Board of
Directors
Regular Meeting
December 14, 2023
Welcome
&
Call to
Order
Roll
Call
4 Land
Acknowledgement
Warm Welcome to our New Hires!
Kiran Singh,
Director of Data
Analytics and IT
Patrick Welch,
Senior Legislative
Manager
Items to
be Added,
Withdrawn
or
Reordered
on the
Agenda
Public
Comment
for Items
NOT
on the
Agenda
9 Consent
Agenda
1. Approval of November 16, 2023 Meeting
Minutes
2. Receive and File Update on Programs
3. Receive and File Update on Power Services
4. Receive and File Update on Human
Resources
5. Receive and File Update on Customer
Operations
6. Receive and File Update on Marketing and
Public Relations
7. Receive and File Update on Community
Advisory Committee
Public
Comment
for
Consent
Agenda
11 Regular
Meeting
Agenda
8. Appointment of General Counsel and Approval
of Employment Agreement
9. Receive and File Treasurer’s Report for Period
Ending October 31, 2023
10. Approve Conflict of Interest and Ethical Conduct
Policy
11. Request Approval of Regional Energy Network
(REN) Application to CPUC
12. Receive Update on Regulatory and Legislative
Affairs
13. Receive Update on 2024 Rate/Power Charge
Indifference Adjustment (PCIA) Projected
Changes
14. Approve CDH VIDAL LLC Power Purchase
Agreement (PPA)
15. (12/13/23 Update – Item 15 deferred to future
meeting)
12 Item 8
Appointment of General Counsel and Approval
of Employment Agreement
Recommendation:
Appoint an In-House General Counsel and approve execution of an Employment Agreement in substantially the form attached hereto or presented at the meeting, with non-substantive revisions approved by the Chair and reviewed and approved as to form by General Counsel.
Presenter:
Joe LaCava, Chair
Public
Comment
for Item 8
14 Item 8
Recommendation:
Appoint an In-House General Counsel and approve
execution of an Employment Agreement in substantially the form attached hereto or presented at the meeting, with
non-substantive revisions approved by the Chair and
reviewed and approved as to form by General Counsel.
15 Item 9
Treasurer’s Report for Period Ending 10/31/23
Recommendation:
Receive and File Treasurer’s Report for Period Ending October 31, 2023.
Presenter:
Eric Washington, Chief Financial Officer
16 Item 1: Treasurer’s Report
17 Item 1: Treasurer’s Report
$31.4M $46.7M $30.0M $47.4M $64.5M $69.7M $89.2M $116.1M $183.7M
$247.8M
$314.7M
$376.7M
$416.4M
$54.4M $73.2M $56.5M $73.9M
$190.8M $196.0M $203.5M
$230.3M
$297.9M
$362.0M
$439.0M
$506.0M $520.7M
$0.0M
$100.0M
$200.0M
$300.0M
$400.0M
$500.0M
$600.0M
9/30/2022
11/30/202212/31/2022
1/31/20232/28/20233/31/20234/30/20235/31/20236/30/20237/31/20238/31/20239/30/2023 10/31/202311/30/2023
Rolling 12-Month Reserves FY 2023-24
Unrestricted Cash Lines of Credit Reserve Goal Total Reserves FY24 RESERVE GOAL: $491.1M
153
Days
Cash on Hand
204
Days
Cash on Hand with
Total Liquidity
18 Item 1: Treasurer’s Report
Weather Comparison Year-over-Year
62 70 70
76.5 68
71 74
78.5 84.5
78.5 66 65.5
62 61.5 63
68.5 65
68 75 76
78.5 72
67.5 63.5
0 10
20 30
40 50
60 70
80 90
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Average Temperature of Daily Highs
2022 2023
National Weather Service - (NOAA Online Weather Data)
($29.0M)
Milder temperatures led
to lower actual load
O F
Mild
Temps
2023 temps trended
lower than 2022
19 Item 1: Treasurer’s Report
$12.63
2023 CPUC Forecast Market Price
Benchmark
$30.30
2023 CPUC Final Market Price
Benchmark
Budget Comparison
YTD FY24 as of
10/31/23 (4 mos) FY24 YTD Budget Budget
Variance ($) Budget (%)
Net Operating Revenues $ 657,179,799 $ 686,198,508 $ (29,018,709) 96% Total Expenses $ 424,234,991 $ 393,440,537 $ 30,794,454 108% Change in Net Position $ 232,944,808 $ 292,757,971 $ (59,813,163) -20% Operating expenses came in 8.0 percentage
points over budget:
• Large energy expense related to Voluntary
Allocation and Market Offer (VAMO)
• Higher-than-expected resource adequacy
and renewable energy costs
20 Item 1: Treasurer’s Report
Year-to-date financial results compared to
projections:
• Net operating revenues were 4% lower
than proforma projections
• Total expenses were 8% over the
proforma projections
• Change in net position was $60.14M
under the projected
YTD FY24 Proforma v. Actual
Proforma Comparison
YTD FY24 as of
10/31/23 (4 mos)
FY24 YTD
ProForma
ProForma
Variance ($)
Proforma
(%)
Net Operating Revenues $ 657,179,799 $ 686,198,508 $ (29,018,709) -4% Total Expenses $ 424,234,991 $ 393,115,212 $ 31,119,779 8% Change in Net Position $ 232,944,808 $ 293,083,296 $ (60,138,488) -21% 21 Results for the period underperformed overall
compared to the adopted budget:
• Net operating revenues 4.0 percentage
points under budget.
