training and workforce development in their
efforts to benefit the local communities.
• SDCP will provide support to local CBOs
and Bidders to identify potential CSGT
project sites and sponsors.
Benefits
• Community Sponsors are eligible for a
20% bill credit for usage and up to
25% of the project’s estimated output.
• Ensures community involvement,
awareness, and substantial interest
of community members in subscribing
to the Project.
• Captures community-suggested host
sites, and verification that the site
chosen for the bid is consistent with
community preference.
35 Next Steps
June 2023
• SDCP expects to receive CPUC’s approval for the solicitation documents • SDCP is in progress to launch a dedicated webpage for DAC-GT & CSGT by the end of June June – August 2023
• SDCP will conduct outreach to solar developers and potential Community Sponsors by developing collateral and hosting multiple webinars
• Solicitation documents will go live on the SDCP website within 60 days of CPUC approval Early 2024
• SDCP will receive bids and select a solar developer(s) 2025
• Customers will be auto-enrolled when new projects come online in 2025 Deadline to respond to DAC-GT & CSGT RFO is TBD.
SDCP will return to the CAC and Board with updates.
Public Comment
for Item 15
37 Item 15
Recommendation:
Receive and File Update on Disadvantaged
Communities (DAC-GT) and Community Solar Green
Tariff (CSGT) Programs
38 Item 16
Approve the Update to the Collections and Delinquency
Policy to include Residential Customers
Presenter:
Dr. Eric Washington, Chief Financial Officer
Lucas Utouh, Director of Data Analytics and Account Services Recommendation:
Approve the Update to the Collections and
Delinquency Policy to include Residential Customers
39 1. Provide a framework for SDCP staff and Back Office Service provider to better serve our customers, to treat them with respect and dignity, and to set clear expectations on the handling of past due customer charges (arrearages).
2. Minimize and mitigate bad debts for the overall long term financial viability, resiliency and competitiveness of our organization.
Collections/Delinquency Policy Objectives
40 Programs Assisting Customers with Arrearages
1. Low-Income Home Energy Assistance Program (LIHEAP) program. Federally funded and administered by the California Department of Community Service and Development (CSD), offers up to $1,000 in financial aid for SDG&E customer bills.
2. Arrearage Management Payment (AMP) program.
Enrollee must be a current SDG&E residential customer and must participate in the CARE or FERA program.
Must have been a customer for minimum of six months and had at least one on-time payment in the last two years.
Once enrolled, participants must make on-time payments of their current month's bill amount for 12 consecutive months.
AMP will forgive a maximum of $8,000 upon successful completion in the program.
3. California Arrearage Payment Program (CAPP).
Over $2 billion state budget allocation for past-due energy bills during COVID; over $900 million allocated for IOUs and CCAs
Administered by Dept of Community Services (CSD)
Utilities including SDG&E applied credits automatically to eligible customer account balances for arrearages between 3/4/2020 and 12/31/2021. 41 Programs Assisting Customers with Arrearages
4. Percentage of Income Payment Plan (PIPP) pilot program. Allows a participant to pay a predetermined affordable percentage of their monthly income toward their electricity or natural gas bill.
Participants will receive a monthly bill cap for current charges set at four percent of their household’s monthly income.
Monthly bill caps will be standardized for households in two income tiers: 0-100 percent of Federal Poverty Guidelines, and 101-200 percent of Federal Poverty Guidelines.
5. Automatic Extended Payment Plans.
Ordered by the CPUC in June 2021 whereby:
IOUs directed to automatically enroll eligible customers per the below • Available to Residential and small business customers • With arrears 60+ days old as of 9/30/2021
• 24 month plans for residential customers, 24+ for small business customer • Small business customers’ monthly bill increase for payment plan capped at 10% & 5% for small business customers located in a DAC
• Customers may miss up to 3 payments before the payment plan is considered broken and arrearages may result in disconnection
42 State of Arrearages in Our Region
*Data from the California Public Utilities Commission (CPUC). 43 Residential Arrearages in Our Region
*Data from the California Public Utilities Commission (CPUC). 44 State of SDCP Arrearages
*SDCP’s Receivables aged 120 Days+ as of 6/20/2023.
