Board of
Directors
Regular Meeting
January 18, 2024
Welcome
&
Call to
Order
Roll
Call
4 Land
Acknowledgement
Warm Welcome to our New Hires!
Michelle Porras
Sr. Executive Assistant
Elaine Mezta
Key Account Services Manager
Isabela Krall
Contract Management Associate
Proclamation Recognizing and Honoring
Carolyn Scofield
Outgoing Community Advisory Committee Member
Items to
be Added,
Withdrawn
or
Reordered
on the
Agenda
Public
Comment
for Items
NOT
on the
Agenda
10 Consent
Agenda
1. Approval of December 14th, 2023, Meeting Minutes
2. Receive and File Treasurer’s Report for Period Ending 11/30/23
3. Receive and File Update on Programs
4. Receive and File Update on Power Services
5. Receive and File Update on Human Resources
6. Receive and File Update on Customer Operations
7. Receive and File Update on Marketing, Public Relations, and Government Affairs
8. Receive and File Update on Community Advisory Committee
9. Receive and File Update on Regulatory and Legislative Affairs
10. Approve Amendment to BrenTech PSA (4th Amendment) to increase the NTE (Not to Exceed) Value up to $246,720 for FY 2023-2024
11. Approval of the Marketing Community Initiative Partnership Agreement with TEGNA for $174,044 through December 31, 2024
12. Approval of Amendments to the CAC Scope of Work and Policies and Procedures
Public
Comment
for
Consent
Agenda
12 Regular
Meeting
Agenda
13. Election of Officers for SDCP for Calendar Year 2024
14. Approval of SDCP’s 2024 Rates Schedule
15. Approval of Acceptance, Appropriation, and Expenditure of Grant Funds from the California Department of Food and Agriculture (“CDFA”) for the Healthy Refrigeration Grant Program
16. Update on Flex Load Strategy
17. Approve Pelicans Jaw Solar, LLC Power Purchase Agreement (PPA)
18. Approve SE US Development, LLC Resource Adequacy (RA) Agreement
19. Approve Energy Storage Service Agreement (ESSA) for the Chula Vista Energy Center 2 Project
20. Approve Hecate Grid Scafell Storage 1 LLC Resource Adequacy (RA) Agreement
21. Approve Duran Mesa LLC Resource Adequacy (RA) Agreement 13 Item 13
Election of Officers for SDCP for Calendar Year
2024
Recommendation:
Elect a Chair and Vice Chair for Calendar Year
2024.
Presenter:
Joe LaCava, Chair
Public
Comment
for Item 13
15 Item 13
Recommendation:
Elect a Chair and Vice Chair for Calendar Year
2024.
16 Item 14
Approval of SDCP’s 2024 Rates Schedule
Recommendation:
Approve the rates schedule
Presenter:
Lucas Utouh, Senior Director of Data Analytics and Customer Operations Jen Lebron, Director of Public Affairs
17 Rate Development Policy Objectives
Objectives
Priorities
Cost Recovery
Simplicity
Transparency
Avoid Cost- Shifting
Reserves
Competitiveness
Stability
Equity
Cost of Service
18 Proposed Rate Decrease 2023 to 2024
Summer
2023
0.22 $/kWh
Winter
0.17 $/kWh
Summer
2024
$0.19 $/kWh
Winter
$0.13 $/kWh
Tight Market
Conditions
Lead to High
RA Prices
*Illustrative YoY average rate differential across all SDCP rate schedules.
SDCP is proposing
to reduce
generation rates
from 2023 to 2024
across all rate
schedules.
19 Proposed Rate Decrease 2023 to 2024
Summer
2023
0.22 $/kWh
Winter
0.17 $/kWh
Summer
2024
$0.19 $/kWh
Winter
$0.13 $/kWh
SDCP is proposing
to reduce $/kWh
rates on average
by 17.7% from
2023 to 2024
across all rate
schedules.