• Operating expenses came in 8.0
percentage points over budget
Financial results for the YTD FY24:
• $657.18M in net operating revenues
• $424.23M in total expenses (includes
energy costs of $374.25M or 57% of net
revenues)
• $232.94M change in YTD net position
Item 1: Treasurer’s Report
YTD FY24 Budget v. Actual
Budget Comparison
YTD FY24 as of
10/31/23 (4 mos) FY24 YTD Budget Budget
Variance ($) Budget (%)
Net Operating Revenues $ 657,179,799 $ 686,198,508 $ (29,018,709) 96% Total Expenses $ 424,234,991 $ 393,440,537 $ 30,794,454 108% Change in Net Position $ 232,944,808 $ 292,757,971 $ (59,813,163) -20% $-
$100,000,000
$200,000,000
$300,000,000
$400,000,000
$500,000,000
$600,000,000
$700,000,000
$800,000,000
Net Operating Revenues Total Expenses Change in Net Position YTD FY24 Results v. Budget
YTD FY24 as of 10/31/23 (4 mos) FY24 YTD Budget
22 Cash
85%
Unmet
Reserves
15%
Item 1: Treasurer’s Report
$520M
Total Liquidity
FY 2023-24 YTD
$9M
Outstanding
Debt
FY 2023-24 YTD
$232M
Reserve
Contribution
FY 2023-24 YTD
85%
Percent Reserve
Goal Met
FY 2023-24
CONTRIBUTION RESERVES
GOAL DEBT
Reserve contribution
for the fiscal year
Outstanding loans
FY24 YTD
Total available liquidity
FY24 YTD
$491M 180-DCOH
Reserve Target FY24
$232M Actual
$292M Budget
$202M – Goal
$M $100M $200M $300M
FYTD
FYTD
Reserve Contribution
$M $20M $40M $60M
LOC $9M
$M $200M $400M $600M
$416M
Cash
$104
LOC $520M
Public
Comment
for Item 9
24 Item 9
Treasurer’s Report for Period Ending 10/31/23
Recommendation:
Receive and File Treasurer’s Report for Period Ending October 31, 2023.
25 Item 10
Approve Conflict of Interest and Ethical Conduct
Policy
Recommendation:
Approval of Conflict of Interest and Ethical Conduct
Policy
Presenter:
Jen Lebron, Director of Public Affairs
26 Conflict of Interest and Ethical Conduct Policy
Goals
• Foster good governance, transparency, and fairness
• Emphasize the importance of public trust bestowed
on each individual who represents SDCP
• Provide high-quality services to the community in a
fair an impartial manner
27 Conflict of Interest and Ethical Conduct Policy
Overview
• This policy summarizes a code of ethics and standards that are applicable to all who serve SDCP – the elected officials on the Board of Directors, the residents who are appointed to the CAC, and SDCP employees
• It is largely based on Conflict of Interest policies from other public agencies, notably the City of San Diego
• There are seven sections that lay out the responsibilities of those who serve SDCP customers.
28 1. Responsibilities of Public Service
• All SDCP directors, committee members, and employees are obligated to uphold the Constitution of the United States and the Constitution of the State of California.
