Agenda packet — San Diego Community Power Board of Directors, February 22, 2024 (part 1 of 2)

55682.00001\42018680.1
AGENDA – BOARD OF DIRECTORS – SAN DIEGO COMMUNITY POWER 1 AGENDA
Regular Meeting of the Board of Directors of
San Diego Community Power (SDCP)
February 22, 2024
5:00 p.m.

City of San Diego Metropolitan Operations Complex (MOC II) Auditorium 9192 Topaz Way, San Diego, CA 92123
The meeting will be held in person at the above date, time and location. Board of Directors Members and members of the public may attend in person. Under certain circumstances, Directors may also attend and participate in the meeting virtually pursuant to the Brown Act (Gov.

Code § 54953). As a convenience to the public, SDCP provides a call-in option and internet-based option for members of the public to virtually observe and provide public comments at its meetings. Additional details on in-person and virtual public participation are below. Please note that, in the event of a technical issue causing a disruption in the call-in option or internet-based option, the meeting will continue unless otherwise required by law, such as when a Board Member is attending the meeting virtually pursuant to certain provisions of the Brown Act.

Note: Any member of the public may provide comments to the Board of Directors on any agenda item. When providing comments to the Board, it is requested that you provide your name and city of residence for the record. Commenters are requested to address their comments to the Board of Directors as a whole through the Chair. Comments may be provided in one of the following manners:

1. Providing Oral Comments During Meeting. Anyone attending in person desiring to address the Board of Directors is asked to fill out a speaker’s slip and present it to the Clerk of the Board or the Secretary. To provide remote comments during the meeting, join the Zoom meeting by computer, mobile phone, or dial-in number. On Zoom video conference by computer or mobile phone, use the “Raise Hand” feature. This will notify the moderator that you wish to speak during a specific item on the agenda or during non-agenda Public Comment. Members of the public will not be shown on video but will be able to speak when called upon. If joining the meeting using the Zoom dial-in number, you can raise your hand by pressing *9. Comments will be limited to three (3) minutes.

2. Written Comments. Written public comments must be submitted prior to the start of the meeting by using this Web Comment Form. Please indicate a specific agenda item when submitting your comment. All written comments received prior to the meeting will be provided to the Board members in writing. In the discretion of the Chair, the first ten (10) submitted comments shall be stated into the record of the meeting. Comments read at the meeting will be limited to the first 400 words. Comments received after the start of the meeting will be 55682.00001\42018680.1
AGENDA – BOARD OF DIRECTORS – SAN DIEGO COMMUNITY POWER 2 collected, sent to the Board members in writing, and be part of the public record. If you have anything that you wish to be distributed to the Board, please provide it via [email protected] and it will be distributed to the Members.

The public may participate using the following remote options:

Teleconference Meeting Webinar https://zoom.us/j/94794075133 Telephone (Audio Only) (669) 900-6833 or (346) 248-7799 | Webinar ID: 947 9407 5133

WELCOME

CALL TO ORDER

ROLL CALL

PLEDGE OF ALLEGIANCE

SPECIAL PRESENTATIONS AND INTRODUCTIONS

ITEMS TO BE ADDED, WITHDRAWN, OR REORDERED ON THE AGENDA

PUBLIC COMMENTS
Opportunity for members of the public to address the Board on any items not on the agenda but within the jurisdiction of the Board. Members of the public may provide a comment in either manner described above.

CONSENT CALENDAR
All matters are approved by one motion without discussion unless a member of the Board of Directors requests a specific item to be removed from the Consent Calendar for discussion. A member of the public may comment on any item on the Consent Calendar in either manner described above.

1. Approve January 18, 2024 Meeting Minutes

2. Receive and File Treasurer’s Report for Period Ending December 31, 2023

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 Professional Services Agreement with Chandler Asset Management, Inc. for up to $250,000 for Financial and Investment Portfolio Management Services through February 2025

11. Approve 2024 Community Advisory Committee Work Plan 55682.00001\42018680.1
AGENDA – BOARD OF DIRECTORS – SAN DIEGO COMMUNITY POWER 3 12. Approve Community Clean Energy Grant Program Policy

13. Approve Ascend Analytics Pilot Extension Agreement for PowerSIMM Pilot Support Services through July 31, 2024

REGULAR AGENDA
The following items call for discussion or action by the Board of Directors. The Board may discuss and/or take action on any item listed below if the Board is so inclined.

14. Appoint Members to the Finance and Risk Management Committee Recommendation: Appoint Members to the Finance and Risk Management Committee.

15. Approve Fiscal Year 2023-24 Operating Budget Amendment Recommendation: Approve Fiscal Year 2023-24 Operating Budget Amendment.

16. Presentation on Clean Energy Prepayment Financing
Recommendation: Receive and file Presentation on Clean Energy Prepayment Financing.

17. Quarterly Report on Community Advisory Committee
Recommendation: Receive and file Quarterly Report on Community Advisory Committee.

18. Approve Load Management Standards Compliance Plan
Recommendation: Approve Load Management Standards Compliance Plan.

19. Update on Regional Grid Developments
Recommendation: Receive and file Presentation on Regional Grid Developments.

20. Approve Pilot Project Agreement with GRID Alternatives Recommendation: Approve Pilot Project Agreement with GRID Alternatives in an amount up to $550,000 for Roof Replacements/Repairs in Connection with the Disadvantaged Communities – Single-Family Solar Homes Program.

21. Approve Nobel Solar, LLC Power Purchase Agreement
Recommendation: Approve 20-year Power Purchase Agreement with Nobel Solar, LLC for a 400 MW Solar Photovoltaic electric generation facility and a 400 MW (4-hour) Battery Energy Storage System Facility.

REPORTS BY CHIEF EXECUTIVE OFFICER AND GENERAL COUNSEL
SDCP Management and General Counsel may briefly provide information to the Board and the public.

The Board may engage in discussion if the specific subject matter of the report is identified below, but the Board may not take any action other than to place the matter on a future agenda. Otherwise, there is to be no discussion or action taken unless authorized by law. 55682.00001\42018680.1
AGENDA – BOARD OF DIRECTORS – SAN DIEGO COMMUNITY POWER 4 DIRECTOR COMMENTS
Board Members may briefly provide information to other members of the Board and the public, ask questions of staff, request an item to be placed on a future agenda, or report on conferences, events, or activities related to SDCP business. There is to be no discussion or action taken on comments made by Directors unless authorized by law.

ADJOURNMENT
Compliance with the Americans with Disabilities Act
SDCP Board of Directors meetings comply with the protections and prohibitions of the Americans with Disabilities Act. Individuals with a disability who require a modification or accommodation, including auxiliary aids or services, in order to participate in the public meeting may contact (888) 382-0169 or [email protected]. Requests for disability-related modifications or accommodations require different lead times and should be provided at least 72-hours in advance of the public meeting.

Availability of Board Documents
Copies of the agenda and agenda packet are available at https://sdcommunitypower.org/resources/meeting-notes/. Late-arriving documents related to a Board meeting item which are distributed to a majority of the Members prior to or during the Board meeting are available for public review as required by law. Public records, including agenda-related documents, can be requested electronically at [email protected] or by mail to SDCP, PO BOX 12716, San Diego, CA 92112. The documents may also be posted at the above website. Such public records are also available for inspection, by appointment, at San Diego Community Power, 2305 Historic Decatur Road, Suite 200, San Diego, CA 92106. Please contact [email protected] to arrange an appointment.

MINUTES – BOARD OF DIRECTORS – SAN DIEGO COMMUNITY POWER 1 SAN DIEGO COMMUNITY POWER (SDCP)

BOARD OF DIRECTORS
City of San Diego Metropolitan Operations Complex (MOC II) Auditorium 9192 Topaz Way
San Diego, CA 92123

MINUTES
January 18, 2024
The Board minutes are prepared and ordered to correspond to the Board Agenda. Agenda Items can be taken out of order during the meeting.

The Agenda Items were considered in the order presented.

WELCOME

CALL TO ORDER
Chair LaCava (City of San Diego) called the SDCP Board of Directors meeting to order at 5:02 p.m.

ROLL CALL
PRESENT: Chair LaCava (City of San Diego), Vice Chair Lawson-Remer (County of San Diego) (arrived at 5:12 p.m.), Director McCann (Chula Vista), Director Hinze (Encinitas), Director Aguirre (Imperial Beach), Director Parent (La Mesa), and Director Yamane (National City)
ABSENT: None
Also Present: Chief Executive Officer (CEO) Burns, Chief Operating Officer (COO) Clark, Chief Financial Officer (CFO)/Treasurer Washington, General Counsel Baron, Interim Board Clerk Wiegelman

PLEDGE OF ALLEGIANCE
Chair LaCava (City of San Diego) led the Pledge of Allegiance.

MINUTES – BOARD OF DIRECTORS – SAN DIEGO COMMUNITY POWER 2 SPECIAL PRESENTATIONS AND INTRODUCTIONS
Chair LaCava (City of San Diego) acknowledged the Kumeyaay Nation and all the original stewards of the land.

Chair LaCava (City of San Diego) introduced the following new SDCP staff members:

Isabela Krall, Contracts Management Associate
Patrick Welch, Senior Legislative Manager
Chair LaCava (City of San Diego) presented a proclamation recognizing and thanking former Community Advisory Committee Member Carolyn Scofield (Chula Vista). Carolyn Scofield’s husband, Jim Scofield, accepted the proclamation on her behalf.

ITEMS TO BE ADDED, WITHDRAWN, OR REORDERED ON THE AGENDA There were no items added, withdrawn, or reordered on the agenda.

PUBLIC COMMENTS
There were no public comments.

CONSENT CALENDAR
(Items 1 through 12)
Vice Chair Lawson-Remer (County of San Diego) joined the meeting at 5:12 p.m.

Vice Chair Lawson-Remer (County of San Diego) announced she was attending virtually under the just cause provision of AB 2449 and there were no individuals over the age of 18 present in the room with her.

ACTION: Motioned by Director McCann (Chula Vista) and seconded by Director Yamane (National City) to approve Consent Calendar Items 1 through 12. The motion carried by the following vote:

Vote: 7-0
Yes: Chair LaCava (City of San Diego), Vice Chair Lawson-Remer (County of San Diego), Director McCann (Chula Vista), Director Hinze (Encinitas), Director Aguirre (Imperial Beach), Director Parent (La Mesa), and Director Yamane (National City) No: None
Abstained: None

Absent: None

1. Approval of December 14th, 2023, Meeting Minutes
MINUTES – BOARD OF DIRECTORS – SAN DIEGO COMMUNITY POWER 3 Approve.

2. Receive and File Treasurer’s Report for Period Ending 11/30/23 Receive and file.

3. Receive and File Update on Programs
Receive and file.

4. Receive and File Update on Power Services
Receive and file.

5. Receive and File Update on Human Resources
Receive and file.

6. Receive and File Update on Customer Operations
Receive and file.

7. Receive and File Update on Marketing, Public Relations, and Government Affairs Receive and file.

8. Receive and File Update on Community Advisory Committee Receive and file.

9. Receive and File Update on Regulatory and Legislative Affairs Receive and file.

10. Approve Amendment to BrenTech PSA (4th Amendment) to increase the NTE (Not to Exceed) Value up to $246,720 for FY 2023-2024
Approve.

11. Approval of the Marketing Community Initiative Partnership Agreement with TEGNA for $174,044 through December 31, 2024
Approve.

12. Approval of Amendments to the CAC Scope of Work and Policies and Procedures Approve.

MINUTES – BOARD OF DIRECTORS – SAN DIEGO COMMUNITY POWER 4 REGULAR AGENDA

13. Election of Officers for SDCP for Calendar Year 2024 Chair LaCava (City of San Diego) explained the nomination process for Chair and Vice Chair.

ACTION: Motioned by Director McCann (Chula Vista) and seconded by Director Yamane (National City) to appoint Director LaCava (City of San Diego) as Chair for Calendar Year 2024.

The motion carried by the following vote:

Absent: None
ACTION: Motioned by Director Aguirre (Imperial Beach) and seconded by Director Hinze (Encinitas) to appoint Director Lawson-Remer (County of San Diego) as Vice Chair for Calendar Year 2024. The motion carried by the following vote:

Absent: None

14. Approval of SDCP’s 2024 Rates Schedule
CEO Burns, Data Analytics and Account Services Director Utouh, and Director of Public Affairs Lebron provided an overview of the proposed 2024 rates, highlighting the rate development policy objectives, proposed decreases from the 2023 rates, projected cost of energy, the projected resource adequacy (RA) price, California Public Utilities Commission (CPUC) Renewable Portfolio Standard (RPS) Market Price Benchmarks, RPS requirements, scenarios evaluated by staff, the purpose for reserves, reserve strategic goals, and SDCP’s historical trend of rate stability.

Board questions and comments ensued.

ACTION: Motioned by Director McCann (Chula Vista) and seconded by Director Hinze (Encinitas) to approve the 2024 Rates Schedule effective February 1, 2024 and an adjustment to the Power100 premium from $0.0075/kWh to $0.01/kWh effective July 1, 2024. The motion carried by the following vote:

MINUTES – BOARD OF DIRECTORS – SAN DIEGO COMMUNITY POWER 5 Vote: 7-0
Yes: Chair LaCava (City of San Diego), Vice Chair Lawson-Remer (County of San Diego), Director McCann (Chula Vista), Director Hinze (Encinitas), Director Aguirre (Imperial Beach), Director Parent (La Mesa), and Director Yamane (National City) No: None
Abstained: None

Absent: None

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
Director of Programs Santulli stated the staff recommendation had been updated to, “adopt Resolution No. 2024-01 authorizing the CEO 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 grant agreement or use of grant funds.”
Director of Programs Santulli and Senior Program Manager Scurlock provided a PowerPoint presentation on the Healthy Refrigeration Grant Program, highlighting the purpose of the grant program, the grant award amount, how the grant funds would be used, program eligibility, and next steps.

Board questions and comments ensued.