-
Proposed Winter Rate
23.2%
Decrease
Proposed Summer Rate
-12.3%
Decrease
*Illustrative YoY average rate differential across all SDCP rate schedules. 20 Proposed Power100
Summer
2023
0.22 $/kWh
Winter
0.18 $/kWh
Summer
2024
0.20 $/kWh
Winter
0.14 $/kWh
*Illustrative YoY average rate differential across all SDCP rate schedules. 21 Proposed Power100
Summer
2023
0.22 $/kWh
Winter
0.18 $/kWh
Summer
2024
0.20 $/kWh
Winter
0.14 $/kWh
-
Proposed Power100
21.9%
Average Rate Decrease
-
Proposed Power100
10.3%
Average Rate Decrease
*Illustrative YoY average rate differential across all SDCP rate schedules. 22 Cost of Energy Projection
2023
Energy Futures
Trending Lower
4.1 Market Price Risk
Prices in electricity markets exhibit high volatility, and appropriate forward procurement and hedging
approaches are necessary to manage exposure to
pricing volatility within the CAISO or bilateral energy markets.
“Electric generation rates are
projected to decrease primarily due
to lower costs of purchasing
electricity.
-SDG&E Advice Letter 4344-E
From CPUC’s 2022 California Electric and Gas Utility Costs report published in April 2023 23 Resource Adequacy Price Projection
High RA
Prices
RA Price Increases
Low Supply
RA Supply Declining
Tight
market
conditions
lead to high
RA prices.
24 0
10 20
30 40
50 60
70 2021 2022 2023 2024
CPUC Forecast CPUC Final
CPUC Renewable Portfolio Standards Market
Price Benchmarks
RPS Increase
Renewable prices projected to
continue increasing
Renewable prices
have increased and
are projected to
continue increasing.
To be determined
25 Scenario 1
16.4% decrease year- over-year
(8.4 percent premium to
SDG&Eon Feb. 1) • FY24 (Jan-Jun): +$20.3M
• FY25 : - $0.1M
• Reserves Impact : +$20.2M
Scenario 2
24% decrease year- over-year
• FY24 (Jan-Jun): -$15.9M
• FY25 : -$76.0M
• Reserves Impact: -$91.9M
Staff Recommendation
17.7% decrease
year-over-year (23.3%
decrease, 1.5% value
proposition to SDG&E
on Feb. 1)
• FY24 (Jan-Jun): +$3.2M
• FY25 : +$17.1M
• Reserves Impact: +$20.3M
Scenarios Evaluated: Year-Over-Year Customer
Generation Rate Averages
*Illustrative YoY Generation Rate Averages include PCIA and Franchise Fee. 26 Why Reserves?
Long-Term Financial
Health Power Purchase Agreements
Rate Stability
Debt Issuance
Programs
Leveraging
Funds
27 Reserve Strategic Goals
90-Days Cash
$250.0 million
October 2023
180-Days Cash
$500.0 million
October 2025
Investment Grade
Credit Rating
November 2025
Rate Stabilization
$70.0 million
TBD
Complete
In progress
In progress
In progress
28 Rate Stability Historical Trend
Year Count of SDG&E Generation Rate Changes* Count of SDCP Generation Rate Change
2024 1 Pending Board Review & Approval
2023 1 1
2022 2 1
2021 5 2
2020 3 N/A
2019 4 N/A
*Per effective date changes observed in historical SDG&E’s Schedule Electric Energy Commodity Cost (EECC). 29 v
Staff Recommendation
Staff recommendationfor Board adoption provides the following benefits for SDCP customers and the organization:
• A 17.7% year-over-year average decrease, from 2023 to 2024, in SDCP electricity generation rates across all customer classes • A 23.2% year-over-year average decrease, from 2023 to 2024, in SDCP electricity generation winter rates and a 12.3% year-over-year average decrease in summer rates, across all customer classes • Renewable content (base product at 52% or 55% with zero or low carbon with SDCP vs a base product at 44.8% with SDG&E’s most recent 2022 Power Content Label, published in September 2023) • Allows SDCP to maintain its current reserve levels and work towards a180-day cash on hand reserve target which will provide financial stability and support securing a credit rating • Satisfies credit obligations with lenders and power purchase agreements • Prepares SDCP for market and cost shifts
Staff also recommend adjusting the Power100 premiumupwards from$0.0075/kWh to $0.01/kWh, effective as of July 1, 2024, to better reflect the increase in cost of procuring 100% renewable power.