• Their conduct, both official and private, must align with the highest standards of integrity, prioritizing the well-being and welfare of the general public
29 2. General Rules Regarding Conflict of Interest
• Directors, committee members, and employees are prohibited from engaging in any business or transaction that may conflict with their official duties or compromise their independence, judgment, or action
• This prohibition aligns with the California Government Code, regulations of the Fair Political Practices Commission, and common law conflicts of interest under California law
30 3. Acceptance of Favors, Gifts, and Gratuities
• The policy establishes the guidelines for accepting gifts, ensuring that such actions do not compromise the impartiality of directors, committee members, and employees
• Notably, gifts received in violation of this policy should be returned or donated to a public charity
• This section provides more specificities regarding the responsibilities of those who serve SDCP beyond what is required by State law
31 4. Collateral or Outside Employment by
Employees
• Employees engaged in outside business activities are required to provide notice and obtain departmental approval to ensure compatibility with SDCP duties
• Employees shall not engage in any collateral employment or business activity which is incompatible or in conflict with the duties, functions, or responsibilities of SDCP, their department, or their employment decision
32 4. Collateral or Outside Employment by
Employees
Activities which may constitute a conflict
• Use of SDCP time, facilities, equipment and supplies, or the use of a badge, uniform, prestige or influence of SDCP or employment for private gain or advantage
• Collateral business activity or employment, which, by its nature, hours or physical demands, would impair the required quality or quantity of the Employee’s work with SDCP
• Activities that would impair the Employee’s independence of judgment or action in the performance of official duties 33 5. Use of SDCP Position or Resources for
Personal or Outside Gain
• Directors, Committee Members, and Employees shall not use, for private gain or advantage, their SDCP time or SDCP’s facilities, equipment or supplies
• Directors, Committee Members, and Employees shall not use or attempt to use their positions to secure unwarranted privileges or exemptions for themselves or others
34 5. Use of SDCP Position or Resources for
Personal or Outside Gain
Directors, Committee Members, and Employees shall not use their position, title or status to influence, or attempt to influence, SDCP’s review or approval of an SDCP contract, grant, or other decision for the Director, Committee Member, or Employee in his or her capacity as a private individual, self-employed consultant or to facilitate work, grant funds, or other benefits for a collateral employer or other financial interest.
35 5. Use of SDCP Position or Resources for
Personal or Outside Gain
In practice
• Directors and Committee Members shall recuse themselves from the discussion or planning for any grant, contract, or decision-making process that relates to their work outside of SDCP
• Directors and Committee Members shall also recuse
themselves from voting on items that pertain to any grant, contract, or decision-making process that relates to their work outside of SDCP
36 6. Use of Confidential Information
Directors, Committee Members, and Employees shall not use confidential information acquired by, or available to, them in the course of their position or employment with SDCP for speculation or personal gain
37 7. Responsibility and Penalties
Directors, Committee Members and Employees found to be in violation of this Policy or who is found guilty or liable by any court of law, enforcement agency, administrative hearing officer, or public agency investigation, of violating California Government Code section 1090, the California Political Reform Act, or the regulations of the Fair Political Practices Commission, in relation to their service to SDCP, may be subject to censure by the Board of Directors, as well as removal from SDCP committees.
38 Summary
The Conflict of Interest and Ethical Conduct Policy is
essential for upholding the values of good governance,
transparency, and fairness within SDCP.