ACTION: Motioned by Director Aguirre (Imperial Beach) and seconded by Director Yamane (National City) to adopt Resolution No. 2024-01 authorizing the CEO 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 grant agreement or use of grant funds. The motion carried by the following vote:

Absent: None
MINUTES – BOARD OF DIRECTORS – SAN DIEGO COMMUNITY POWER 6 16. Update on Flex Load Strategy
Senior Program Manager Treadwell provided a PowerPoint presentation on the Flex Load Strategy, highlighting the goals and objectives, load flexibility, system benefits and goals, flex load as a Community Choice Aggregation (CCA) resource, CCA flex load programs, flexible load and Distributed Energy Resources (DERs), DER asset classes by customer type, program portfolio, integration strategies, Distributed Energy Resource Management System (DERMS), DERMS Architecture - Phase I, II, and III, and the Flex Load Strategy tentative timeline.

Following Board questions and comments, no action was taken.

17. Approve Pelicans Jaw Solar, LLC Power Purchase Agreement (PPA) Power Services Managing Director Vosburg provided a PowerPoint presentation on the Pelicans Jaw Solar, LLC PPA, highlighting SDCP’s long-term procurement, the project type, staff’s analysis of the project, and the project’s location, product, pricing timeline, deliverability, workforce development, and community benefits.

Board questions and comments ensued.

ACTION: Motioned by Director McCann (Chula Vista) and seconded by Director Hinze (Encinitas) to 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.

The motion carried by the following vote:

Absent: None

18. Approve SE US Development, LLC Resource Adequacy (RA) Agreement Power Services Managing Director Vosburg provided a PowerPoint presentation on the SE US Development, LLC RA Agreement, highlighting the project type, staff’s analysis of the project, and the project’s location, product, pricing timeline, deliverability, workforce development, and community benefits.

Board questions and comments ensued.

ACTION: Motioned by Director McCann (Chula Vista) and seconded by Director Yamane (National City) to approve an FCDS-contingent 5-year RA Agreement with SE US Development, LLC for up to 402 MW of (4-hour) BESS capacity. The motion carried by the following vote:

MINUTES – BOARD OF DIRECTORS – SAN DIEGO COMMUNITY POWER 7 Vote: 7-0
Yes: Chair LaCava (City of San Diego), Vice Chair Lawson-Remer (County of San Diego), Director McCann (Chula Vista), Director Hinze (Encinitas), Director Aguirre (Imperial Beach), Director Parent (La Mesa), and Director Yamane (National City) No: None
Abstained: None

Absent: None

19. Approve Energy Storage Service Agreement (ESSA) for the Chula Vista Energy Center 2 Project
Power Services Managing Director Vosburg provided a PowerPoint presentation on the ESSA for the Chula Vista Energy Center 2 Project, highlighting the project type, staff’s analysis of the project, and the project’s location, product, pricing timeline, deliverability, workforce development, and community benefits.

Board questions and comments ensued.

ACTION: Motioned by Director McCann (Chula Vista) and seconded by Director Aguirre (Imperial Beach) to approve an FCDS-contingent 15-year ESSA with the Chula Vista Energy Center 2 Project for a 49.7 MW (4 hour) BESS facility. The motion carried by the following vote:

Absent: None

20. Approve Hecate Grid Scafell Storage 1 LLC Resource Adequacy (RA) Agreement Vice Chair Lawson-Remer (County of San Diego) left the meeting at 6:17 p.m.

Power Services Portfolio Manager Kanu provided a PowerPoint presentation on the Hecate Grid Scafell Storage 1 LLC RA Agreement, highlighting SDCP’s RA procurement, the project type, staff’s analysis of the project, and the project location, product, pricing timeline, and deliverability.

Board questions and comments ensued.

ACTION: Motioned by Director McCann (Chula Vista) and seconded by Director Yamane (National City) to approve an FCDS-contingent 10-year RA Agreement with Hecate Grid Scafell Storage 1 LLC for 50 MW of BESS capacity. The motion carried by the following vote:

MINUTES – BOARD OF DIRECTORS – SAN DIEGO COMMUNITY POWER 8 Vote: 6-0
Yes: Chair LaCava (City of San Diego), Director McCann (Chula Vista), Director Hinze (Encinitas), Director Aguirre (Imperial Beach), Director Parent (La Mesa), and Director Yamane (National City)
No: None
Abstained: None

Absent: Vice Chair Lawson-Remer (County of San Diego)

21. Approve Duran Mesa LLC Resource Adequacy (RA) Agreement Power Services Senior Portfolio Manager Torres provided a PowerPoint presentation on the Duran Mesa LLC RA Agreement, highlighting the project type, staff’s analysis of the project, and the project location, product, pricing timeline, and deliverability.

Board questions and comments ensued.

ACTION: Motioned by Director McCann (Chula Vista) and seconded by Director Parent (La Mesa) to approve an 11 to 13 – year RA Purchase and Supply Agreement with Duran Mesa LLC for 51 MW of wind capacity. The motion carried by the following vote:

Vote: 6-0
Yes: Chair LaCava (City of San Diego), Director McCann (Chula Vista), Director Hinze (Encinitas), Director Aguirre (Imperial Beach), Director Parent (La Mesa), and Director Yamane (National City)
No: None
Abstained: None

Absent: Vice Chair Lawson-Remer (County of San Diego)

REPORTS BY CHIEF EXECUTIVE OFFICER AND GENERAL COUNSEL
CEO Burns reported on SDCP’s ongoing efforts and recent activities and events.

CEO Burns and Chair LaCava (City of San Diego) thanked General Counsel Baron and Assistant General Counsel Norvell for their support and partnership as SDCP’s legal counsel for the past few years.

General Counsel Baron expressed his gratification for his time serving as general counsel of SDCP.

DIRECTOR COMMENTS
There were no Director comments.

MINUTES – BOARD OF DIRECTORS – SAN DIEGO COMMUNITY POWER 9 ADJOURNMENT
Chair LaCava (City of San Diego) adjourned the meeting at 6:33 p.m.

Megan Wiegelman
Interim Board Clerk

SAN DIEGO COMMUNITY POWER
Staff Report – Item 2
-------------------------------------------------------------------------------------------------------------------- To: San Diego Community Power Board of Directors
From: Eric W. Washington, Chief Financial Officer
Via: Karin Burns, Chief Executive Officer
Subject: Review of Treasurer’s Report for Period Ending 12/31/23 Date: February 22, 2024
--------------------------------------------------------------------------------------------------------------------

RECOMMENDATION
Receive and File Treasurer’s Report for Period Ending 12/31/23.

BACKGROUND
San Diego Community Power (SDCP) maintains its accounting records on a full accrual basis in accordance with Generally Accepted Accounting Principles (GAAP) as applicable to governmental enterprise funds.

SDCP has prepared its year-to-date financial statements for the period ended December 31, 2023, along with budgetary comparisons.

SDCP additionally reports monthly metrics during its Board meetings as part of its Update on Back-Office Operations. As part of the Treasurer’s Report, certain key metrics related to risk are to be presented during the Finance and Risk Management Committee (FRMC) meetings.

ANALYSIS AND DISCUSSION
Actual financial results for the period ended 12/31/23: $806.22 million in net operating revenues were reported compared to $852.77 million budgeted for the period. $598.16 million in total expenses were reported (including $583.38 million in energy costs) compared to $546.50 million budgeted for the period (including $518.88 million budgeted for energy costs). After expenses, SDCP’s change in net position of $208.07 million was reported for Fiscal Year-To-Date 2023-24. The following is a summary of the actual results compared to the Fiscal Year 2023-24 Budget.

Table 1: Budget Comparison Versus Actual Results
• Net operating revenues finished $46.54 million (or 5.0 percentage points) under the budget primarily due to lower-than-expected customer load correlated with cooler weather.
• Operating expenses finished $51.65 million (or 9.0 percentage points) over the budget primarily due to higher-than-expected energy costs related to resource adequacy and renewable energy.

Year-to-date results compared to the projections came in lower than expected and track very closely to the budget results for the period. SDCP’s change in net position was 32% under the projection primarily due to actual net revenue and actual energy costs being higher than projected.

The following is a summary to actual results compared to the fiscal year-to-date proforma.

Table 2: Proforma Comparison Versus Actual Results
Budget Comparison
YTD FY24 as of
12/31/23 (6 mos) FY24 YTD Budget Budget Variance
($) Budget (%)
Net Operating Revenues $ 806,222,352 $ 852,765,001 $ (46,542,649) 95% Total Expenses $ 598,156,221 $ 546,502,842 $ 51,653,379 109% Change in Net Position $ 208,066,131 $ 306,262,159 $ (98,196,028) -32% Proforma Comparison
YTD FY24 as of
12/31/23 (6 mos)
FY24 YTD
ProForma
ProForma
Variance ($) Proforma (%)
Net Operating Revenues $ 806,222,352 $ 852,765,001 $ (46,542,649) -5% Total Expenses $ 598,156,221 $ 545,892,659 $ 52,263,562 10% Change in Net Position $ 208,066,131 $ 306,872,342 $ (98,806,211) -32% Figure 1: Proforma versus Actual Results
For the period ending 12/31/23, SDCP contributed $208,066,131 to its reserves but expected to contribute $306,262,159 per the FY 2023-24 adopted budget. Total SDCP reserves at the end of the period were $391,804,293 and total available liquidity (including lines of credit) was $541,804,293. SDCP has a total FY 2023-24 year-end reserve target of $491,079,452, which is equivalent to 180-days of total operating expenses as set in SDCP’s Reserve Policy and Strategic Goals.

Figure 2: Participation Rates
Phase 4 mass enrollment process in National City and Unincorporated County of San Diego for Non-Net Energy Metering (NEM) customers is officially completed as of May 2023. The participation rate for this new phase is fluid and will change as we continue with our enrollment of Net Energy Metering (NEM) customers from April 2023 through March 2024. In the interim, we are reporting on the opt outs and eligible accounts associated with the phase based on those accounts that we have noticed for enrollment on a rolling basis as of the reporting month.

Staff are also presenting State of SDCP Arrearages related to financial risk for FRMC consideration and for regular review. Additional metrics can be added by request. The below arrearage data includes SDCP’s Receivables aged 120+ Days as of 2/01/2024.

Figure 3: State of SDCP Arrearages
Figure 4: State of SDCP Arrearages Residential vs Commercial

COMMITTEE REVIEW
The report was reviewed by the Finance and Risk Management Committee (FRMC) on February 15, 2024.

FISCAL IMPACT
N/A

ATTACHMENTS
Attachment A: 2023 Year-to-Date Period Ended 12/31/23 Financial Statements 1 ACCOUNTANTS’ COMPILATION REPORT
Management
San Diego Community Power
Management is responsible for the accompanying financial statements of San Diego Community Power (a California Joint Powers Authority) which comprise the statement of net position as of December 31, 2023, and the related statement of revenues, expenses, and changes in net position, and the statement of cash flows for the period then ended in accordance with accounting principles generally accepted in the United States of America. We have performed a compilation engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. We did not audit or review the accompanying statements nor were we required to perform any procedures to verify the accuracy or completeness of the information provided by management. Accordingly, we do not express an opinion, conclusion, nor provide any assurance on these financial statements.

Management has elected to omit substantially all of the note disclosures required by accounting principles generally accepted in the United States of America in these interim financial statements. San Diego Community Power’s annual audited financial statements include the note disclosures omitted from these interim statements. If the omitted disclosures were included in these financial statements, they might influence the user’s conclusions about the Authority’s financial position, results of operations, and cash flows. Accordingly, these financial statements are not designed for those who are not informed about such matters.

We are not independent with respect to the Authority because we performed certain accounting services that impaired our independence.

Maher Accountancy
San Rafael, CA
February 1, 2024
1101 Fifth Avenue, Suite 200 San Rafael, CA 94901 415 459 1249 mahercpa.com Current assets
Cash and cash equivalents - unrestricted 349,769,489 $
Cash and cash equivalents - restricted 500,000
Accounts receivable, net of allowance 105,054,350
Accrued revenue 52,103,418
Prepaid expenses 1,950,887
Other receivables 634,740
Deposits 3,393,534
Total current assets 513,406,418
Noncurrent assets
Cash and cash equivalents - restricted 1,647,000
Lease asset, net of amortization 1,560,699
Capital assets, net of depreciation 141,434
Total noncurrent assets 3,349,133
Total assets 516,755,551
Current liabilities
Accrued cost of electricity 108,578,229
Accounts payable 1,520,359
Other accrued liabilities 5,363,414
State surcharges payable 585,271
Deposits - energy suppliers 4,155,000
Interest and finance costs payable 275,852
Lease liability 750,995
Total current liabilities 121,229,120
Noncurrent liabilities
Supplier security deposits 624,000
Lease liability 863,667
Total noncurrent liabilities 1,487,667
Total liabilities 122,716,787
Net investment in capital assets 87,471
Restricted for collateral 2,147,000
Unrestricted 391,804,293
Total net position 394,038,764 $

NET POSITION

SAN DIEGO COMMUNITY POWER

STATEMENT OF NET POSITION
As of December 31, 2023
ASSETS

LIABILITIES
See accountants' compilation report. 2

OPERATING REVENUES
Electricity sales, net 805,591,352 $
Grant revenue 631,000
Total operating revenues 806,222,352

OPERATING EXPENSES
Cost of electricity 583,382,510
Contract services 9,551,908
Staff compensation 5,053,535
Other operating expenses 1,816,978
Depreciation and amortization 284,278
Total operating expenses 600,089,209
Operating income 206,133,143

NON-OPERATING REVENUES (EXPENSES)
Interest income 2,993,013
Interest and financing expense (1,099,723)
Nonoperating revenues (expenses), net 1,893,290
CHANGE IN NET POSITION 208,026,433
Net position at beginning of year 186,012,331
Net position at end of year $ 394,038,764

SAN DIEGO COMMUNITY POWER

STATEMENT OF REVENUES, EXPENSES

AND CHANGES IN NET POSITION
Six Months Ended December 31, 2023
See accountants' compilation report. 3

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 838,982,426 $
Receipts of supplier security deposits 30,572,233
Receipts from wholesale sales 10,008,941
Other operating receipts 631,000
Payments to suppliers for electricity (543,807,401)
Payments for goods and services (8,659,648)
Payments of staff compensation and benefits (4,848,024) Payments for deposits and collateral (2,774,693)
Payments of state surcharges (1,157,645)
Net cash provided by operating activities 318,947,189

CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES
Principal payments - bank note (35,730,000)
Interest and related expense payments (1,352,079)
Net cash provided (used) by non-capital
financing activities (37,082,079)