Public
Comment
for Item 14
31 Item 14
Recommendation:
Approve the rates schedule effective Feb. 1, 2024
32 Item 15
Approval of Acceptance, Appropriation, and Expenditure of Grant Funds from the California Department of Food and
Agriculture (“CDFA”) for the Healthy Refrigeration Grant Program
Updated Recommendation:
Adopt resolution authorizing the Chief Executive Officer to: (1) accept, appropriate, and expend CDFA grant funds for the Healthy Refrigeration Grant Program in an amount not to exceed $710,000; (2) execute a grant agreement with CDFA with respect to such grant funds and to negotiate and execute any amendments, extensions, or renewals of such grant agreement; and (3) take all necessary action to administer, monitor, manage, and ensure compliance with the grant agreement and to negotiate and execute contracts with third parties to implement the grant agreement or use of grant funds.
Presenters:
Colin Santulli, Director of Programs
Alyson Scurlock, Senior Program Associate
33 • At the May 2023 Board meeting, Staff
presented initial pilot program concepts under
exploration, including an ENERGY STAR
Refrigerator/Freezer Upgrade pilot program
for small commercial customers.
• In July 2023, Staff submitted a grant
application to CDFA’s Healthy Refrigeration
Grant Program to request funding to
implement the pilot program.
Background
Short-Term Program Types
(FY 23/24 – FY 24/25)
Customer Energy Awareness and Education
Application Assistance
Disadvantaged Communities Green Tariff and
Community Solar Green Tariff
Pilot Programs
Grant Programs
34 • Purpose: To improve access to healthy foods in underserved communities, while promoting California-grown agriculture.
• Program provides energy-efficient refrigeration/freezer equipment to corner stores and small businesses in low-income or low-food access areas to expand their selection of fresh fruits and vegetables.
Healthy Refrigeration Grant Program
35 • In late December 2023, Staff were notified that SDCP received a $710,000 CDFA grant award.
• Grant funding will be used to provide energy-efficient refrigeration/freezer units and additional technical assistance offerings to corner stores/small businesses throughout SDCP’s service territory.
o Equipment will be used to stock California-grown foods (fresh produce, nuts, dairy, meat, eggs, and minimally
processed and culturally appropriate foods).
• Full details of the pilot program will be determined after SDCP receives the grant agreement and associated scope from CDFA.
Grant Award
36 • Corner stores or small businesses that sell or donate food to low-income or low-food access clientele.
• Low-income areas include census tracts in which the
income of at least 20% of the population is at or below the federal poverty level by family size, or the median family income is at or below 80% of the median family
income of surrounding census tracts.
• Low-food access areas include census tracts in which
there are significant barriers to accessing a
supermarket or large grocery store, which may include,
but are not limited to, a census tract where at least 500 persons or 33% of the population live more than one
mile, for nonrural areas, or more than 10 miles, for rural areas, from a supermarket or large grocery store.
Eligibility Summary*
*Complete eligibility will be released when the program manual is developed (anticipated in Q2/Q3 2024) 37 • Staff expect to negotiate and execute a grant agreement with CDFA in Q1 2024 and to launch the pilot program in Q2/Q3 2024.
• Following execution of the grant agreement, Staff will develop program materials, issue solicitations as necessary to contract subconsultants, and start program outreach.