Public Comment
for Item 16
46 Item 16
Recommendation:
Approve the Update to the Collections
and Delinquency Policy to include Residential
Customers
47 Item 17
Approval of the Renewable Power Purchase
Agreement (PPA) Yellow Pine Solar III, LLC
Presenter:
Andrea Torres, Senior Portfolio Manager
Recommendation:
Approve the Renewable Power Purchase Agreement
(PPA) Yellow Pine Solar III, LLC
48 SDCP Long-Term Procurement
• Goal of 75% renewables by 2027, 100% renewables by 2035 • Long-term PPAs provide developers with a certain revenue stream against which they can finance up-front capital requirements, incentivizing new incremental renewable energy and storage buildout.
• Long-term PPAs provide power supply cost certainty in our portfolio. • CPUC requires significant long-term purchase commitments for resource adequacy from new, incremental generation facilities that will achieve commercial operation during 2023 through 2026.
49 Yellow Pine 3 (NextEra): Overview
• Shortlisted from SDCP’s October 2022
Renewable + Storage RFP
• Co-located 35 MWac solar + 35 MWac (up from
30 MW), 4-hour battery energy storage in Clark
County, NV
• This PPA is for a portion of the 150 MW Yellow
Pine 3 project, which is the last phase of the 500
MW Yellow Pine project
• Located on Bureau of Land Management
property
• Project’s Special Use Permit and BLM right-of-way were approved in 2020-2021 with the initial phases for the entire 500 MW phased project
50 Yellow Pine 3: Key PPA Terms
• Product: RPS, capacity and ancillary services
• Fixed pricing for 20-year term
• Directly tied to CAISO system
• 35 MW of storage full capacity deliverability
status (FCDS)
• Guaranteed Commercial Operation Dates:
• Storage: 6/1/2025
• Solar: 10/1/2025
• SDCP receives financial compensation for
failure to meet certain development
milestones and performance requirements
51 Yellow Pine 3: Workforce Development and Community
Benefits
• NextEra will secure a PLA for the project as with prior phases • As part of NextEra’s ongoing operations in Nevada:
• Provides sole sponsorship of developing solar curriculum and research at University of Nevada Las Vegas, including mentoring the annual senior design project focused on solar energy systems
• Hosts Renewable Energy Training (RET) simulation lab at University of Nevada Las Vegas and College of Southern Nevada
• Presents at local high schools in Southern Nevada that highlight the benefits of renewable energy and growing career opportunities within the state
• Established an internship program that leads to career opportunities at NextEra solar and storage sites
52 Yellow Pine 3: Staff Analysis
• The Yellow Pine 3 project will contribute to our 100% renewable by 2035 target, providing over 100,000 MWh of renewable energy per year, in addition to energy management and capacity benefits from battery energy storage. • With commercial operations commencing in Q2 of 2025 and 35 MWs of FCDS, the Yellow Pine 3 project will contribute to SDCP’s compliance requirements for mid-term reliability.
• Pricing is competitive with comparable product offerings received from SDCP’s recent RFOs.
• NextEra is highly experienced developer, owner, operator, among the world’s largest renewable generators and battery energy storage developers, with over 28 GWs of renewables in operation and another 18 GWs in development.
Public Comment
for Item 17
54 Item 17
Recommendation:
Approve the Renewable Power Purchase Agreement (PPA)
Yellow Pine Solar III, LLC
Report by
Chief
Executive
Officer
56 Inaugural SDCP JEDI Council
Victoria Abrenica
Xiomalys Crespo
Samantha Gunzl
Tessa Tobar Tacko Diaite-Koumba Carly Newman
Chandra Pugh Eric Washington
57 We Are (still)
Hiring!