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Payments of lease liability (250,774)
Payments to acquire capital assets (71,550)
Net cash (used) by capital and related financing activities (322,324)

CASH FLOWS FROM INVESTING ACTIVITIES
Interest income received 2,542,823
Net change in cash and cash equivalents 284,085,609
Cash and cash equivalents at beginning of year 67,830,880 Cash and cash equivalents at end of year 351,916,489 $
Reconciliation to the Statement of Net Position
Cash and cash equivalents (unrestricted) 349,769,489 $
Restricted cash - current 500,000
Restricted cash - noncurrent 1,647,000
Cash and cash equivalents 351,916,489 $

SAN DIEGO COMMUNITY POWER

STATEMENT OF CASH FLOWS
Six Months Ended December 31, 2023
See accountants' compilation report. 4
Operating income 206,133,143 $
Adjustments to reconcile operating income to net
cash provided by operating activities
Depreciation and amortization expense 284,278
(Increase) decrease in:

Accounts receivable, net 5,459,381
Accrued revenue 26,689,366
Prepaid expenses 28,576,611
Other receivables 49,165
Deposits 14,262,816
Increase (decrease) in:

Accrued cost of electricity 31,232,886
Accounts payable 1,081,093
Other accrued liabilities 1,568,767
State surcharges payable 84,682
Supplier security deposits 3,525,000
Net cash provided by operating activities 318,947,189 $

SAN DIEGO COMMUNITY POWER
STATEMENT OF CASH FLOWS (continued)
Six Months Ended December 31, 2023

RECONCILIATION OF OPERATING INCOME TO NET

CASH PROVIDED BY OPERATING ACTIVITIES
See accountants' compilation report. 5
1 ACCOUNTANTS’ COMPILATION REPORT
Board of Directors
San Diego Community Power
Management is responsible for the accompanying special purpose operating fund budgetary comparison schedule of San Diego Community Power (SDCP), a California Joint Powers Authority, for the period ended December 31, 2023, and for determining that the budgetary basis of accounting is an acceptable financial reporting framework. We have performed a compilation engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. We did not audit or review the accompanying statement nor were we required to perform any procedures to verify the accuracy or completeness of the information provided by management. Accordingly, we do not express an opinion, a conclusion, nor provide any assurance on this special purpose budgetary comparison statement.

The special purpose statement is prepared in accordance with the budgetary basis of accounting, which is a basis of accounting other than accounting principles generally accepted in the United States of America. This report is intended for the information of the Board of Directors of SDCP.

Management has elected to omit substantially all of the note disclosures required by accounting principles generally accepted in the United States of America in these interim financial statements.

SDCP’s annual audited financial statements will include the note disclosures omitted from these interim statements. If the omitted disclosures were included in these financial statements, they might influence the user’s conclusions about the Authority’s financial position, results of operations, and cash flows.

Accordingly, these financial statements are not designed for those who are not informed about such matters.

We are not independent with respect to SDCP because we performed certain accounting services that impaired our independence.

Maher Accountancy
San Rafael, CA
February 1, 2024
1101 Fifth Avenue, Suite 200 San Rafael, CA 94901 415 459 1249 mahercpa.com 2023/24 YTD
Budget
2023/24 YTD
Actual
2023/24 YTD
Budget
Variance
(Under) Over
2023/24
YTD
Actual/
Budget %
2023/24 Annual
Budget
2023/24 Budget
Remaining
REVENUES AND OTHER SOURCES Gross Ratepayer Revenues 888,296,876 839,157,658 $ (49,139,218) 94% 1,346,325,552 $ 507,167,894 $ Less: Uncollectible Customer Accounts (35,531,875) (33,566,306) 1,965,569 94% (53,853,022) (20,286,716) Grant Revenue - 631,000 631,000 - (631,000) Total Revenues and Other Sources 852,765,001 806,222,352 (46,542,649) 1,292,472,530 486,250,178OPERATING EXPENSES Cost of Energy 518,879,875 583,382,510 64,502,635 112% 948,529,425 365,146,915 Professional Services and Consultants 12,007,530 9,176,636 (2,830,894) 76% 22,939,626 13,762,990 Personnel Costs 6,500,242 5,053,535 (1,446,707) 78% 13,178,031 8,124,496 Marketing and Outreach 1,557,720 1,165,642 (392,078) 75% 2,973,829 1,808,187 General and Administration 4,272,938 1,164,206 (3,108,732) 27% 7,861,973 6,697,767 Programs 145,750 100,000 (45,750) 69% 278,250 178,250 Total Operating Expenses 543,364,055 600,042,529 56,678,474 995,761,134 395,718,605 Operating Income (Loss) 309,400,946 206,179,823 (103,221,123) 296,711,396 90,531,573NON-OPERATING REVENUES (EXPENSES) Investment Income - 2,993,013 2,993,013 - (2,993,013) Interest and Related Expenses (1,218,787) (1,106,705) 112,082 91% (2,437,574) (1,330,869) Transfer to Capital Investment Program (1,920,000) - 1,920,000 0% (3,840,002) (3,840,002) Total Non-Operating Revenues (Expenses) (3,138,787) 1,886,308 5,025,095 (6,277,576) (8,163,884)NET INCREASE (DECREASE) $ 208,066,131 306,262,159 $ (98,196,028) $ 290,433,820 $ 82,367,689 $

SAN DIEGO COMMUNITY POWER

BUDGETARY COMPARISON SCHEDULE
Six Months Ended December 31, 2023

OPERATING FUND
See accountants' compilation report.

SAN DIEGO COMMUNITY POWER
Staff Report – Item 3
-------------------------------------------------------------------------------------------------------------------- To: San Diego Community Power Board of Directors
From: Colin Santulli, Director of Programs
Via: Jack Clark, Chief Operating Officer
Subject: Update on Programs
Date: February 22, 2024
--------------------------------------------------------------------------------------------------------------------

RECOMMENDATIONS
Receive and file the update on customer energy programs.

BACKGROUND
Staff will provide regular updates to the Board of Directors (“Board”) regarding the following SDCP customer energy programs: Building Electrification, Energy Education, Energy Efficiency, Flexible Load, Grant Programs, and Solar and Energy Storage.

ANALYSIS AND DISCUSSION
Updates on customer energy programs are detailed below.

Building Electrification
California Energy Commission (“CEC”) Equitable Building Decarbonization (“EBD”) Program
Status: In December 2023, the CEC released a Request for Information (“RFI”) in which they asked for input on how the federal Home Efficiency Rebates (“HOMES”) program (funded by the Inflation Reduction Act) could be braided with the EBD program. The RFI closed on January 26 and Staff have been reviewing comments. The information gleaned from the RFI is likely to inform any potential Request for Proposals (“RFPs”) from the CEC to select the EBD and HOMES program administrators.

In January 2024, the Governor released his initial State budget proposal in which $283 million was cut from the EBD program (going from the $922 million allocated to $639 million). Since the State budget has not been adopted, additional changes to the EBD budget may be possible. Staff will continue to monitor the budget process to stay informed about the EBD program.

Next Steps: Staff will continue to monitor for a potential RFP and meet with SoCalREN and the coalition to iron out proposal details. Staff anticipate that this program will launch in 2025 given the delays in the release of the RFP.

Energy Education
Energy Education Website
Status: In January 2024, promotional activities of the marketplace and SDCP’s Power Your Life and Electrify Your Life webpages kicked off to help educate customers and encourage adoption of these technologies. This was mentioned in SDCP’s inaugural newsletter that went out to over 1,500 subscribers and had a 56% open rate and led to 41 unique clicks on the Electrify Your Life webpage. SDCP’s social media posts have generated 4,000 impressions with an average engagement rate of 6% across Instagram, Facebook, and LinkedIn.

Next Steps: Implementation of the marketing campaign for the marketplace is underway by SDCP’s Public Affairs team. Staff will be collaborating with Electrum to expand the list of eligible local contractors in the Electrum database and promote the marketplace.

Energy Efficiency
California Department of Food and Agriculture (“CDFA”) Healthy Refrigeration Grant Program
Status: At the January 2024 Board meeting, the Board adopted a Resolution that authorizes SDCP to accept, appropriate, and expend the CDFA grant funding. Staff are still waiting to receive the grant agreement and associated scope from CDFA.

Next Steps: Staff expect to negotiate and execute the grant agreement with CDFA in Q1 2024 and to launch the pilot program in Q2/Q3 2024. Following execution of the agreement, Staff will develop program materials, issue solicitations as necessary to contract subconsultants, and start program outreach.

Regional Energy Network (“REN”) Formation
Please refer to Item 3 of the January 2024 Board staff report for the most recent update on this program.

Flexible Load
Flexible Load Strategy
Please refer to Item 3 of the January 2024 Board staff report for the most recent update on this program.

Grant Programs
Community Grant Program
Status: Staff have been developing the FY 2023-24 program guidelines over the last few months with the program administrator, San Diego Foundation (“SDF”), and are now targeting to launch the next grant cycle on February 26, 2024. At the February 2024 Board meeting, Staff are seeking approval of the Community Clean Energy Grant Program Policy.

Next Steps: Pending Board approval of the Community Clean Energy Grant Program Policy, Staff will continue to prepare application and promotional outreach materials for the next grant cycle that incorporates the adjustments to the Previous Policy.

Member Agency Grant Program
Status: At the August 2023 Board meeting, the Board approved the Member Agency Grant Program Policy and in December 2023, Staff executed an agreement with the San Diego Regional Climate Collaborative (“SDRCC”) to administer the program. Throughout January 2024, Staff worked with SDRCC to finalize the program guidelines. The program officially opened to SDCP’s member agencies on February 5, 2024. The purpose of the program is to support member agency’s climate action goals. Each member agency is eligible to receive a $50,000 grant to use for initiatives, projects, or programs that advance or promote one or more of the following focus areas: clean energy adoption, carbon emissions reduction, climate equity, local economic development, and energy resilience.

Next Steps: The grant opportunity will be open for 10 weeks, closing on April 12, 2024.

During the application period, SDRCC will work with member agency staff to provide project development and application support. Grants are anticipated to be awarded by June 2024.

Solar and Energy Storage
Net Energy Metering (“NEM”) and Net Billing Tariff (“NBT”) Please refer to Item 2 of the December 2023 Board staff report for the most recent update on this program. Staff anticipate bringing back an item to the Board at the end of Q1 2024 to update the tariff with support for virtual and aggregation versions of NBT.

Residential Solar + Storage Program
Status: Staff have continued to obtain feedback from stakeholders on the design for a solar plus battery storage incentive program. In January 2024, Staff held two virtual industry workshops to ensure maximum industry feedback was received. The 72 attendees at the workshops included installers, aggregators, providers, and battery manufacturers. Staff learned that many in the industry are unfamiliar with SDCP and therefore it is key to continue to engage with the industry to ensure the program can be successful. Overall, the industry responded positively to the program with additional feedback expected from California Solar & Storage Association (“CALSSA”) members.

Based on feedback collected to date and research on other related existing solar and storage incentive programs, Staff have developed an initial program design that includes a one-time, upfront incentive and an annual performance incentive; the performance incentive will be based on SDCP managing a daily dispatch of the participating batteries.

Staff are drafting a Program Manual in addition to developing battery and installer requirements to ensure the highest quality for SDCP customers. At the February 2024 CAC meeting, Staff solicited feedback on the initial program design.

Next Steps: Staff anticipate bringing the final program design to the March 2024 Board meeting prior to the anticipated program launch in Q2/Q3 2024.

Disadvantaged Communities–Single-Family Affordable Solar Homes (“DAC-SASH”) Readiness Pilot Status: At the February 2024 Board meeting, Staff are seeking approval of a Pilot Project Agreement with Grid Alternatives (“GRID”) to implement the DAC-SASH Readiness Pilot.

The pilot will provide roof repairs or replacements for homes that are eligible for the DAC-SASH program but aren’t able to participate due to the condition of their roofs.

Next Steps: Pending Board approval of the Pilot Project Agreement, work with GRID would begin in late February 2024, with GRID starting to identify and enroll homes in Spring 2024.

Solar for Our Communities
Status: Since securing California Public Utilities Commission (“CPUC”) approval for SDCP’s solicitation documents in August 2023, Staff have proactively pursued the implementation of the Disadvantaged Communities Green Tariff (“DAC-GT”) and Community Solar Green Tariff (“CSGT”) programs, with the aim of delivering renewable energy access to disadvantaged communities. Following the issuance of the Request for Offer (“RFO”) on August 25, 2023 to 1,555 pre-qualified vendors, Staff facilitated a Q&A session on November 3, 2023 to address developer inquiries. While formal offer submissions are yet to be received, proactive engagement with potential developers suggests strong interest, particularly in DAC-GT projects.

Staff have implemented a comprehensive outreach strategy to maximize program outreach. This strategy included hosting three well-attended webinars (56 participants), actively engaging in relevant conferences, and launching the dedicated "Solar for Our Communities" webpage, a centralized resource hub for developers featuring program information and essential materials.

Next Steps: The deadline for RFO submissions is February 24, 2024. Staff will follow up with RFO respondents as necessary from February 26 to March 25, 2024 and send supplier notification for SDCP’s short list selection by April 29, 2024. The evaluation team will begin reviewing offers in early May 2024 and anticipate completing the evaluation by June 2024.

In Q1 2024, a comprehensive website designed for Community Sponsors will be launched. This centralized hub will serve as a valuable resource for qualified entities, including nonprofit community-based organizations, schools, and government agencies located in the cities of Chula Vista, National City, and San Diego. The website will list the benefits of becoming a Community Sponsor such as access to 100% renewable energy, reduced electricity costs, and enhanced community engagement opportunities. It will also outline the responsibilities and duties of Community Sponsors by highlighting the crucial role Community Sponsors play in the CSGT program, encompassing site selection, community outreach and engagement, and collaboration with solar developers. A step-by-step guide will be readily available to clarify the application process and clearly outline eligibility requirements and necessary documentation.

To foster direct connections between Community Sponsors and developers, the website will host a convenient "Community Sponsor Interest Form." This form will allow interested entities to readily share their contact information and preferred communication methods.

Solar developers can access submitted interest forms to efficiently identify potential partners located within their target areas. Additionally, Staff will leverage the collected information to reach out to interested Community Sponsors, providing personalized support and guidance throughout the program.