Next Steps
Public
Comment
for Item 15
39 Item 15
Updated Recommendation:
Adopt resolution authorizing the Chief Executive Officer to: (1) accept, appropriate, and expend CDFA grant funds for the Healthy Refrigeration Grant Program in an amount not to exceed $710,000; (2) execute a grant agreement with CDFA with respect to such grant funds and to negotiate and execute any amendments, extensions, or renewals of such grant agreement; and (3) take all necessary action to administer, monitor, manage, and ensure compliance with the grant agreement and to negotiate and execute contracts with third parties to implement the grant agreement or use of grant funds.
40 Item 16
Update on Flex Load Strategy
Recommendation:
Receive and file the update on the Flex Load Strategy
Presenter:
Tim Treadwell, Senior Program Manager
41 Goals and Objectives
Flexible Load Strategy Goal
To design and deliver a program portfolio that
maximizes the size and value of its flexible
resource base. This will enable customer load
optimization, delivering direct bill savings to
program participants, reducing procurement
risks and costs, and enabling lower rates for
the broader community. Moreover, this
approach will align our efforts with the broader
policy goals of the state.
Short- and Long-Term Objectives
Short term: Document opportunities to
incorporate load flexibility into program design,
including DERMs/Aggregator agreements,
qualified product lists (QPLs), and market
integrations (e.g. CAISO), while minimizing
impacts on participation requirements, costs,
and complexity.
Long term: Design and implement a portfolio
that maximizes the flex load value of program
participants, including procurement and
implementation of required software systems
(i.e., DERMS) and integration with Power
Services.
42 Defining “Flexibility”
Load Flexibility (a.k.a. “Load Management”, “Demand Management”, “Demand Flexibility”) refers to the ability to adjust the power of an energy-consuming or -producing device or system to meet the operational needs of the grid or end-use customers. Load flexible technologies can shed energy usage during peak load periods (commonly referred to as “demand response” or “DR”) or shift energy usage to times when the grid is less congested, prices are lower, or generation is cleaner.
43 System Benefits and Goals
In the recently released Load-Shift Goal Report, the CEC created a load flexibility framework:
Category Impact Examples
Load Modifying (LMDR) Directly impacts load forecast and LSE procurement requirements.
• TOU rates, Real Time Pricing Pilots
• Daily Load Shifting Programs
Resource Planning and
Procurement (SSDR)
Contributes to or reduces RA requirements,
CAISO economic or reliability dispatch
• Proxy Demand Resources
• Reliability Demand Response
Incremental and
Emergency
Respond to or prevent emergency conditions,
do not contribute to RA obligations
• Emergency Load Reduction
Program
• Demand Side Grid Support Program
• Distributed Electricity Backup Assets
44 Flex Load as a CCA Resource
Flexible load programming can increase operational efficiency and lower rates for CCA customers by reducing costs and risk associated with:
• Energy Procurement
o Reduce on-peak usage through targeted energy efficiency and daily load shifting o Increase consumption during low/negative pricing events using chemical/thermal storage
• Resource Adequacy
o Reduce demand and RA obligation through targeted energy efficiency and daily load shifting
45 CCA Flex Load Programs
As of Q3 2023, there are a mix of 40 programs that are either active or under development at CCAs across the state.