Public
Comment
for Item 10
40 Item 10
Recommendation:
Approve Conflict of Interest and Ethical Conduct
Policy
41 Item 11
Request Approval of Regional Energy Network
(REN) Application to California Public Utilities
Commission (CPUC)
Recommendation:
Request Approval of Regional Energy Network
(REN) Application to CPUC
Presenter:
Colin Santulli, Director of Programs
Sheena Tran, Senior Program Manager
42 SDCP Discussions on REN
May 2022 – Board of Director's (BOD) Meeting
• Receive and file update on customer energy programs, presented options to access CPUC program funding including formation of a REN
June 2022 – Community Advisory Committee (CAC) & BoD Meetings • FY 2022-2023 Programs Budget inclusion of dedicated FTE and consultant for CPUC application development January 2023 – SDCP New Board Member & Alternates Orientation • Staff identified forming a REN as one of the FY 22-23 Programs Department priorities February 2023 – Community Advisory Committee & Board Meeting • Receive and file update on REN progress including the REN value and overview of other REN activity in state April 2023 – 2023 Strategic Planning Session
• Review of annual goals including REN formation and relation to the Community Power Plan September and October 2023 - CAC and BoD Meetings
• Review of SDREN proposed governance structure, draft programs and budget summaries 43 Regional Support
SDREN received support from dozens of businesses, community-based organizations, public agencies, and environmental groups throughout the San Diego region. 44 Next Steps
Public
Comment
for Item 11
46 Item 11
Recommendation:
Request Approval of Regional Energy Network
(REN) Application to CPUC
47 Item 12
Receive Update on Regulatory and Legislative
Affairs
Recommendation:
Receive and File the Update on Regulatory and Legislative Affairs
Presenter:
Laura Fernandez, Director of Regulatory & Legislative Affairs Aisha Cervantes-Cissna, Senior Policy Manager
Stephen Gunther, Senior Regulatory Analyst
48 2023 Legislative Session in Review
SDCP Took Positions on 7 Bills, 3 of Those Were Signed into Law
1. AB 1373 (Signed By Governor)
a) Establishes a central procurement function within Dept. of Water Resources
b) Establishes Capacity Payments for LSEs that fail to meet RA requirements
c) Clarifies IRP jurisdiction
49 2023 Legislative Session in Review
SDCP Took Positions on 7 Bills, 3 of Those Were Signed into Law
2. SB 411 (Signed By Governor): This bill will permit use of alternate teleconferencing provisions similar to the emergency provisions used during the coronavirus state of emergency indefinitely and without regard to a state of emergency. This bill originally would have applied to SDCP, however, it was subsequently amended to be inapplicable to SDCP and would only apply in a narrow set of circumstances.
3. AB 50 (Signed By Governor): Requires timely interconnection of customer load. Requires IOUs that energized less than 35% of customers with completed applications exceeding 12 months in duration by January 31, 2023, to submit a report to the CPUC on or before December 1, 2024, demonstrating that the IOU has energized 80% of customers with applications deemed complete as of January 31, 2023. The bill would also require each IOU to evaluate and update its existing distribution planning processes. To inform the determination of criteria for timely service, the bill would require the CPUC to annually collect certain information from each IOU until new reporting requirements are established. 50 2023 Legislative Session in Review
• SB 619 (Padilla, Vetoed): This bill would give utilities the option to get CEQA reviews for transmission projects from the CEC instead of the CPUC and limit the reviews to 270 days. • SB 233 (Not Active): This bill would have required the CEC to convene a stakeholder workgroup to examine challenges and opportunities associated with using an EV as a mobile battery to power a home or building or provide electricity to the electrical grid, and required the CEC to submit a report to the Governor and Legislature that includes specified information related to the bidirectional capability of EVs and electric vehicle service equipment. This bill would have required that, beginning in model year 2030, all new electric vehicles sold in California be bidirectional capable, including light-duty motor vehicles and school busses, except as exempted by the state board. • SB 547 (Not Active): This bill would have permitted use of alternate teleconferencing provisions similar to the emergency provisions used during the coronavirus state of emergency indefinitely and without regard to a state of emergency.
• AB 643 (Not Active): Would have required the CPUC to submit a report to the Legislature on timelines for the interconnection of customer-sited energy generation and storage resources 51 Federal Activities Update
Response from EPA regarding CCA eligibility for Inflation Reduction Act Funding “[W]e anticipate allowing CCAs to participate in programs as appropriate.” “We concur with the important work that CCAs offer, including fostering partnerships and aggregating local government projects where appropriate.” SDCP Endorsed Federal Legislation, Clean Energy and Transmission Acceleration Act (CETA) Authored by Congressman Levin
“The reforms proposed by CETA will strengthen grid reliability and enable projects that will reduce greenhouse gas emissions from the energy sector. For these reasons, San Diego Community Power (SDCP) thanks Congressman Levin and Congressman Casten for their leadership in addressing the climate crisis and environmental justice. Our national grid must be prepared to accommodate an ever-increasing amount of renewable energy projects and utilize a broad array of technology to maximize existing transmission capacity. CETA is integral to that effort, which SDCP fully endorses.” 52 Energy Resource Recovery Account (ERRA)
• Decision approves SDG&E’s updated 2024 revenue requirement, sales forecast, PCIA rates
• SDCP and CEA argued SDG&E should be directed to adopt a forecasted 2024 RA sales volume equal to average of RA sales recorded in 2023
• Decision agrees with SDCP/CEA and directs SDG&E to revise its 2024 RA sales forecast
• The impact will be a reduction in PCIA portfolio costs of $36.7 million –most of which will go to CCA customers as a benefit • The reduction in costs will be implemented in January 2024 rates
53 Final Decision Granting
Petition for Modification of
Decision (D.)22-05-015 on
Modified Cost Allocation
Mechanism (MCAM)
54 Background on Decision (D.)22-05-015
In 2019, D.19-11-016
ordered LSEs to
procure additional
resource adequacy
(RA) capacity
After 2019, many
customers who the
IOUs procured on
behalf of departed
IOU service to a CCA
D.22-05-015 allowed
a one-time provision
for CCAs to negotiate
purchasing the
portion of D.19-11-
016 capacity based
on their departed load
at that time
SDCP and CEA
had planned
and approved
expansion at
this time
55 Joint CCA Petition for Modification
• D.22-05-015 states that authorization to purchase RA capacity is, “a one-time provision that shall be based on the load of the non-IOU LSE, as mutually agreed between the IOU and the non-IOU LSE, as of the effective date of this decision…”
• Both SDCP and Clean Energy Alliance (CEA) interpreted the order to allow the use of its 2023 Year Ahead revised load forecast.