To address potential land availability concerns early on, Staff are proactively collaborating with member agencies to identify suitable project sites on city and county land to proactively address land constraints and minimize delays.

AD-HOC COMMITTEE AND/OR SUBCOMITTEE REVIEW
N/A

FISCAL IMPACT
N/A

ATTACHMENTS
N/A

SAN DIEGO COMMUNITY POWER
Staff Report – Item 4
--------------------------------------------------------------------------------------------------------------------- To: San Diego Community Power Board of Directors
From: Byron Vosburg, Managing Director of Power Services Via: Karin Burns, Chief Executive Officer
Subject: Update on Power Resources
Date: February 22, 2024
---------------------------------------------------------------------------------------------------------------------

RECOMMENDATION
Recommendation: Receive and file update on Power Resources

BACKGROUND
Staff provides the updates below to the Board of Directors regarding SDCP’s power energy procurement activities.

ANALYSIS AND DISCUSSION
Power Services Staffing
Building out a team of experienced, knowledgeable energy professionals has long been a top priority and allows SDCP not only to solicit, negotiate, and administer contracts for energy supply effectively, but also to monitor market activity, manage risk, bring in-house several activities that have historically been completed by consultants, and to dedicate additional resources to local and distributed energy procurement and development efforts. The SDCP Power Services team, having recently hired a Compliance Analyst and a Contract Management Associate, is now ten people strong and excited to continue stable, prudent growth through 2024.

To help manage the risks associated with its growing power portfolio and financial & budget processes, staff issued an RFP for Professional Services for Energy Trading Risk Management (ETRM) in January 2024. The range of ETRM functions may include deal capture, position tracking and management, valuation, reporting, risk analysis, settlements, and budget integration. Staff expect to review and evaluate vendor submissions throughout Q2 2024, targeting board review of selected vendor in early Q3 for implementation by Q1 2025.

Long-term Renewable Energy RFPs
As SDCP strives to meet its environmental, financial, and regulatory compliance goals and requirements, long-term power purchase agreements (PPAs) are becoming integral components of its energy supply portfolio. Long-term PPAs provide renewable generation facility developers with the certain revenue stream against which they can finance up-front capital requirements, so each long-term PPA that SDCP signs with a developing facility will underpin a new, incremental renewable energy project. In addition, long-term PPAs lock in renewable energy supply around which SDCP can build its power supply portfolio while also providing power supply cost certainty around which SDCP can develop its pro forma financial model. Moreover, the California Renewable Portfolio Standard (RPS), as modified in 2015 by Senate Bill 350, requires that SDCP provide 65% of its RPS-required renewable energy from contracts of at least ten years in length.

Finally, in D.21-06-025, the California Public Utilities Commission (CPUC) required each Load Serving Entity (LSE) in California to make significant long-term purchase commitments for resource adequacy from new, incremental generation facilities that will achieve commercial operation during 2023 through 2026 for purposes of “Mid Term Reliability” (MTR). These requirements have been augmented and extended into 2026 and 2027 via D.23-02-040.

In pursuit of long-term contracts for renewable energy, staff released two RFPs for eligible Renewable Energy resources and an RFP for Stand Alone Storage projects in the past 18 months. The SDCP Board has approved resulting contracts for over 571 MW of renewable generation and 578 MW of storage capacity. Staff remain in negotiations with several respondents for additional resources that are expected to be online between 2025 and 2028. Staff and the Energy Contracts Working Group (ECWG) evaluate all RFP submissions prior to entering negotiations with selected participants. Assuming that Staff and shortlisted developer(s) are able to agree to mutually agreeable contracts consistent with terms authorized by the ECWG, Staff then review draft agreements with the SDCP Board for approval and authorization to execute the relevant documents.

Local Development
SDCP’s rolling Local RFI remains open and, in the last twelve months, has yielded eight board-approved contracts for local generation and storage facilities. SDCP also released an RFO for distributed renewable energy resources (DERs) for which offers were due on December 22nd, and which focuses on a broad range of distribution-level renewable projects within San Diego County. Staff have notified shortlisted participants and hope to present a handful of resulting PPAs to the Board in the coming. Additional ongoing local initiatives include a Feed-in-Tariff Program revamp and expansion, expected midyear, and continued collaboration with member agency staff to identify strategic opportunities to further infill development in 2024.

As Program Administrators of the CPUC’s Disadvantaged Communities Green Tariff (DAC-GT) and Community Solar Green Tariff (CSGT) programs, SDCP launched the RFP solicitation for respective program resources on August 26th, proposals for which will be due February 24, 2024. SDCP has hosted three webinars to aid bidders with the solicitation process.

SDCP’s Local RFI and Feed-in Tariff remain open. More information is available about each at the links below.
• https://sdcommunitypower.org/resources/solicitations/ • https://sdcommunitypower.org/programs/feed-in-tariff/ Short-Term RPS Procurement
SDCP staff continues to actively manage its environmental portfolio and closely monitor the market for renewable and carbon-free energy sources, procuring RPS in the bi-lateral market, and continuing procurement efforts as market opportunities become available.

These procurement efforts will serve to help meet SDCP’s near-term environmental goals as long-term projects in development come online.

Market Update
Due to limited resource availability in the broader Western Interconnection and lingering effects of the COVID-19 pandemic, namely inflation and heavily impacted commodity supply chains that have delayed development of new-build energy resources expected to be online over the last two years, the market for renewable energy and resource adequacy (RA) resources continues to be exceptionally tight and expensive. Staff are working with developers, industry groups, the CPUC, and CA Governor’s Office and legislators to brainstorm near-term solutions while also actively procuring short-term energy and capacity products and long-term energy resources i) to meet SDCP's portfolio needs practically and cost-effectively and ii) to establish a portfolio of resources that will provide value to SDCP and California's clean, reliable energy needs into the future.

COMMITTEE REVIEW
N/A

FISCAL IMPACT
N/A

ATTACHMENTS
N/A

SAN DIEGO COMMUNITY POWER
Staff Report – Item 5
------------------------------------------------------------------------------------------------------------------- To: San Diego Community Power Board of Directors
From: Chandra Pugh, Director of People Operations
Via: Karin Burns, Chief Executive Officer
Subject: Update on Human Resources
Date: February 22, 2024
----------------------------------------------------------------------------------------------------------------

RECOMMENDATION
Receive and File the Update on Human Resources.

Human Resources (HR) has been working on the following priorities:

Hiring
This month, SDCP welcomed Veera Tyagi, General Counsel, to the team.

Current open positions include:

Clerk of the Board
IT Manager
Updates:

HR and the Executive Team have reviewed the 2024 Mercer study, which includes recommended role analysis and salary grades for current and proposed jobs developed at SDCP. Updated salary grades have been discussed with leadership and will be communicated to the staff this month.

Our 2023 Performance Review Cycle has been launched to all staff. This is an exciting time for the organization to reflect on accomplishments this past year and to provide feedback and guidance to our employees as they progress in their roles and careers with SDCP.

SDCP is also planning a series of monthly Lunch and Learns. Our first Lunch and Learn will be conducted in partnership with the County of San Diego. Representatives will be onsite to conduct a free workshop and provide assessments and ergonomic education to employees to prevent injuries, boost productivity, and foster a sense of well-being among staff members.

DISCUSSION AND ANALYSIS
N/A

COMMITTEE REVIEW
N/A

FISCAL IMPACT
N/A
ATTACHMENTS:

N/A

SAN DIEGO COMMUNITY POWER
Staff Report – Item 6
-------------------------------------------------------------------------------------------------------------------- To: San Diego Community Power Board of Directors
From: Lucas Utouh, Senior Director of Data Analytics and Customer Operations

Via: Karin Burns, Chief Executive Officer

Subject: Update on Customer Operations

Date: February 22, 2024
--------------------------------------------------------------------------------------------------------------------

RECOMMENDATION

Receive and file an update on various customer operations.

BACKGROUND

Staff will provide regular updates to the Community Advisory Committee centered around tracking opt actions (i.e., opt outs, opt ups and opt downs) as well as customer engagement metrics. The following is a brief overview of items pertaining to customer operations.

ANALYSIS AND DISCUSSION

A) Mass Enrollment Update

Phase 4:

Mass enrollment for our Non-Net Energy Metering (NEM) customers in National City and Unincorporated County of San Diego is officially complete as of May 3, 2023. As of January 31, 2024, SDCP is serving a cumulative total count of 944,489 active accounts correlating to 1,135,078 meters. There are 166,141 active accounts already enrolled in Unincorporated County of San Diego and 18,834 in National City.

Accounts on Net Energy Metering (NEM) within Phase 4 in National City and County of San Diego began enrollment into SDCP service in April 2023 and will continue for the next twelve months, coinciding with their true up month through March 2024. Enrolled customers will receive 2 post enrollment notices through the mail at their mailing address on file within 60 days of their account switching over to SDCP service.

B) Customer Participation Tracking
Staff and Calpine have worked together to create a reporting summary of customer actions to opt out of SDCP service, opt up to Power100, or opt down from Power100 to PowerOn. The below charts summarize these actions accordingly as of January 30th, 2024:
*Historical opt outs including inactive accounts as of 1/30/2024.

Phase 4 mass enrollment process in National City and Unincorporated County of San Diego for Non-Net Energy Metering (NEM) customers is officially completed as of May 2023. The participation rate for this new phase is fluid and will change as we continue with our enrollment of Net Energy Metering (NEM) customers from April 2023 through March 2024. In the interim, we are reporting on the opt outs and eligible accounts associated with the phase based on those accounts that we have noticed for enrollment on a rolling basis as of the reporting month.

C) Contact Center Metrics
Call volumes in January have remained relatively steady. With the transition to our Board-approved rates effective as of February 1st, 2024, call volumes are expected to likely increase.

The chart below summarizes contact made by customers into our Contact Center broken down by month through January 30, 2024:

Similar to other CCAs’ service territories, we are anticipating the trend of our customers calling into our Contact Center’s Interactive Voice Response (IVR) system tree and being able to self-serve their opt actions using the recorded prompts as well as utilizing our website for processing opt actions to continue accounting for over 65% of all instances.

The remaining portion of customer calls are connected to our Customer Service Representatives to answer additional questions, assist with account support, or submit opt actions.

D) Customer Service Email Trends

As of this latest reporting month, we still have a total of 13 Dedicated Customer Service Representatives staffed at our Contact Center and 2 Supervisors. Our robust Quality Assurance (QA) procedures are firmly in place to ensure that our customers are getting a world-class customer experience when they contact us.

AD-HOC COMMITTEE AND/OR SUBCOMITTEE REVIEW
N/A

FISCAL IMPACT
N/A

ATTACHMENTS
N/A

SAN DIEGO COMMUNITY POWER
Staff Report – Item 7
-------------------------------------------------------------------------------------------------------------------- To: San Diego Community Power Community Advisory Committee From: Jen Lebron, Director of Public Affairs
Via: Karin Burns, Chief Executive Officer
Subject: Marketing, Public Relations, and Local Government Affairs Date: February 22, 2024
--------------------------------------------------------------------------------------------------------------------

RECOMMENDATION
Receive and file an update on marketing, public relations, and local government affairs activities for San Diego Community Power (SDCP).

BACKGROUND
SDCP has engaged in a variety of public relations, marketing, community outreach, and local government affairs activities to drive awareness, spark community engagement, and maintain high customer enrollment.

ANALYSIS AND DISCUSSION
SDCP’s Public Affairs Department has been participating in events across our member agencies as it aims to increase general awareness and answer questions in a friendly, helpful manner.

Recent and Upcoming Public Engagement Events
Chula Vista Chamber of Commerce First Friday Breakfast
Ocean Beach Cleanup
National City Library
North San Diego Business Chamber of Commerce Regional Connect Jackie Robinson Family YMCA Dr. Martin Luther King Jr. Human Dignity Award Breakfast Martin Luther King, Jr. Parade and Festival
San Diego Business Summit
Spring Valley Library
Imperial Beach Collaborative
Sun Coast Farmers Market
Cleantech Forum North America
University Heights Library
City Heights Library
Imperial Beach Chamber of Commerce
La Mesa Chamber of Commerce
National City Chamber of Commerce
Spring Valley Sustainability Resource Fair
Cardiff Farmers Market
Malcolm X Library
La Mesa Branch Library
NAIOP San Diego
San Diego Regional Chamber of Commerce Anniversary Celebration Collier Park Reopening
Encinitas Chamber of Commerce Health and Wellness Expo
Logan Heights Library
Imperial Beach Neighborhood Food Pantry
Pacific Beach Library
San Ysidro Library
Balboa Library
Mira Mesa Library
Marketing, Communications and Outreach
SDCP provided local media with information about its 2024 rate setting process and received fair, balanced coverage. Stories that detailed the rates that went into effect on February 1 were featured in the San Diego Union-Tribune and the Voice of San Diego.

There were follow-up stories about SDCP’s power procurement and how those efforts will positively impact the affordability and reliability of electricity for customers in the long run.

The Public Affairs team has been working diligently behind the scenes to support programmatic efforts including the launch of “Solar for Our Communities” green tariff programs, a recently launched electrification education hub, webinars for developers to learn more about solar and battery storage opportunities, and soon-to-be launched programs including one that helps customers repair their roofs to be ready for solar installations and another that will distribute grants to small businesses that would benefit from more efficient refrigerators. The Public Affairs team is working closely with internal and external stakeholders to encourage participation in these programs and leveraging relationships with community partners to amplify our marketing and outreach efforts.

SDCP has ramped up its efforts to connect with local leaders. SDCP sent a representative to Sacramento alongside a delegation of local labor leaders. Staff have also been enhancing coordination with member agency staff and meeting with the leadership of sovereign tribal nations.

The Public Affairs team will continue to develop new strategies, processes and capacity over the next several months to conduct more community outreach, expand marketing and brand awareness efforts, and provide timely, accurate information across multiple channels.

AD-HOC COMMITTEE AND/OR SUBCOMITTEE REVIEW
N/A

FISCAL IMPACT
N/A

ATTACHMENTS
N/A

SAN DIEGO COMMUNITY POWER
Staff Report – Item 8
-------------------------------------------------------------------------------------------------------------------- To: San Diego Community Power Board of Directors
From: Xiomalys Crespo, Community Engagement Manager
Via: Karin Burns, Chief Executive Officer
Subject: Receive and File Community Advisory Committee Monthly Report Date: February 22, 2024
--------------------------------------------------------------------------------------------------------------------

RECOMMENDATION
Receive and file the Community Advisory Committee (CAC) monthly report.