0 1
2 3
4 5
6 7
8 9
Programs by CCA
Existing Planned
DLS
34%
DR
34%
Peak
15%
RTP
17%
Programs by Type
Number of Programs (n)
DLS = Daily Load Shifting, DR = Event based Demand
Response, Peak = Peak Reduction/EE, RTP = Real Time Pricing 46 Flexible Load and DERs
Load flexibility is operationalized through distributed energy resources (DERs). CEC defines DERs as:
• “a diverse category of devices and technologies that interface with the electricity system at the distribution level, either directly connected to a distribution utility’s wires or on an end-use customer’s premises. Examples include distributed generation and storage, EVs and charging stations, and grid-interactive buildings, as well as DR, flex loads, and EE strategies.” 47 Residential
• HEMS/Smart panels
• Smart thermostats
• Water heating
• Energy storage
• EV charging
(EVSE/telematics)
• Pool pumps
• Flex enhancing EE
measures
Small/Medium Business
• HVAC and lighting
controls
• Water Heating
• Energy Storage
• Flex enhancing EE
measures
Commercial/Institutional
• BMS
(HVAC/Lighting)
• Energy Storage
(Chemical/Thermal)
• EV charging
(EVSE/Fleet)
• Pool pumps
• Flex enhancing EE
measures
DER Asset Classes by Customer Type
48 Load Flexibility
Program Portfolio
SDREN
• Contractor Training
• Codes & Standards
• Direct Installation of EE
• Marketplace/Incentives
Building Electrification
• Direct Installation of EE
• Electrification
Incentives
Managed Charging
• Control of charge
timing/rate
Residential Storage
• Storage Incentives
• Control of charge/
discharge
49 Integration Strategies
• Devices - restrict options to devices that are grid enabled Qualified Product List • OEMs - prioritize/limit(?) to those with a diversity of DERMS integrations • Upfront - integrate payment into purchase/installation process • Reoccurring - include monthly and/or performance-based payments Incentives Payments • Enrollment - customer acceptance of T&C while onsite Direct Installation • Commissioning - verify device registration within DERMS or OEM Cloud • Dispatch - allow for evolution in operational strategy Terms & Conditions • Design - allow for changes to DERMS architecture • Contractor Training - train on flex load measure installation and commissioning Technical Assistance • Code & Standards - code officials on new flex requirements/options 50 DERMS
A Distributed Energy Resource Management
System (DERMS):
• Is a software platform that enables real-time
operation of grid-connected DERs
• Incorporates data points, such as weather,
wholesale prices, and consumer
behavior/preference to optimize how, when, and
where energy is consumed, produced, or stored
• Enable a range of objectives related to distribution
grid operations, end-customer value, and market
participation.
• Are still an emerging technology so there is
considerable variation in the asset, integrations,
communication protocols, and control capabilities
available across platforms.
CRM Load
Forecast
Weather Markets
DERMS
OEM OEM OEM OEM
Smart Thermostat HPWH Pool Pump Res Battery EV Telematics 51 SDREN/BE/BYOD Residential Battery Managed Charging
DERMS Architecture - Phase I
Mid 2024
DERMS DERMS
Pilot basic operation with
Programs and Power Services
Control batteries as standalone
asset through OEM cloud
Focus on leading OEMs while
integration market develops
52 DERMS Architecture - Phase II
Early 2025
SDREN/BE/BYOD Residential Battery Managed Charging
DERMS DERMS
Consolidate non-vehicle assets into a single platform to enable coordinated dispatch and rate optimization
Incorporate additional OEMs
as available
53 SDREN/BE/BYOD Residential Battery Managed Charging
DERMS Architecture - Phase III
Late 2025-2026
DERMS
54 Flex Load Strategy Tentative Timeline
Gantt chart with PS, LMS, all programs, RA, etc.
2024 2025
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
San Diego REN
Building Electrification
Residential Storage
Bring Your Own Device
Managed Charging
Plan Submission
CPUC Review
Anticipated Approval
Non-C RFPs Commercial RFP Program Launch
Telematics DERMS RFP Program Launch
BYOD DERMS RFP Program Launch
CEC RFP Program Launch
Program Launch
Public
Comment
for Item 16
56 Item 16
Recommendation:
Receive and file the update on the Flex Load Strategy
57 Item 17
Approve Pelicans Jaw Solar, LLC Power
Purchase Agreement (PPA)
Recommendation: Approve a 15-year PPA with
Pelicans Jaw Solar, LLC for a 226 MW solar
photovoltaic electric (PV) generation facility and a 118 MW (4-hour) Battery Energy System Storage (BESS)
facility
Presenter:
Byron Vosburg, Managing Director Power Services
58 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 SDCP’s 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.