• For SDCP, this load forecast included National City and the County of San Diego. • It was filed with the CPUC before the Decision and agreed upon with SDG&E. • However, within negotiations SDG&E was unwilling to contract for amounts other than SDCP and CEA’s respective load share at the time of the Decision, despite knowing customers were departing.
Because a resolution could not be reached in bilateral negotiations, on October 28, 2022, SDCP and CEA jointly filed a Petition for Modification (PFM).
Specifically, the requested modification would allow for the use of 2023 Year Ahead load forecasts for D.19-11-016 resource allocations. 56 Proposed Decision Denying the PFM and
Withdrawal
• On August 24, 2023, the CPUC issued
a Proposed Decision denying the Joint
CCA PFM.
• The Joint CCAs filed opening
comments, held an Ex Parte meeting
with Commission staff, and continued to
educate policymakers about the
potential negative impact on ratepayers.
• The CPUC was scheduled to vote on
the Proposed Decision on October 12,
2023, but Withdrew the item from the
agenda on October 9…
49 MW of
replacement RA
capacity through
their CCA
Excess SDG&E
capacity through
the power charge
indifference
adjustment (PCIA)
Costing
ratepayers at
least $100
million over
the next 12+
years
The Joint CCAs demonstrated that without the modification, customers would pay twice for the same capacity:
57 Final Decision Granting the PFM
• On November 9, 2023, the CPUC issued a new Proposed Decision granting the Joint CCA PFM. • Opening comments were filed on November 29, 2023, and the Joint CCAs filed reply comments on December 4, 2023.
During today’s CPUC Business Meeting, the
Commission voted to approve the Proposed
Decision, making it final and granting our petition
to modify!
• The Final Decision allows SDCP to purchase an additional 36 MW of system RA capacity at the Market Price Benchmark beginning for 2025 resource adequacy requirements and continuing throughout the life of the contracts, thus saving ratepayers tens of millions of dollars. 58 Net Billing Tariff Update: Decision
Addressing Remaining Proceeding Issues
• Adopted on November 16, 2023
• Addresses:
• Successor tariff for Virtual Net Energy
Metering (VNEM): Virtual Net Billing Tariff
• Successor tariff for Net Energy Metering
Aggregation (NEMA): Aggregation
subtariff
• Billing improvements
• Consumer protections
• Prevailing wage requirements for
contractors
• Principles for evaluating the Net Billing Tariff
• Proceeding closure
59 Virtual Net Billing Tariff
• Largely utilized by multi-family properties
• Distinct from single family NBT as on-site
generation typically does not flow directly
to any tenant meter but directly back onto
grid
• Ensures tenants receive compensation
for building’s solar production, rather than
all benefits going to the property owner
60 Aggregation Subtariff
• Largely utilized by agricultural and
municipal customers
• Benefits a single customer with
multiple meters on the same property,
adjacent properties, or contiguous
properties
61 Alignment with NBT
• Export compensation based on Avoided Cost Calculator (ACC) rates
• Adopts an adder to ease transition to ACC rates, but SDG&E and non-residential customers are ineligible
• Import rates
• VNBT: any eligible TOU rate (residential customers) and any available rate (non-residential customers)
• NEMA: highly differentiated TOU rate (residential customers) and any available TOU rate (non-residential customers)
62 Storage
• Customers can add storage to their existing
system without altering their tariff status
• Customers can operate their systems, including
storage, to serve onsite load during outages
• Grid charging of onsite batteries is still prohibited, but a process will launch to explore changing this
rule
63 Next Steps
• Sunset date
o 11:59 p.m. on February 13, 2024
• Implementation
o March 31, 2025
o Temporary service on current tariffs between sunset and implementation
• Legacy treatment
o Transition to new tariff will occur when legacy period ends 64 Billing Improvements
• CCAs successfully advocated for a
change in decision language to ensure
CCA customer billing issues are
addressed in upcoming workshops
Public
Comment
for Item 12
66 Item 12
Recommendation:
Receive and File the Update on Regulatory and
Legislative Affairs
67 Item 13
Receive Update on 2024 Rate/Power Charge
Indifference Adjustment (PCIA) Projected
Changes
Recommendation:
Receive and File the Update on 2024 Rate & Power
Charge Indifference Adjustment (PCIA) Projected
Changes Presenter:
Aaron Lu, Senior Rates and Strategy Analyst
Lucas Utouh, Senior Director of Data Analytics and Customer Operations
68 01-23-2023
• Board adopted
rates effective
02-01-2023.