BACKGROUND
Per Section 5.10.3 of the San Diego Community Power (SDCP) Joint Powers Authority (JPA) Agreement:

The Board shall establish a Community Advisory Committee comprised of non-Board members. The primary purpose of the Community Advisory Committee shall be to advise the Board of Directors and provide for a venue for ongoing citizen support and engagement in the strategic direction, goals, and programs of the Authority.

At the direction of the Chief Executive Officer, the CAC provides quarterly presentations to the Board of Directors in the regular agenda, and monthly reports in the consent agenda. The next quarterly presentation will take place during the February 22, 2024 Board of Directors meeting.

ANALYSIS AND DISCUSSION
During the February 8, 2024 regular CAC meeting:
• Chair Vasilakis (City of San Diego) welcomed new staff members to SDCP, including Michelle Porras, Senior Executive Assistant, and Veera Tyagi, General Counsel, who will directly support the CAC moving forward. • The CAC approved the consent agenda, which included the January meeting minutes; updates on Marketing, Public Relations, and Local Government Affairs, Customer Operations, and Programs; and the 2024 CAC Work Plan. Members received staff reports and briefings for all items.
• The CAC heard a presentation on the Mid-Year Budget Amendment, and the Account Services and Regulatory and Legislative teams provided an update on SDPC’s Load Management Standards Compliance Plan. Members asked about staffing impacts of proposed amendments to the budget and strategies for educating customers about dynamic rates, respectively.
• The CAC also heard the end of committee report for its Community Grant Program Ad-Hoc Committee, in which Members Castañeda (National City), Harris (La Mesa), and Sclafani (Chula Vista) met to provide feedback on the criteria proposed for SDCP’s next round of community grants.
• The Programs team provided a presentation on the Community Grant Program, where members learned about the process and application that will be available at the end of the month, and recommended outreach to applicants of the previous rounds as well as considering all member agencies when allocating awards. • Staff also provided a presentation on SDCP’s proposed Residential + Storage Program, in which members engaged in discussion around the benefits of making the incentives available to renters and multi-family housing. • Committee members had no recommendations on potential agenda items for the Board of Directors.

As of February 9, 2024, the CAC has two vacancies representing the County of San Diego (unincorporated). Members of the public must be residents, community leaders, and/or business owners of the respective jurisdictions and may submit their applications electronically. The vacancies have been advertised at meetings, community events, and through SDCP’s social media.

COMMITTEE REVIEW
N/A

FISCAL IMPACT
There is no fiscal impact associated with this item.

ATTACHMENTS
Attachment A: Community Advisory Committee February 8, 2024 Regular Meeting Agenda
AGENDA – COMMUNITY ADVISORY COMMITTEE – SAN DIEGO COMMUNITY POWER 1 AGENDA
Regular Meeting of Community Advisory Committee
San Diego Community Power (SDCP)
February 8, 2024
5:30 p.m.

City of San Diego Metropolitan Operations Complex (MOC II) Auditorium 9192 Topaz Way, San Diego, CA 92123
Alternate Location:
7354 Eads Avenue, San Diego, CA 92037
The meeting will be held in person at the above date, time and location. Community Advisory Committee (CAC) Members and members of the public may attend in person. Under certain circumstances, CAC Members may also attend and participate in the meeting virtually pursuant to the Brown Act (Gov. Code § 54953). As a convenience to the public, SDCP provides a call-in option and internet-based option for members of the public to virtually observe and provide public comments at its meetings. Additional details on in-person and virtual public participation are below. Please note that, in the event of a technical issue causing a disruption in the call-in option or internet-based option, the meeting will continue unless otherwise required by law, such as when a CAC Member is attending the meeting virtually pursuant to certain provisions of the Brown Act.

Note: Any member of the public may provide comments to the Community Advisory Committee (CAC) on any agenda item. When providing comments to the CAC, it is requested that you provide your name and city of residence for the record. Commenters are requested to address their comments to the CAC as a whole through the Chair. Comments may be provided in one of the following manners:

1. Providing Oral Comments During Meeting. Anyone attending in person desiring to address the CAC is asked to fill out a speaker’s slip and present it to the CAC Chair or the Secretary. To provide remote comments during the meeting, join the Zoom meeting by computer, mobile phone, or dial-in number. On Zoom video conference by computer or mobile phone, use the “Raise Hand” feature. This will notify the moderator that you wish to speak during a specific item on the agenda or during non-agenda Public Comment. Members of the public will not be shown on video but will be able to speak when called upon. If joining the meeting using the Zoom dial-in number, you can raise your hand by pressing *9. Comments will be limited to three (3) minutes.

2. Written Comments. Written public comments must be submitted prior to the start of the meeting by using this (web comment form). Please indicate a specific agenda item when submitting your comment. All written comments received prior to the meeting will be provided to the CAC members in writing. In the discretion of the Chair, the first ten (10) submitted comments shall be stated into the record of the meeting. Comments read at the meeting will be limited to the first 400 words. Comments received after the start of the AGENDA – COMMUNITY ADVISORY COMMITTEE – SAN DIEGO COMMUNITY POWER 2 meeting will be collected, sent to the CAC members in writing, and be part of the public record.

If you have anything that you wish to be distributed to the CAC, please provide it via [email protected], who will distribute the information to the Members.

The public may participate using the following remote options:

Teleconference Meeting Webinar
https://zoom.us/j/93647500600
Telephone (Audio Only)
(669) 900-6833 or (253) 215-8782 | Webinar ID: 936 4750 0600

WELCOME

ROLL CALL

PLEDGE OF ALLEGIANCE

LAND ACKNOWLEDGMENT

SPECIAL PRESENTATIONS AND INTRODUCTIONS

ITEMS TO BE WITHDRAWN OR REORDERED ON THE AGENDA

PUBLIC COMMENT FOR ITEMS NOT ON THE AGENDA
Opportunity for members of the public to address the CAC on any items not on the agenda but within the jurisdiction of the CAC. Members of the public may provide a comment in either manner described above.

CONSENT CALENDAR
All matters are approved by one motion without discussion unless a CAC member requests a specific item to be removed from the Consent Calendar for discussion. A member of the public may comment on any item on the Consent Calendar in either manner described above.

1. Approval of January 11, 2024 CAC Meeting Minutes

2. Update on Marketing, Public Relations, and Local Government Affairs

3. Update on Customer Operations

4. Update on Programs
AGENDA – COMMUNITY ADVISORY COMMITTEE – SAN DIEGO COMMUNITY POWER 3 5. Approval of the 2024 CAC Work Plan

REGULAR AGENDA
The following items call for discussion or action by the CAC.

6. Presentation on Mid-Year Budget Amendment
Recommendation: Receive and File the Mid-Year Budget Amendment Presentation

7. Update on Load Management Standards Compliance Plan
Recommendation: Receive and File the Load Management Standards Compliance Plan

8. Community Grant Program Ad-Hoc End of Committee Report Recommendation: Receive and File the Community Grant Program Ad-Hoc End of Committee Report

9. Update on Community Grant Program
Recommendation: Receive and File the Community Grant Program Update

10. Update on Residential Solar + Storage Program
Recommendation: Receive and File the Residential Solar + Storage Program Update

DISCUSSION OF POTENTIAL AGENDA ITEMS FOR BOARD OF DIRECTORS MEETINGS There are two ways that the CAC may bring items to the attention of the Board at a Board meeting:

1. Standing CAC Report. The CAC report may be a standing item on the Board agenda, in which the CAC Chair, CEO, or designated staff reports on updates related to a recent CAC meeting.

Consistent with the Brown Act, items raised during the CAC report may not result in extended discussion or action by the Board unless agendized for a future meeting.

2. Suggesting Board Agenda Items. The CAC may suggest agenda items for a Board of Directors meeting agenda by communicating with the CAC Chair and the designated SDCP staff, before and/or after a regular CAC meeting. If suggested during a regular meeting, there shall be no discussion or action by the CAC unless the item has been included on the CAC agenda. To be added to a Board agenda, items must have the approval of the SDCP Chief Executive Officer and the Chair of the Board of Directors. If approval is provided, staff must be given at least 5 business days before the date of the Board meeting to work with the CAC to draft any memos and materials necessary.

COMMITTEE MEMBER ANNOUNCEMENTS
AGENDA – COMMUNITY ADVISORY COMMITTEE – SAN DIEGO COMMUNITY POWER 4 Committee Members may briefly provide information to other members and the public. There is to be no discussion or action taken on comments made by Committee Members unless authorized by law.

ADJOURNMENT
Availability of Committee Documents
Copies of the agenda and agenda packet are available at https://sdcommunitypower.org/resources/meeting-notes/. Late-arriving documents related to a CAC meeting item which are distributed to a majority of the Members prior to or during the CAC meeting are available for public review as required by law. Public records, including agenda-related documents, can instead be requested electronically at [email protected] or by mail to SDCP at PO Box 12716, San Diego, CA 92112. The documents may also be posted at the above website. Such public records are also available for inspection, by appointment, at San Diego Community Power, 2305 Historic Decatur Road, Suite 200, San Diego, CA 92106. Please contact [email protected] to arrange an appointment.

SAN DIEGO COMMUNITY POWER
Staff Report – Item 9
-------------------------------------------------------------------------------------------------------------------- To: San Diego Community Power Board of Directors
From: Laura Fernandez, Director of Regulatory & Legislative Affairs Aisha Cissna, Senior Policy Manager
Patrick Welch, Senior Legislative Manager
Stephen Gunther, Senior Regulatory Analyst
Via: Karin Burns, Chief Executive Officer
Subject: Update on Regulatory and Legislative Affairs
Date: February 22, 2024
--------------------------------------------------------------------------------------------------------------------

RECOMMENDATIONS
Receive and file upfdates on regulatory and legislative affairs.

BACKGROUND
Staff will provide regular updates to the Board of Directors regarding SDCP’s regulatory and legislative engagement.

ANALYSIS AND DISCUSSION
A) Regulatory Updates
Integrated Resource Planning
On January 10, 2024, the California Public Utilities Commission (CPUC) issued a Proposed Decision within the Integrated Resource Planning (IRP) proceeding. The Proposed Decision evaluates the 2022 IRPs submitted by load serving entities, and of note, certified SDCP’s 2022 IRP, which was filed in November, 2022. In addition, the Proposed Decision adopts the 2023 preferred system plan and greenhouse gas (GHG) emissions target for 2025, choosing the more ambitious 25 million metric ton (MMT) core portfolio.

Source: Propose Decision, page 65
The Proposed Decision also addressed two petitions for modification (PFM), which requested extensions on various resource procurement obligations. The Proposed Decision denies the PFM seeking a two-year extension on the energy required to be procured in D.21-06-035 to partially replace the attributes of the Diablo Canyon Power Plant, however, it partially grants the PFM seeking modifications to D.23- 02-040 and D.21-06-035, to allow extension of deadlines for procurement of long lead-time resources when certain conditions are met.

CalCCA filed opening comments on January 30, 2024, and reply comments on February 5, 2024. In general, CalCCA supported the Proposed Decision and encouraged the Commission to adopt the plans and processes as currently outlined.

Resource Adequacy
As noted in the regulatory and legislative staff report for the December 2023 meeting of the Board of Directors (see page 339), in October 2023, the CPUC opened a new order instituting rulemaking to continue to oversee the resource adequacy (RA) program.

The RA proceeding has been divided into two Tracks:
• Track 1 addresses time-sensitive issues that must be resolved for the 2025 RA compliance year, including modifications to the RA compliance and penalty structure and refinements to the existing central procurement entity (CPE) structure.
• Track 2 addresses issues that can be addressed on a longer time horizon, including structural modifications to the CPE framework, among other things.

Proposals from Parties for Track 1 of the RA Proceeding were due January 19, 2024. SDCP staff worked with CalCCA to develop a series of recommendations, including:
• Request that the Federal Energy Regulatory Commission (FERC) investigate the RA market for capacity market power to determine whether it exists and if it does exist, whether it is being exercised, and to ensure just and reasonable wholesale market rates;
• Modify the timing of penalty assessments to extend the year-ahead and month-ahead RA cure periods;
• Adopt a temporary waiver process for system and flexible RA to ensure a smooth transition through the first Slice of Day compliance year; • Increase transparency into IOU effective Planning Reserve Margin procurement;
• Revise the maximum non-resource specific RA import bid price to ensure out-of-state resources have the right incentives to provide RA capacity to California;
• Create a hydro resource counting methodology that requires mid-year updates to account for above-normal hydro conditions; and • Evaluate test year showings data to quantify the benefits of hourly transactability and commit to adopting hourly load obligation trading for slice-of-day.

On February 14, 2024, the CPUC hosted a workshop on party proposals, in which CalCCA presented on the select elements from the recommendations outlined above. Comments on party proposals are due February 23, 2024, and reply comments are due March 8, 2024.

Renewables Portfolio Standard
On February 1, the CPUC issued the Order Instituting Rulemaking (OIR) for the new Renewables Portfolio Standard (RPS) proceeding, R.24-01-017. The preliminary scope of this rulemaking is divided into three principal tasks addressing the following issues:
1) Resolving Remaining Issues from R.18-07-003
o Establishing a cost containment mechanism for utility RPS procurement, including revisions mandated by SB 2 (1X) (Simitian, Stats. 2011, ch.1) and SB 350.
o Coordinating with the integrated resource planning proceeding, or its successor proceeding, as mandated by SB 350.
2) Continuing, Monitoring, Reviewing, and Improving the RPS Program o Reviewing and approving RPS procurement plans
o Ongoing monitoring, reviewing, and revising, as needed, all RPS procurement methods and tariffs, such as IOU solicitations, renewable auction mechanism, the Renewable Market Adjusting Tariff (ReMAT), and the Bioenergy Market Adjusting Tariff (BioMAT).
o Monitoring, reviewing, and improving RPS compliance reporting formats developed by Energy Division staff in consultation with parties.
o Reviewing compliance progress of retail sellers and taking enforcement action if required.
o Reviewing and revising, if needed, penalty rules applying to the RPS program.
o Reviewing and revising, as needed, analytical tools such as the RPS Database to improve the RPS program and streamline its administration.
o Using the authority provided by § 399.15(b)(3) to explore increasing the RPS procurement percentage for later compliance periods. o Considering the integration of greenhouse gas emissions (GHG) reduction goals and metrics into RPS procurement methods; and o Coordinating with the resource adequacy proceeding, or its successor proceeding.
3) Implementing New Statutory Requirement
Comments and reply comments on the OIR are due March 4 and March 14, 2024, respectively, with a prehearing conference expected in quarter 1 of 2024.