• This project came through a competitive solicitation SDCP issued in early 2023. The project was shortlisted by SDCP’s energy contract working group. 59 Pelicans Jaw: Project Summary
• 226MW PV and 118/472 MWh (4-hour) lithium-ion battery • Location: Kern County
60 Pelicans Jaw: Key Terms
• Product: RPS, capacity and ancillary services
• Pricing: Fixed for a 15-year term
• Timeline: Guaranteed Commercial Operation Date is April 1, 2027 • 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. 61 Pelicans Jaw: Staff Analysis
• The Pelicans Jaw project will contribute to SDCP’s 100% renewable by 2035 target, providing over 637,000 MWh of renewable energy per year, in addition to energy management and capacity benefits from battery energy storage. • With commercial operations commencing in 2027, Pelicans Jaw 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. • SBE is a California-based solar and storage developer, owning and operating 1.4 GWac of solar projects in US, including 450 MWac of solar projects operating in California with 3 GWac of solar and 4.5 GWac of storage in its California pipeline, including the Pelicans Jaw project.
62 Pelicans Jaw: Workforce Development and Community Benefits • The project will provide 400 construction jobs and 3 permanent jobs. • The project has a fully executed Project Labor Agreement with:
• Operating Engineers Local 12 – San Diego, CA
• Southwest Regional Council of Carpenters – Los Angeles, CA • Southern California District Council of Laborers and its affiliated Local Union 220 – Bakersfield, CA • IBEW Local 428 – Bakersfield, CA
• IBEW Local Union 47 – Diamond Bar CA
• Ironworkers Locals 416 and 433 – Norwalk, CA & City of Industry, CA • The project has committed $500,000 to a community benefit fund to benefit SDCP customers.
Public
Comment
for Item 17
64 Item 17
Recommendation: Approve a 15-year PPA
with Pelicans Jaw Solar, LLC for a 226 MW
solar photovoltaic electric (PV) generation facility
and a 118 MW (4-hour) Battery Energy System
Storage (BESS) facility
65 Item 18
Approve SE US Development, LLC Resource
Adequacy (RA) Agreement
Recommendation: Approve an FCDS-contingent
5-year RA Agreement with SE US Development,
LLC for up to 402 MW of (4-hour) Battery Energy
System Storage (BESS) capacity
Presenter:
Byron Vosburg, Managing Director Power Services
66 Athos: Project Summary
• Athos Storage is a stand-alone storage project being developed by SB Energy (SBE) at its existing solar site
• 402/1,208 MWh (4-hour) lithium-ion battery
• Location: Riverside
67 Athos: Key Terms
• Product: Resource Adequacy
• Pricing: Fixed for a 5-year term
• Timeline: Guaranteed Commercial Operation Date is June 1, 2026 • Deliverability: Contract is contingent on SBE obtaining delivery for the Athos project via the CAISO Transmission Planning Process in 2024
• SDCP would receive financial compensation in the event of seller’s failure to successfully achieve certain development milestones as well as seller’s failure to meet guaranteed resource adequacy guarantees once the project is operational. • SDCP would receive an option to contract with SBE a full energy service storage agreement for the Athos project for deliveries beginning in 2029 should the project obtain deliverability in the 2024 CAISO Transmission Plan Process 68 Athos: Staff Analysis
• The project would contribute to SDCP’s resource adequacy contracting goals. • Pricing is competitive with comparable product offerings received from SDCP’s recent RFPs. The long-term purchase of resource adequacy will provide SDCP with significant value and cost certainty over the term of this agreement. • SBE is a California-based solar and storage developer, owning and operating 1.4 GWac of solar projects in US, including 450 MWac of solar projects operating in California with 3 GWac of solar and 4.5 GWac of storage in its California pipeline, including the Pelicans Jaw project.