04-01-2023
• SDCP expanded
service to
National City and
Unincorporated
County of San
Diego.
05-15-2023
• SDG&E
submitted its
Application for
Approval of its
2024 Electric
Sales Forecast.
10-13-2023
• SDG&E filed
October Update
to 2024 Electric
Sales Forecast.
12-14-2023
• Staff provided
update to
Committee(s) &
Board on 2024
expectations.
01-01-2024
• SDG&E’s
implementation
of its 2024
generation rates
and the PCIA.
01-18-2024
• SDCP’s Board
adopts 2024
rates, effective
02-01-2024.
2023 and 2024 Rates Timeline
69 Rate Development Policy Objectives:
• Cost Recovery,
• Reserves,
• Rate Competitiveness and Customer Value,
• Rate Stability,
• Equity Among Customers,
• Rate Structure Simplicity and Comparability,
• Transparency,
• Avoidance of Cost Shifting, and
• Cost of Service.
Rate-Setting Process Overview (1)
70 Rate-Setting Process Overview (2)
• Generation costs
• Additional fees
• PCIA, franchise fees, etc.
• SDG&E Delivery
Power Charge Indifference Adjustment (PCIA) and Franchise Fees are factored in our overall rate setting mechanics to ensure competitiveness with SDG&E’s rates.
PCIA is set annually in SDG&E’s Electric Sales Forecast/Energy Resource Recovery Account (ERRA) proceedings. It includes above-market costs related to power supply commitments that the utilities made many years ago.
Franchise Fees is a surcharge applied to electricity transported over SDG&E systems that are constructed in public streets and highways. All customers i.e., bundled and un-bundled, are assessed Franchise Fees.
Competitiveness Factor exists in the value proposition that the Board sets in our rate setting mechanics. In January 2023, the Board approved a 3% discount for our customers.
How are SDCP rates determined?
71 • Equity recognizes that each person has different circumstances and allocates the exact resources and opportunities needed to reach an equal outcome.
• Equality means each individual or group of people is given the same resources or opportunities. • This trifurcation will maintain a fair, equitable, and balanced rate structure that does not create winners and losers across our customers.
2024 Rate Setting Mechanics (1)
SDCP 2020
Vintage Rate
SDCP 2021
Vintage Rate
SDCP 2022
Vintage Rate
PCIA PCIA
Franchise Fee Franchise Fee Franchise Fee
SDG&E Commodity Rate SDCP Trifurcated Rates
SDCP's Value Proposition
SDCP Trifurcation of Rates Illustration.
Equity vs. Equality:
72 • SDCP’s Phase 1 and 2 customers
(vintage 2020), Phase 3 customers
(vintage 2021), and Phase 4
customers (vintage 2022) are all
charged a different PCIA by SDG&E
because they are enrolled in
different “vintage” years.
• Due to the substantial deltas
expected between PCIA vintages
2020, 2021, and 2022, staff will
recommend to the Board trifurcation
of three sets of rates in 2024.