Energy Efficiency/San Diego Regional Energy Network (SDREN) As mentioned in Item 3 of the January 18, 2024, Board staff report, the Motion of San Diego Community Power on Behalf of the San Diego Regional Energy Network for Approval of Energy Efficiency Portfolio Application (“SDREN Motion”) was submitted on January 5, 2024.

Stakeholder responses to the SDREN Motion were due February 5, 2024. Four parties submitted responses: the Joint RENs (Inland Regional Energy Network, Southern California Regional Energy Network, and the Tri-County Regional Energy Network), Public Advocates Office (PAO), SDG&E, and the Small Business Utility Advocates (SBUA).

The Joint RENs, SDG&E, and SBUA expressed support for the SDREN Motion.

PAO requested that the CPUC eliminate certain SDREN programs and make reductions to its proposed budget. In addition to expressing support for the SDREN Motion in its response, SDG&E also indicated its intent to withdraw from energy efficiency program administration.

As of the time this report was drafted, staff are reviewing and analyzing Motion responses. SDREN’s reply comments to the SDREN Motion responses are due February 15, 2024. The anticipated next steps in the CPUC’s REN approval process – subject to change at the CPUC’s discretion - include:

1. Ruling Seeking [Additional] Comment on the SDREN Business Plan

2. Opening Comments on Ruling

3. Reply Comments

4. Proposed Decision

5. Opening Comments on Proposed Decision

6. Reply Comments on Proposed Decision

7. CPUC Votes on Decision [to Authorize SDREN]
Assuming the SDREN Motion deliberation timeline mirrors that of similar Motions deliberated previously, the CPUC should have a final decision issued by the end of the year 2024. Staff will continue to provide Board updates as the SDREN moves through the CPUC regulatory process.

B) Federal Activities Report
On February 2, San Diego Community Power endorsed the Building Integrated Grids with Inter-Regional Energy Supply (BIG WIRES) Act. In fall 2023, U.S. Representative Scott Peters (one of several U.S. federal legislators in SDCP’s territory) and Senator John Hickenlooper introduced BIG WIRES, which would increase grid reliability and resilience by requiring each of the FERC transmission planning regions to better coordinate construction of an interregional transmission system.

Specifically, BIG WIRES would require each region to be able to transfer 30% of their peak electrical loads to neighboring regions. Effectively, this would enable greater power flows across the larger transmission grid to enable greater grid resilience during extreme weather events such as Winter Storms Uri and Elliot.

C) State Legislative Activities Update
Senator Toni Atkins Steps Down as Senate President pro Tem On February 5, the State Senate officially elected Senator Mike McGuire from Sonoma County to replace Senator Toni Atkins (San Diego) as the leader of the State Senate. The change in State Senate leadership did not result in any material membership changes to the Senate Committee on Energy, Utilities & Communications, which hears bills on energy matters. Senator Catherine Blakespear was added as a member to the Senate Budget Subcommittee #2 on Resources, Environmental Protection and Energy, which approves the budgets of the California Energy Commission and the California Public Utilities Commission.

California Community Choice Association (CalCCA) Annual Lobby Day SDCP’s CEO, Managing Director of Power Services, Director of Regulatory & Legislative Affairs, Senior Legislative Manager, and lobbying firm Full Moon Strategies, will be participating in CalCCA’s annual legislative lobby day on February 21 in Sacramento. It is an opportunity for SDCP to connect with legislators from the San Diego region and to discuss SDCP’s successes and challenges, and to hear about their 2024 legislative priorities. We will be highlighting SDCP’s recent procurement efforts, market challenges on resource adequacy, challenges with customer arrearages, and discussing prospective SDCP customer programs that may help control costs. In addition to meeting with SDCP’s legislative delegation, CalCCA is arranging meetings with representatives from the Governor’s office, legislative leadership, and the California Energy Commission.

Legislation Introduced to Repeal a Fixed Grid Charge Based on Income AB 1999 (Irwin) was introduced by a group of 20 legislators on January 31 to repeal the statute that authorizes an income graduated fixed charge (IGFC) on residential electric customers by July 1, 2024. The law was created by AB 205 (Committee on Budget), which was part of the 2022 State Budget. SDG&E submitted a joint proposal with the two other large IOUs to the CPUC regarding IGFC implementation. Their proposal includes an income-based fixed charge that ranges from $24-$128, with an average of $74 per month per customer.

AB 1999 (Irwin) would eliminate the ability of the CPUC to adopt an IGFC. Instead, the CPUC would have the authority to maintain the current $10 fixed charge for non-CARE customers and $5 fixed charge for CARE-customers (i.e. low-income customers). In response to the introduction of AB 1999, Governor Newsom released a statement saying he looks forward to seeing a CPUC "proposal that is consistent with AB 205 when it is released," signaling his preference that the current statute remain untouched.

Generally, an IGFC is intended to recover costs associated with physical grid assets like poles and wires and therefore, the fixed charges are on the SDG&E delivery side of the bill. However, at least one proposal at the CPUC includes some generation in the fixed charges. SDCP staff are reviewing AB 1999 (Irwin) to determine its impact on SDCP and SDCP customers.

AD-HOC COMMITTEE AND/OR SUBCOMITTEE REVIEW
N/A

FISCAL IMPACT
N/A

ATTACHMENTS
N/A

SAN DIEGO COMMUNITY POWER
Staff Report – Item 10
--------------------------------------------------------------------------------------------------------------------- To: San Diego Community Power Board of Directors
From: Eric W. Washington, Chief Financial Officer
Via: Karin Burns, Chief Executive Officer
Subject: Approve the Professional Services Agreement with Chandler Asset Management, Inc. for up to $250,000 for Financial and Investment Portfolio Management services
Date: February 15, 2024
--------------------------------------------------------------------------------------------------------------------

RECOMMENDATION
Recommend Board approval of Professional Services Agreement with Chandler Asset Management Inc. for a not-to exceed contract value of up to $250,000 through February 2025 for Financial and Investment Portfolio Management services and authorize Staff to execute the agreement.

BACKGROUND
This is a request to enter into a new Agreement with the selected vendor, Chandler Asset Management, Inc. (“Chandler”) to provide professional services for financial and investment management services that align with SDCP’s Investment Policy.

On May 25, 2023, the SDCP Board of Directors (“Board”) approved the SDCP Investment Policy. SDCP’s Investment Policy states that SDCP may engage with external investment advisors to assist in the management of SDCP’s investment portfolio in a manner consistent with the SDCP’s Policy.

On December 1, 2023, SDCP issued a Request for Proposal (“RFP”) for Financial and Investment Portfolio Management Services with Submittals due on December 19, 2023.

After conducting a formal evaluation and interview process Chandler Asset Management was selected to advance in contract negotiations on January 26, 2024.

The external investment advisers may be granted discretion to purchase and sell investment securities in accordance investment objective set forth in this Policy. SDCP may engage the services of one or more external investment advisers to assist in the management of SDCP’s investment portfolio in a manner consistent with the Investment Policy.

Staff therefore recommends for Board approval of the Financial and Investment Portfolio Management Services Request for Proposal Contract.

ANALYSIS AND DISCUSSION
As SDCP continues to build towards a 180-days cash on hand goal, it requires Financial and Investment Portfolio Management Services from a reliable and proven firm working with public institution funds. Those services must adhere to the strict requirements of the California Government Code and SDCP’s Investment Policy.

Chandler is a locally founded firm and is currently headquartered in nearby San Diego.

Chandler has over 35 years of experience working with public institutions giving them insights with the specific codes, constraints, and objectives SDCP would need to navigate. Chandler Asset Management currently serves some of SDCP’s Member Agencies such as the County of San Diego, Cities of Chula Vista, and Imperial Beach. In addition, Chandler currently serves two other California Community Choice Aggregators.

As of September 30, 2023, Chandler has more than $33.5 billion under management for clients in regions across the United States, with more than $23.3 billion under management for 156 public agencies in our home state alone. 100% of Chandler’s assets are in separately managed accounts, like SDCP’s current portfolio.

The Chandler Agreement outlines a 4-week transition process for SDCP, beginning with notification of award. This process will involve strategy development, investment preparation, and culminating in the final investment of funds. The agreement will have a 1-year term with two options for 1-year extensions. Chandler will provide all services throughout the length of the contract including:
• Annual review of the Investment Policy (All changes will require Board approval.) • Cash Flow Analysis
• Active and Conservative Investment Management
• Monthly, Quarterly and Annual Reporting Cadences
Chandler Asset Management stands out as an ideal investment management partner for San Diego Community Power. Their deep public sector expertise, tailored approach, risk-conscious philosophy, and strong history demonstrate their ability to meet SDCP's specific requirements. As SDCP seeks a reliable and trustworthy partner to navigate the complexities of public investment, Chandler presents a compelling choice to achieve investment success while upholding the highest standard of care.

Pursuant to the SDCP Procurement Policy, Contracts greater than $125,000 must be presented to the Board for approval. Staff is requesting approval of the Professional Services Agreement with Chandler Asset Management, Inc. for a not-to-exceed contract value of up to $250,000.

COMMITTEE REVIEW
The report was reviewed by the Finance and Risk Management Committee (FRMC) on February 15, 2024.

FISCAL IMPACT
SDCP will enter a contract that could cost up to $250,000.

ATTACHMENTS
Attachment A: Professional Services Agreement with Chandler Asset Management 1 SAN DIEGO COMMUNITY POWER

PROFESSIONAL SERVICES AGREEMENT
This Professional Services Agreement (“Agreement”) is made and entered into this 22nd day of February 2024, by and between SAN DIEGO COMMUNITY POWER, a California joint powers agency (“SDCP”) and Chandler Asset Management, Inc., (“Consultant”). SDCP and Consultant are sometimes individually referred to as “Party” and collectively as “Parties.”

RECITALS
A. Consultant desires to perform and assume responsibility for the provision of certain professional services required by SDCP on the terms and conditions set forth in this Agreement.

Consultant represents that it is experienced in providing Financial and Investment Portfolio Management Services, is licensed in the State of California, and is familiar with the plans of SDCP.

B. SDCP desires to engage Consultant to assist in fulfilling SDCP’s fiduciary duty to their constituents by providing high quality fixed income portfolios in a careful investment framework (“Project”) as set forth in this Agreement.

AGREEMENT

1. Scope of Services and Term.

1.1 General Scope of Services. Consultant promises and agrees to furnish to SDCP all labor, materials, tools, equipment, services, and incidental and customary work necessary to fully and adequately supply the financial and investment portfolio management services necessary for the Project (“Services”). The Services are more particularly described in Exhibit A attached hereto, and which are stated in the proposal to SDCP. All Services shall be subject to, and performed in accordance with, this Agreement, the exhibits attached hereto, and all applicable local, state and federal laws, rules and regulations.

1.1.1 Additional Terms Specific to the Investment Management Relationship.

SDCP and Consultant agree to the additional terms specific to the investment management relationship and are more particularly described in Exhibit B, were stated in the proposal to SDCP, and which are incorporated into the Agreement by reference.

1.2 Term. The term of this Agreement shall be from February 22, 2024 to February 28, 2025, unless earlier terminated as provided herein. Consultant shall complete the Services within the term of this Agreement and shall meet any other established schedules and deadlines. SDCP reserves the option to amend the Agreement for up to two additional 12-month terms.

2. Responsibilities of Consultant.

2.1 Control and Payment of Subordinates; Independent Contractor. The Services shall be performed by Consultant or under its supervision. Consultant will determine the means, 2 methods and details of performing the Services subject to the requirements of this Agreement.

SDCP retains Consultant on an independent contractor basis and not as an employee. Consultant retains the right to perform similar or different services for others during the term of this Agreement. Any additional personnel performing the Services under this Agreement on behalf of Consultant shall also not be employees of SDCP and shall at all times be under Consultant’s exclusive direction and control. Consultant shall pay all wages, salaries, and other amounts due such personnel in connection with their performance of Services under this Agreement and as required by law. Consultant shall be responsible for all reports and obligations respecting such additional personnel, including, but not limited to: social security taxes, income tax withholding, unemployment insurance, disability insurance, and workers’ compensation insurance.

2.2 Schedule of Services. Consultant shall perform the Services expeditiously, within the term of this Agreement. Consultant represents that it has the professional and technical personnel required to perform the Services in conformance with such conditions. In order to facilitate Consultant’s conformance with the Schedule, SDCP shall respond to Consultant’s submittals in a timely manner. Upon request of SDCP, Consultant shall provide a more detailed schedule of anticipated performance to meet the Schedule of Services.

2.3 Conformance to Applicable Requirements. All work prepared by Consultant shall be subject to the approval of SDCP.

2.4 Substitution of Key Personnel. Consultant has represented to SDCP that certain key personnel will perform and coordinate the Services under this Agreement. Should one or more of such personnel become unavailable, Consultant may substitute other personnel of at least equal competence upon written approval of SDCP. In the event that SDCP and Consultant cannot agree as to the substitution of key personnel, SDCP shall be entitled to terminate this Agreement for cause. As discussed below, any personnel who fail or refuse to perform the Services in a manner acceptable to SDCP, or who are determined by the SDCP to be uncooperative, incompetent, a threat to the adequate or timely completion of the Project, or a threat to the safety of persons or property, shall be promptly removed from the Project by the Consultant at the request of the SDCP.