69 Athos: Workforce Development and Community Benefits
• The Athos project will provide 45-50 construction jobs and 1 permanent job. • The project is committed to executing a Project Labor Agreement and will identify the unions involved when the agreement is negotiated.
• The project will be developed at SBE’s operating Athos I & II solar projects, minimizing any impacts on the surrounding communities.
Public
Comment
for Item 18
71 Item 18
Recommendation: Approve an FCDS-contingent
5-year RA Agreement with SE US Development,
LLC for up to 402 MW of (4-hour) Battery Energy
System Storage (BESS) capacity
72 Item 19
Approve Energy Storage Service Agreement
(ESSA) for the Chula Vista Energy Center 2
Project
Recommendation: Approve an FCDS-contingent
15-year ESSA with the Chula Vista Energy Center
2 Project for a 49.7 MW (4 hour) Battery Energy
System Storage (BESS) facility
Presenter:
Byron Vosburg, Managing Director Power Services
73 CVEC2: Project Summary
• Chula Vista Energy Center 2 (CVEC2) is a stand-alone storage project being developed by Wellhead Electric Company, Inc. (Wellhead)
• 49.7/198.8 MWh (4-hour) lithium-ion battery
• Location: San Diego
74 CVEC2: Key Terms
• Product: Full toll and Resource Adequacy benefits
• Pricing: Fixed for a 15-year term
• Timeline: Guaranteed Commercial Operation Date is June 1, 2026 • Deliverability: Contract is contingent on Wellhead obtaining delivery for the CVEC2 project via the CAISO Transmission Planning Process in 2024, 2025, or 2026 • SDCP would receive financial compensation in the event of seller’s failure to successfully achieve certain development milestones as well as seller’s failure to meet guaranteed efficiency rates once the project is operational. 75 CVEC2: Staff Analysis
• The project would contribute to SDCP’s local capacity target. • With commercial operations commencing in 2026, the project 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 RFO for stand alone storage and the long-term purchase of capacity, energy arbitration, and ancillary services will provide SDCP with significant value and cost certainty over the term of this ESSA.
• Wellhead and/or its affiliates currently own and/or operate eleven generating projects totaling over 525 MW.
76 CVEC2: Workforce Development and Community Benefits
• Wellhead is committed to using union labor at the project. • Project development will bring approximately 130 clean-energy jobs throughout construction and will be staffed during operations by Wellhead's 6-person San Diego area O&M staff. • Project is located in a disadvantaged community and will help displace local and regional gas-fired generation in peak hours and fewer renewable curtailments will occur. • Wellhead is providing scholarships to local high schools for students continuing education in the areas of Science, Technology, Engineering and Math.
Public
Comment
for Item 19
78 Item 19
Recommendation: Approve an FCDS-contingent
15-year ESSA with the Chula Vista Energy Center
2 Project for a 49.7 MW (4 hour) Battery Energy
System Storage (BESS) facility
79 Item 20
Approve Hecate Grid Scafell Storage 1 LLC
Resource Adequacy (RA) Agreement
Recommendation: Approve an FCDS-contingent
10-year RA Agreement with Hecate Grid Scafell
Storage 1 LLC for 50 MW of Battery Energy
System Storage (BESS) capacity
Presenter:
Asikeh Kanu, Portfolio Manager
80 SDCP RA Procurement
• Long-term RA agreements provide cost and capacity certainty in SDCP’s portfolio
• CPUC requires significant long-term purchase commitments for resource adequacy from new, incremental generation facilities that will achieve commercial operation during 2023 through 2028.
• Pursuant to D.08-06-031 and D.09-06-028, LSEs (e.g. SDCP) may utilize local resources that are expected to come online in the future to address CPUC local RA obligations.