2024 Rate Setting Mechanics (2)
Competitive Factor (Discount) 3% 3% 3%
Rates ($/kWh) Vintage 2020 Vintage 2021 Vintage 2022
SDG&E Commodity Rate 0.1800 0.1800 0.1800
PCIA -0.0051 0.0027 0.0364
Franchise Fees 0.0020 0.0020 0.0020
Resulting Illustrative SDCP Rate 0.1777 0.1700 0.1362
Illustrative Rate Setting Process Based On Trifurcation -0.0500
0.0000
0.0500
0.1000
0.1500
0.2000
SDG&E Commodity Rate PCIA Franchise Fees Resulting Illustrative SDCP Rate
Rates ($/kWh)
Rate Trifurcation By Vintage
Vintage 2020 Vintage 2021 Vintage 2022
73 Illustrative SDG&E commodity rates, effective 01-01-2024 • SDG&E’s commodity rates are projected to decrease as of 01-01-2024, on average by approximately 17%.
• The primary driver for the decrease in commodity rates is that SDG&E’s forecasted costs of purchasing electricity in 2024 are expected to decrease. An adjustment between SDG&E’s balancing accounts is also driving the projected rate decrease. 2024 Commodity Rate Projections
74 • Staff continues to monitor updates from SDG&E & CPUC throughout the remainder of the year and into 2024.
• SDG&E commodity rates and PCIA rates, that will go into effect on 01-01-2024, will not be finalized until the last week of December.
• Staff will recommend to the Board to adopt a rate change, effective as of 02-01-2024, in January.
A few key early considerations are as follows:
• Due to variation in PCIA for vintage years, staff will continue to recommend trifurcated rates. • SDG&E expects costs for purchasing electricity to decrease, as of the time of filing the October ERRA and November Regulatory Account updates.
• Final SDG&E commodity costs and PCIA rates will determine the trajectory of SDCP’s proposed 2024 rates.
Next Steps
Public
Comment
for Item 13
76 Item 13
Recommendation:
Receive and File the Update on 2024 Rate & Power
Charge Indifference Adjustment (PCIA) Projected
Changes
77 Item 14
Approve CDH VIDAL LLC Power Purchase
Agreement (PPA)
Recommendation:
Approve a 20-year Power Purchase Agreement (PPA)
with CDH VIDAL LLC for a 160 MW/160 MWh (4-
hour) battery storage project.
Presenter:
Byron Vosburg, Managing Director Power Services
78 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.
79 Vidal Project Summary
• 160MW PV and 160/640 MWh (4-hour) lithium-ion battery • Location: San Bernardino County
• Interconnection: WAPA (external to CAISO). Seller will deliver energy to CAISO, and SDCP will need to allocate import rights to this project to claim associated resource adequacy attributes.
80 Vidal: Key Terms
• Product: RPS, capacity and ancillary services
• Pricing: Fixed for a 20-year term
• Timeline: Guaranteed Commercial Operation Date is March 1, 2026 • SDCP receives financial compensation for failure to meet certain performance requirements including but not limited to achieving certain development milestones and meeting guaranteed efficiency rates over the delivery term.
81 Vidal: Staff Analysis
• The Vidal project will contribute to SDCP’s 100% renewable by 2035 target, providing over 480,000 MWh of renewable energy per year, in addition to energy management and capacity benefits from battery energy storage.
• With commercial operations commencing in 2026, Vidal would help fulfill SDCP’s Mid-Term Reliability requirements under CPUC D.21-06-025. • Pricing is competitive with comparable product offerings received from SDCP’s recent RFPs. The long-term purchase of energy, RPS attributes, and capacity will provide SDCP with significant value and cost certainty over the term of this PPA.
82 Vidal: Workforce Development and Community Benefits
• The Vidal project will provide 250 construction jobs and 11 permanent jobs. • The Vidal project is committed to using union labor at the project, having a fully executed Project Labor Agreement with the Operating Engineers Local 12, the Southwest Regional Council of Carpenters, the Southern California District Council of Laborers and its affiliated Local Union 783, IBEW Local 477 and the Ironworkers Local 416 and 433.
• The project has committed $500,000 to a community benefit fund to benefit SDCP customers.
Public
Comment
for Item 14
84 Item 14
Recommendation:
Approve a 20-year Power Purchase Agreement (PPA)
with CDH VIDAL LLC for a 160 MW/160 MWh (4-hour)
battery storage project.
Report by
Chief
Executive
Officer
Report by
General
Counsel
Director
Comments
Next Regular
Board of Directors Meeting
January 18, 2024