The key personnel for performance of this Agreement are as follows:

Investment Management
[Placeholder]
Client Service
[Placeholder]
Compliance
[Placeholder]

2.5 SDCP’s Representative. In its capacity as investment manager, Consultant shall receive all instructions, directions and other communications on SDCP's behalf respecting SDCP's account from Eric Washington, SDCP Chief Financial Officer & Treasurer (“SDCP Representative”). Consultant is hereby authorized to rely and act upon all such instructions, directions and communications from such Representative or any agent of such Representative. 3 2.6 Consultant’s Representative. Consultant hereby designates Nicole Dragoo, or her designee, to act as its Representative for the performance of this Agreement (“Consultant’s Representative”). Consultant’s Representative shall have full authority to represent and act on behalf of the Consultant for all purposes under this Agreement. The Consultant’s Representative shall supervise and direct the Services, using his or her best skill and attention, and shall be responsible for all means, methods, techniques, sequences and procedures and for the satisfactory coordination of all portions of the Services under this Agreement.

2.7 Coordination of Services. Consultant agrees to work closely with SDCP staff in the performance of Services and shall be available to SDCP’s staff, consultants and other staff at all reasonable times.

2.8 Standard of Care; Performance of Employees. Consultant shall perform all Services under this Agreement in a skillful and competent manner, consistent with the standards generally recognized as being employed by professionals in the same discipline in the State of California.

Consultant represents and maintains that it is skilled in the professional calling necessary to perform the Services. Consultant warrants that all employees and sub- contractors shall have sufficient skill and experience to perform the Services assigned to them. Finally, Consultant represents that it, its employees and subcontractors have all licenses, permits, qualifications and approvals of whatever nature that are legally required to perform the Services, and that such licenses and approvals shall be maintained throughout the term of this Agreement. As provided for in the indemnification provisions of this Agreement, Consultant shall perform, at its own cost and expense and without reimbursement from SDCP, any services necessary to correct errors or omissions which are caused by the Consultant’s failure to comply with the standard of care provided for herein. Any employee of the Consultant or its subcontractors who is determined by SDCP to be uncooperative, incompetent, a threat to the adequate or timely completion of the Project, a threat to the safety of persons or property, or any employee who fails or refuses to perform the Services in a manner acceptable to SDCP, shall be promptly removed from the Project by the Consultant and shall not be re-employed to perform any of the Services or to work on the Project.

2.9 Laws and Regulations. Consultant shall keep itself fully informed of and in compliance with all local, state and federal laws, rules and regulations in any manner affecting the performance of the Project or the Services, including all Cal/OSHA requirements, and shall give all notices required by law. Consultant shall be liable for all violations of such laws and regulations in connection with Services. If the Consultant performs any work knowing it to be contrary to such laws, rules and regulations and without giving written notice to SDCP, Consultant shall be solely responsible for all costs arising therefrom. Consultant shall defend, indemnify and hold SDCP, its officials, directors, officers, employees and agents free and harmless, pursuant to the indemnification provisions of this Agreement, from any claim or liability arising out of any failure or alleged failure to comply with such laws, rules or regulations.

2.10 Insurance.

2.10.1 Time for Compliance. Consultant shall not commence the Services under 4 this Agreement until it has provided evidence satisfactory to SDCP that it has secured all insurance required under this section, in a form and with insurance companies acceptable to SDCP. In addition, Consultant shall not allow any subcontractor to commence work on any subcontract until it has provided evidence satisfactory to SDCP that the subcontractor has secured all insurance required under this section.

2.10.2 Minimum Requirements. Consultant shall, at its expense, procure and maintain for the duration of the Agreement insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the Agreement by the Consultant, its agents, representatives, employees or subcontractors. Consultant shall also require all of its subcontractors to procure and maintain the same insurance for the duration of the Agreement. Such insurance shall meet at least the following minimum levels of coverage:
(A) Minimum Scope of Insurance. Coverage shall be at least as broad as the latest version of the following: (1) General Liability: Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001 or exact equivalent); (2) Automobile Liability: Insurance Services Office Business Auto Coverage (form CA 0001, code 1 (any auto) or exact equivalent); and (3) Workers’ Compensation and Employer’s Liability: Workers’ Compensation insurance as required by the State of California and Employer’s Liability Insurance. (B) Minimum Limits of Insurance. Consultant shall maintain limits no less than: (1) General Liability: $1,000,000 per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability Insurance or other form with general aggregate limit is used, either the general aggregate limit shall apply separately to this Agreement/location or the general aggregate limit shall be twice the required occurrence limit; (2) Automobile Liability: $1,000,000 per accident for bodily injury and property damage; and (3) Workers’ Compensation and Employer’s Liability: Workers’ Compensation limits as required by the Labor Code of the State of California. Employer’s Liability limits of $1,000,000 per accident for bodily injury or disease.

2.10.3 Professional Liability. Consultant shall procure and maintain, and require its subcontractors to procure and maintain, for a period of five (5) years following completion of the Services, errors and omissions liability insurance appropriate to their profession. Such insurance shall be in an amount not less than $2,000,000 per claim. This insurance shall be endorsed to include contractual liability applicable to this Agreement and shall be written on a policy form coverage specifically designed to protect against acts, errors or omissions of the Consultant. “Covered Professional Services” as designated in the policy must specifically include work performed under this Agreement. The policy must “pay on behalf of” the insured and must include a provision establishing the insurer's duty to defend.

2.10.4 Insurance Endorsements. The insurance policies shall contain the following provisions, or Consultant shall provide endorsements on forms supplied or approved by SDCP to add the following provisions to the insurance policies:
(A) General Liability.
5 (i) Commercial General Liability Insurance must include coverage for (1) Bodily Injury and Property Damage; (2) Personal Injury/Advertising Injury; (3) Premises/Operations Liability; (4) Products/Completed Operations Liability; (5) Aggregate Limits that Apply per Project; (6) Explosion, Collapse and Underground (UCX) exclusion deleted; (7) Contractual Liability with respect to this Agreement; (8) Broad Form Property Damage; and (9) Independent Consultants Coverage.
(ii) The policy shall contain no endorsements or provisions limiting coverage for (1) contractual liability; (2) cross liability exclusion for claims or suits by one insured against another; or (3) contain any other exclusion contrary to the Agreement. (iii) The policy shall give SDCP, its directors, officials, officers, employees, and agents insured status using ISO endorsement forms 20 10 10 01 and 20 37 10 01, or endorsements providing the exact same coverage.
(iv) The additional insured coverage under the policy shall be “primary and non-contributory” and will not seek contribution from SDCP’s insurance or self-insurance and shall be at least as broad as CG 20 01 04 13, or endorsements providing the exact same coverage.
(B) Automobile Liability. The automobile liability policy shall be endorsed to state that: (1) SDCP, its directors, officials, officers, employees, agents and volunteers shall be covered as additional insureds with respect to the ownership, operation, maintenance, use, loading or unloading of any auto owned, leased, hired or borrowed by the Consultant or for which the Consultant is responsible; and (2) the insurance coverage shall be primary insurance as respects SDCP, its directors, officials, officers, employees, agents and volunteers, or if excess, shall stand in an unbroken chain of coverage excess of the Consultant’s scheduled underlying coverage. Any insurance or self-insurance maintained by SDCP, its directors, officials, officers, employees, agents and volunteers shall be excess of the Consultant’s insurance and shall not be called upon to contribute with it in any way.
(C) Workers’ Compensation and Employers Liability Coverage. (i) Consultant certifies that it is aware of the provisions of Section 3700 of the California Labor Code which requires every employer to be insured against liability for workers’ compensation or to undertake self-insurance in accordance with the provisions of that code, and Consultant will comply with such provisions before commencing work under this Agreement.
(ii) The insurer shall agree to waive all rights of subrogation against SDCP, its directors, officials, officers, employees, agents and volunteers for losses paid under the terms of the insurance policy which arise from work performed by the Consultant. (D) All Coverages. Defense costs shall be payable in addition to the limits set forth hereunder. Requirements of specific coverage or limits contained in this section are 6 not intended as a limitation on coverage, limits, or other requirement, or a waiver of any coverage normally provided by any insurance. It shall be a requirement under this Agreement that any available insurance proceeds broader than or in excess of the specified minimum insurance coverage requirements and/or limits set forth herein shall be available to SDCP, its directors, officials, officers, employees and agents as additional insureds under said policies. Furthermore, the requirements for coverage and limits shall be (1) the minimum coverage and limits specified in this Agreement; or (2) the broader coverage and maximum limits of coverage of any Insurance policy or proceeds available to the named insured; whichever is greater. (i) The limits of insurance required in this Agreement may be satisfied by a combination of primary and umbrella or excess insurance. Any umbrella or excess insurance shall contain or be endorsed to contain a provision that such coverage shall also apply on a primary and non-contributory basis for the benefit of SDCP (if agreed to in a written contract or agreement) before SDCP’s own insurance or self-insurance shall be called upon to protect it as a named insured. The umbrella/excess policy shall be provided on a “following form” basis with coverage at least as broad as provided on the underlying policy(ies). (ii) Consultant shall provide SDCP at least thirty (30) days prior written notice of cancellation of any policy required by this Agreement, except that the Consultant shall provide at least ten (10) days prior written notice of cancellation of any such policy due to non-payment of premium. If any of the required coverage is cancelled or expires during the term of this Agreement, the Consultant shall deliver renewal certificate(s) including the General Liability Additional Insured Endorsement to SDCP at least ten (10) days prior to the effective date of cancellation or expiration.
(iii) The retroactive date (if any) of each policy is to be no later than the effective date of this Agreement. Consultant shall maintain such coverage continuously for a period of at least three years after the completion of the work under this Agreement.

Consultant shall purchase a one (1) year extended reporting period A) if the retroactive date is advanced past the effective date of this Agreement; B) if the policy is cancelled or not renewed; or C) if the policy is replaced by another claims-made policy with a retroactive date subsequent to the effective date of this Agreement.
(iv) The foregoing requirements as to the types and limits of insurance coverage to be maintained by Consultant, and any approval of said insurance by SDCP, is not intended to and shall not in any manner limit or qualify the liabilities and obligations otherwise assumed by the Consultant pursuant to this Agreement, including but not limited to, the provisions concerning indemnification.
(v) If at any time during the life of the Agreement, any policy of insurance required under this Agreement does not comply with these specifications or is canceled and not replaced, SDCP has the right but not the duty to obtain the insurance it deems necessary and any premium paid by SDCP will be promptly reimbursed by Consultant or SDCP will withhold amounts sufficient to pay premium from Consultant payments. In the alternative, SDCP may cancel this Agreement. SDCP may require the Consultant to provide complete copies of all insurance policies in effect for the duration of the Project. 7 (vi) Neither SDCP nor any of its directors, officials, officers, employees or agents shall be personally responsible for any liability arising under or by virtue of this Agreement.

2.10.5 Separation of Insureds; No Special Limitations. All insurance required by this Section shall contain standard separation of insureds provisions. In addition, such insurance shall not contain any special limitations on the scope of protection afforded to SDCP, its directors, officials, officers, employees, agents and volunteers.

2.10.6 Deductibles and Self-Insurance Retentions. Any deductibles or self-insured retentions must be declared to and approved by SDCP. Consultant shall guarantee that, at the option of SDCP, either: (1) the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects SDCP, its directors, officials, officers, employees, agents and volunteers; or (2) the Consultant shall procure a bond guaranteeing payment of losses and related investigation costs, claims and administrative and defense expenses.

2.10.7 Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best’s rating of no less than A:VII, licensed to do business in California, and satisfactory to SDCP.

2.10.8 Verification of Coverage. Consultant shall furnish SDCP with original certificates of insurance and endorsements effecting coverage required by this Agreement on forms satisfactory to SDCP. The certificates and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf and shall be on forms provided by SDCP if requested. All certificates and endorsements must be received and approved by SDCP before work commences. SDCP reserves the right to require complete, certified copies of all required insurance policies, at any time.

2.10.9 Subcontractor Insurance Requirements. Consultant shall not allow any subcontractors to commence work on any subcontract until they have provided evidence satisfactory to SDCP that they have secured all insurance required under this section. Policies of commercial general liability insurance provided by such subcontractors shall be endorsed to name SDCP as an additional insured using ISO form CG 20 38 04 13 or an endorsement providing the exact same coverage. If requested by Consultant, SDCP may approve different scopes or minimum limits of insurance for particular subcontractors.

2.10.10 Safety. Consultant shall execute and maintain its work so as to avoid injury or damage to any person or property. In carrying out its Services, the Consultant shall at all times be in compliance with all applicable local, state and federal laws, rules and regulations, and shall exercise all necessary precautions for the safety of employees appropriate to the nature of the work and the conditions under which the work is to be performed. Safety precautions as applicable shall include, but shall not be limited to: (A) adequate life protection and life-saving equipment and procedures; (B) instructions in accident prevention for all employees and subcontractors, such as safe walkways, scaffolds, fall protection ladders, bridges, gang planks, confined space procedures, trenching and shoring, equipment and other safety devices, equipment and wearing apparel as are 8 necessary or lawfully required to prevent accidents or injuries; and (C) adequate facilities for the proper inspection and maintenance of all safety measures.

3. Fees and Payments.

3.1 Compensation. Consultant shall receive compensation, including authorized reimbursements, for all Services rendered under this Agreement at the rates set forth in Exhibit C, attached hereto. The total compensation shall not exceed Two Hundred and Fifty Thousand Dollars ($250,000) without written approval of SDCP’s CEO. Extra Work may be authorized, as described below, and, if authorized, said Extra Work will be compensated at the rates and manner set forth in this Agreement.

3.2 Payment of Compensation. Consultant shall submit to SDCP a monthly itemized statement which indicates work completed and hours of Services rendered by Consultant. The statement shall describe the amount of Services and supplies provided since the initial commencement date, or since the start of the subsequent billing periods, as appropriate, through the date of the statement. SDCP shall, within 45 days of receiving such statement, review the statement and pay all approved charges thereon.

3.3 Reimbursement for Expenses. Consultant shall not be reimbursed for any expenses unless authorized in writing by SDCP.

3.4 Extra Work. At any time during the term of this Agreement, SDCP may request that Consultant perform Extra Work. As used herein, “Extra Work” means any work which is determined by SDCP to be necessary for the proper completion of the Project, but which the Parties did not reasonably anticipate would be necessary at the execution of this Agreement. Consultant shall not perform, nor be compensated for, Extra Work without written authorization from SDCP’s Representative.

4. Accounting Records. Consultant shall maintain complete and accurate records with respect to all costs and expenses incurred under this Agreement. All such records shall be clearly identifiable. Consultant shall allow a representative of SDCP during normal business hours to examine, audit, and make transcripts or copies of such records and any other documents created pursuant to this Agreement. Consultant shall allow inspection of all work, data, documents, proceedings, and activities related to the Agreement for a period of three (3) years from the date of final payment under this Agreement.