81 Scafell Project Summary
• 50MW/200MWh (4-hour) lithium-ion battery
• Location: Ramona, CA (San Diego County)
• Interconnection: CAISO (Creelman Substation)
82 Scafell: Key Terms
• Product: SD-IV Local RA
• Pricing: Fixed for a 10-year term
• Timeline: Guaranteed Commercial Operation Date is March 1, 2027 (incentive for June 1, 2026 COD)
• Deliverability: Contract is contingent on Hecate Grid obtaining delivery for the Scafell project via the CAISO Transmission Planning Process in 2024 • 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. 83 Scafell: Staff Analysis
• The Scafell project will contribute to SDCP’s local RA target, providing 50 MW of local capacity yearly through 2035.
• Should commercial operations commence in 2026, Scafell would help fulfill SDCP’s Mid-Term Reliability requirements under CPUC D.21-06- 025.
• Pricing is competitive with comparable RA offers received from SDCP’s recent RFPs.
• Hecate Grid has 135MW/290MWh of BESS projects in operation and construction with 7 GW of BESS projects in development across the country.
84 Scafell: Workforce Development & Community Benefits
• Project development will bring approximately 50 clean-energy jobs throughout construction and will be staffed by one full-time employee during operations.
• Hecate Grid intends to execute a PLA with qualified union labor including trade apprentices to construct this project (in accordance with the Inflation Reduction Act).
• Project will help displace local and regional gas-fired generation in peak hours and contribute to a decrease in renewable curtailments. • The project has committed $25,000 to a community benefit fund to benefit SDCP customers.
Public
Comment
for Item 20
86 Item 20
Recommendation: Approve an FCDS-contingent
10-year RA Agreement with Hecate Grid Scafell
Storage 1 LLC for 50 MW of Battery Energy
System Storage (BESS) capacity
87 Item 21
Approve Duran Mesa LLC Resource
Adequacy (RA) Agreement
Recommendation: Approve an 11 to 13–year RA
Purchase and Supply Agreement with Duran Mesa
LLC for 51 MW of wind capacity
Presenter:
Andrea Torres, Senior Portfolio Manager
88 Duran Mesa/SunZia: Project Summary
• Product: Resource adequacy from 51 MW of
wind capacity, first from the operational Duran
Mesa project (part of the larger Western Spirit
portfolio), then from the developing
approximately 3,000 MW SunZia Wind project
once its operational.
• Location: Torrance, Lincoln and San Miguel
counties, New Mexico
• Source: Bilateral negotiations
SunZia
Duran Mesa
89 Duran Mesa/SunZia: Key Terms
• Product: Resource adequacy benefits
• Pricing: Fixed $/kW-month pricing for a 11 to 13-year term • Timeline: Initial deliveries commence on January 1, 2025. Delivery term tenor ensures 10 years of delivery from the SunZia Wind project to conform to the CPUC’s mid-term reliability requirements for load serving entities. • Performance requirements: SDCP would receive financial compensation in the event of seller’s unexcused failures to deliver resource adequacy benefits 90 Duran Mesa/SunZia: Staff Analysis
• The contract will contribute to SDCP’s mid-term resource adequacy contracting goals starting with the 2025 compliance year.
• Pricing is competitive with comparable product offerings received from SDCP’s recent RFPs. The long-term purchase of resource adequacy will provide SDCP with significant value and cost certainty over the term of this agreement. • Pattern provides $50,000 annually to the Corona Landowners Association which provides scholarships to local students.
• Pattern supports the Region 9 Educational Cooperative through a grant match to support youth vocational education on a mobile wind and solar technical training program.
• SunZia Wind has received letters of support from IBEW International President, Kenneth Cooper and from the New Mexico Building Construction & Trades Council.
Public
Comment
for Item 21
92 Item 21
Recommendation: Approve an 11 to 13–year RA
Purchase and Supply Agreement with Duran Mesa
LLC for 51 MW of wind capacity
Report by
Chief
Executive
Officer
Report by
General
Counsel
Director
Comments
Next Regular
Board of Directors Meeting
February 22, 2024