Director of Risk Management
Public Outreach Coordinator (2)
Digital Media Coordinator
Account Services Analyst
Financial Analyst
Procurement Manager
Human Resources Coordinator
New Employee Onboarding:
Aisha Cissna, Sr. Policy Manager
Starts on July 24th
58 SDCP in DC
Meetings were held with:
• Senator Dianne Feinstein's office
• Senator Alex Padilla's office
• Rep Scott Peters
• Rep Juan Vargas' office
• Rep Mike Levin's office
• Rep Darrell Issa's office
• Rep Sara Jacobs' office
• House Energy & Commerce
Committee Staff
• Edison Electric Institute
• White House Council on
Environmental Quality (CEQ)
• Environmental Protection Agency
(EPA)
59 North Park Music Fest – May 27
Equality Awards – May 19
EDC Annual Dinner – June 1
WILDCOAST Beach Bash – June 17
60 San Diego
Pride
March with us on July 15!
Report by
General
Counsel
Director
Comments
Board of
Directors
Special Meeting
June 22, 2023
64 Special
Meeting
Agenda
1. Approval of the Renewable Power
Purchase Agreement with ORNI 30, LLC
Recommendation: Approve the Renewable
Power Purchase Agreement with ORNI 30 LLC
for a term of 20 years and authorize the CEO to
execute the agreement.
Presenter:
Andrea Torres, Senior Portfolio Manager
65 SDCP Long-Term
Procurement
SDCP goals include:
• 600MW of new Local Wholesale Energy
and/or Battery Storage Projects (utility
scale projects within San Diego and
Imperial counties) by 2035.
• Create high quality local jobs in
renewable energy that support healthy
families and vibrant communities
66 Brawley Solar + Storage (Ormat): Overview
• Originally bid in to SDCP’s 2020 RFP.
• Hybrid 42 MWac solar + 35 MWac, 4-hour
battery energy storage in City of Brawley in
Imperial County.
• Located on privately owned land previously
zoned for agriculture adjacent to a wastewater
treatment plant and sharing interconnection to
Ormat’s North Brawley Geothermal Power Plant
substation.
• County Board of Supervisors approved the CUP
in May.
67 Ormat Brawley Solar + Storage: Key PPA Terms
• Product: RPS, capacity and ancillary services
• Fixed pricing for 20-year term
• Import project sited in the Imperial Irrigation
District
• Guaranteed Commercial Operation Date:
4/15/2025
• SDCP receives financial compensation for
failure to meet certain development
milestones and performance requirements.
68 Ormat Brawley: Workforce Development and Community
Benefits
• Located within a community of concern (25% percentile for CalEnviro screens). • At least 80% of all construction workers will be local to Imperial County and/or union labor. • Committed to hiring union-employed c-10 electrical contractors with certified electrical technicians
• Committed to a 20% journeyman/apprenticeship ratio for the Qualifying contractor’s work in a joint labor/management electrical apprenticeship
• Ormat will contribute $136,000 per year under the County’s Public Benefit Agreement. • Ormat will pay $550,000 to the County to mitigate the loss of farmland. • Committed to providing a prevailing wage.
• Ormat to develop a clean energy and battery storage workforce training program or STEM program within 20 miles of the project. Curriculum is to be provided to SDCP. 69 Ormat Brawley: Staff Analysis
• Ormat is an experienced developer, owner and operator, particularly with advanced battery applications.
• The Brawley project contributes toward SDCP’s local utility-scale project goals by 2035 and provides local community benefits for Imperial County.
• The Brawley project will provide over 120,000 MWh of locally sourced renewable energy per year in addition to energy management and capacity benefits. • With commercial operations commencing in Q2 of 2025, the Brawley project will contribute to SDCP’s compliance requirements for mid-term reliability. • Pricing is competitive with comparable product offerings received from SDCP’s RFOs.
Public
Comment
for Special
Meeting
Item 1
71 Special
Meeting
Agenda Recommendation: Approve the Renewable
Power Purchase Agreement with ORNI 30 LLC
for a term of 20 years and authorize the CEO to
execute the agreement.
Adjournment
Next Regular
Board of Directors Meeting
July 27, 2023