5. General Provisions.

5.1 Termination of Agreement.

5.1.1 Grounds for Termination. SDCP may, by written notice to Consultant, terminate the whole or any part of this Agreement at any time and without cause by giving written notice to Consultant of such termination, and specifying the effective date thereof, at least seven (7) days before the effective date of such termination. Upon termination, Consultant shall be compensated only for those services which have been adequately rendered to SDCP, and 9 Consultant shall be entitled to no further compensation. Consultant may not terminate this Agreement except for cause.

5.1.2 Effect of Termination. If this Agreement is terminated as provided herein, SDCP may require Consultant to provide all finished or unfinished Documents and Data and other information of any kind prepared by Consultant in connection with the performance of Services under this Agreement. Consultant shall be required to provide such documents and other information within fifteen (15) days of the request.

5.1.3 Additional Services. In the event this Agreement is terminated in whole or in part as provided herein, SDCP may procure, upon such terms and in such manner as it may determine appropriate, services similar to those terminated.

5.2 Delivery of Notices. All reports and other communications required hereunder to be in writing shall be delivered in person, or sent by first-class mail postage prepaid, by overnight courier, by confirmed facsimile with original to follow or by confirmed electronic mail with proof of receipt to the addresses set forth below. Either party to this Agreement may, by written notice given at any time, designate a different address for the receipt of reports and other communications due hereunder:

Consultant: Chandler Asset Management
9255 Towne Centre Drive
Suite 600
San Diego, CA 92121
SDCP: San Diego Community Power
815 E Street, Suite 12716
San Diego, CA 92112
Such notice shall be deemed made when personally delivered or when mailed, forty-eight (48) hours after deposit in the U.S. Mail, first class postage prepaid and addressed to the Party at its applicable address. Actual notice shall be deemed adequate notice on the date actual notice occurred, regardless of the method of service.

5.2.1 Electronic Delivery. From time to time, Consultant may be required to deliver certain documents to SDCP such as account information, notices and required disclosures. SDCP hereby consents to Consultant’s use of electronic means, such as email, to make such delivery. This delivery may include notification of the availability of such document(s) on a website, and SDCP agrees that such notification will constitute “delivery”. SDCP further agrees to provide Consultant with SDCP’s email address(s) and to keep this information current at all times by promptly notifying Consultant of any change in email address(s). SDCP email addresses: [email protected];
[email protected];
[email protected]
10 5.3 Ownership of Materials and Confidentiality.

5.3.1 Documents & Data; Licensing of Intellectual Property. This Agreement creates a non-exclusive and perpetual license for SDCP to copy, use, modify, reuse, or sublicense any and all copyrights, designs, and other intellectual property embodied in plans, specifications, studies, drawings, estimates, and other documents or works of authorship fixed in any tangible medium of expression, including but not limited to, physical drawings or data magnetically or otherwise recorded on computer diskettes, which are prepared or caused to be prepared by Consultant under this Agreement (“Documents & Data”). Consultant shall require all subcontractors to agree in writing that SDCP is granted a non-exclusive and perpetual license for any Documents & Data the subcontractor prepares under this Agreement. Consultant represents and warrants that Consultant has the legal right to license any and all Documents & Data.

Consultant makes no such representation and warranty in regard to Documents & Data which were prepared by design professionals other than Consultant or provided to Consultant by SDCP. SDCP shall not be limited in any way in its use of the Documents & Data at any time, provided that any such use not within the purposes intended by this Agreement shall be at SDCP’s sole risk.

5.3.2 Intellectual Property. In addition, SDCP shall have and retain all right, title and interest (including copyright, patent, trade secret and other proprietary rights) in all plans, specifications, studies, drawings, estimates, materials, data, computer programs or software and source code, enhancements, documents, and any and all works of authorship fixed in any tangible medium or expression, including but not limited to, physical drawings or other data magnetically or otherwise recorded on computer media (“Intellectual Property”) prepared or developed by or on behalf of Consultant under this Agreement as well as any other such Intellectual Property prepared or developed by or on behalf of Consultant under this Agreement.

SDCP shall have and retain all right, title and interest in Intellectual Property developed or modified under this Agreement whether or not paid for wholly or in part by SDCP, whether or not developed in conjunction with Consultant, and whether or not developed by Consultant. Consultant will execute separate written assignments of any and all rights to the above referenced Intellectual Property upon request of SDCP.

Consultant shall also be responsible to obtain in writing separate written assignments from any subcontractors or agents of Consultant of any and all right to the above referenced Intellectual Property. Should Consultant, either during or following termination of this Agreement, desire to use any of the above-referenced Intellectual Property, it shall first obtain the written approval of the SDCP.

All materials and documents which were developed or prepared by the Consultant for general use prior to the execution of this Agreement and which are not the copyright of any other party or publicly available and any other computer applications, shall continue to be the property of the Consultant. However, unless otherwise identified and stated prior to execution of this Agreement, Consultant represents and warrants that it has the right to grant the exclusive and perpetual license for all such Intellectual Property as provided herein.

SDCP further is granted by Consultant a non-exclusive and perpetual 11 license to copy, use, modify or sub-license any and all Intellectual Property otherwise owned by Consultant which is the basis or foundation for any derivative, collective, insurrectional, or supplemental work created under this Agreement.

5.3.3 Confidential Relationship. The terms and conditions of this Agreement, and all information and advice furnished by either party to the other shall be treated as confidential and shall not be disclosed to third parties except (i) as required by law, rule, or regulation, (ii) as requested by a regulatory authority, (iii) for disclosures by either party of information that has become public by means other than wrongful conduct by such party or its officers, employees, or other personnel, (iv) for disclosures by either party to its legal counsel, accountants, or other professional advisers, (v) as necessary for Consultant to carry out its responsibilities hereunder, or (vi) as otherwise expressly agreed by the parties.

5.3.4 Infringement Indemnification. Consultant shall defend, indemnify and hold SDCP, its directors, officials, officers, employees, volunteers and agents free and harmless, pursuant to the indemnification provisions of this Agreement, for any alleged infringement of any patent, copyright, trade secret, trade name, trademark, or any other proprietary right of any person or entity in consequence of the use on the Project by SDCP of the Documents & Data, including any method, process, product, or concept specified or depicted.

5.4 Cooperation; Further Acts. The Parties shall fully cooperate with one another and shall take any additional acts or sign any additional documents as may be necessary, appropriate or convenient to attain the purposes of this Agreement.

5.5 Attorney’s Fees. If either Party commences an action against the other Party, either legal, administrative or otherwise, arising out of or in connection with this Agreement, the prevailing party in such litigation shall be entitled to have and recover from the losing party reasonable attorney’s fees and all other costs of such action.

5.6 Indemnification.

5.6.1 To the fullest extent permitted by law, Consultant shall defend (with counsel of SDCP’s choosing), indemnify and hold the SDCP, its officials, officers, employees, volunteers, and agents free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury of any kind, in law or equity, to property or persons, including wrongful death, in any manner arising out of, pertaining to, or incident to any acts, errors or omissions, or willful misconduct of Consultant, its officials, officers, employees, subcontractors, consultants or agents in connection with the performance of the Consultant’s services, the Project or this Agreement, including without limitation the payment of all damages, expert witness fees and attorney’s fees and other related costs and expenses. Consultant shall defend, at Consultant’s own cost, expense and risk, any and all such aforesaid suits, actions or other legal proceedings of every kind that may be brought or instituted against SDCP, its directors, officials, officers, employees, agents or volunteers. Consultant shall pay and satisfy any judgment, award or decree that may be rendered against SDCP or its directors, officials, officers, employees, agents or volunteers, in any such suit, action or other legal proceeding. Consultant shall reimburse SDCP and its directors, officials, officers, consultants, employees, agents and/or volunteers, for any and 12 all legal expenses and costs, including reasonable attorneys’ fees, incurred by each of them in connection therewith or in enforcing the indemnity herein provided. Consultant's obligation to indemnify shall not be restricted to insurance proceeds, if any, received by Consultant, the SDCP, its officials, officers, employees, agents, or volunteers. This section shall survive any expiration or termination of this Agreement.

5.6.2 If Consultant’s obligation to defend, indemnify, and/or hold harmless arises out of Consultant’s performance of “design professional” services (as that term is defined under Civil Code § 2782.8), then, and only to the extent required by Civil Code § 2782.8, which is fully incorporated herein, Consultant’s indemnification obligation shall be limited to claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Consultant, and, upon Consultant obtaining a final adjudication by a court of competent jurisdiction, Consultant’s liability for such claim, including the cost to defend, shall not exceed the Consultant’s proportionate percentage of fault.

5.7 Entire Agreement. This Agreement contains the entire Agreement of the Parties with respect to the subject matter hereof, and supersedes all prior negotiations, understandings or agreements. This Agreement may only be modified by a writing signed by both Parties.

5.8 Governing Law. This Agreement shall be governed by the laws of the State of California. Venue shall be in San Diego County.

5.9 Time of Essence. Time is of the essence for each and every provision of this Agreement.

5.10 SDCP’s Right to Employ Other Consultants. SDCP reserves right to employ other consultants in connection with this Project.

5.11 Successors and Assigns. This Agreement shall be binding on the successors and assigns of the Parties.

5.12 Assignment or Transfer. Consultant shall not assign, hypothecate, or transfer, either directly or by operation of law, this Agreement or any interest herein without the prior written consent of SDCP. Any attempt to do so shall be null and void, and any assignees, hypothecates or transferees shall acquire no right or interest by reason of such attempted assignment, hypothecation or transfer.

5.13 Construction; References; Captions. Since the Parties or their agents have participated fully in the preparation of this Agreement, the language of this Agreement shall be construed simply, according to its fair meaning, and not strictly for or against any Party. Any term referencing time, days or period for performance shall be deemed calendar days and not work days.

All references to Consultant include all personnel, employees, agents, and subcontractors of Consultant, except as otherwise specified in this Agreement. All references to SDCP include its elected officials, officers, employees, agents, and volunteers except as otherwise specified in this Agreement. The captions of the various articles and paragraphs are for convenience and ease of reference only, and do not define, limit, augment, or describe the scope, content, or intent of this 13 Agreement.

5.14 Amendment; Modification. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing and signed by both Parties.

5.15 Waiver. No waiver of any default shall constitute a waiver of any other default or breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or service voluntarily given or performed by a Party shall give the other Party any contractual rights by custom, estoppel, or otherwise.

5.16 No Third Party Beneficiaries. There are no intended third party beneficiaries of any right or obligation assumed by the Parties.

5.17 Invalidity; Severability. If any portion of this Agreement is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect.

5.18 Prohibited Interests. Consultant maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for Consultant, to solicit or secure this Agreement. Further, Consultant warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for Consultant, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. For breach or violation of this warranty, SDCP shall have the right to rescind this Agreement without liability. For the term of this Agreement, no member, officer or employee of SDCP, during the term of his or her service with SDCP, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom.

5.19 Equal Opportunity Employment and Subcontracting. Consultant represents that it is an equal opportunity employer and it shall not discriminate on the basis of race, gender, gender expression, gender identity, religion, national origin, ethnicity, sexual orientation, age, or disability in the solicitation, selection, hiring, or treatment of applicants, employees, subcontractors, vendors, or suppliers. Such non-discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination. Further, Consultant shall provide equal opportunity for subcontractors to participate in subcontracting opportunities.

5.20 Labor Certification. By its signature hereunder, Consultant certifies that it is aware of the provisions of Section 3700 of the California Labor Code which requires every employer to be insured against liability for Workers’ Compensation, or to undertake self- insurance in accordance with the provisions of that Code, and agrees to comply with such provisions before commencing the performance of the Services.

5.21 Authority to Enter Agreement. Consultant has all requisite power and authority to conduct its business and to execute, deliver, and perform the Agreement. Each Party warrants that the individuals who have signed this Agreement have the legal power, right, and authority to make 14 this Agreement and bind each respective Party.

5.22 Counterparts. This Agreement may be signed in counterparts, each of which shall constitute an original.

5.23 Subcontracting. Consultant shall not subcontract any portion of the work required by this Agreement, except as expressly stated herein, without prior written approval of SDCP.

Subcontracts, if any, shall contain a provision making them subject to all provisions stipulated in this Agreement.
[SIGNATURES ON FOLLOWING PAGE]
15 SIGNATURE PAGE TO

SAN DIEGO COMMUNITY POWER

PROFESSIONAL SERVICES AGREEMENT
IN WITNESS WHEREOF, the Parties have made and executed this Agreement as of the date first written above.

SAN DIEGO COMMUNITY POWER
By:

Name: Karin Burns
Title: CEO

CHANDLER ASSET MANAGEMENT
By:

Name: Nicole Dragoo
Title: Chief Executive Officer
ATTEST:
_________________________________
Secretary, SDCP Board of Directors
APPROVED AS TO FORM:
_________________________________
SDCP General Counsel
55682.00001\32661854.2 Exhibit A

EXHIBIT A

SCOPE OF SERVICES
Chandler Asset Management, Inc. (“Chandler”) has both the expertise and bandwidth to perform each of the required duties specified in this Agreement as well as additional special services as requested.

1. Client Onboarding and implementation

2. Develop and implement an investment strategy that is aligned with SDCP's Investment Policy.

Chandler will provide full-time discretionary investment management services for SDCP and will develop objectives and constraints for each portfolio through a collaborative process with your staff, including:

A. Reviewing SDCP’s Investment Policy
At the inception of the Agreement, Chandler’s investment team will review SDCP’s current investment policy and provide guidance on strategies and relevant compliance considerations, including:
• Scope of the policy that defines which funds are covered; • Investment objectives that clearly define how to attain safety, liquidity, and return;
• Standard of care;
• Delegation of authority;
• Ethics and conflicts of interest;
• Authorized investments;
• Management of market and credit risk;
• Safekeeping and custody of securities;
• Reporting requirements; and
• Performance standards
Chandler conducted an initial review of SDCP’s Investment Policy and made the following recommendations:
• Update the acceptable investment types to align with California Government Code.
o SDCP could expand their portfolio to include medium-term notes, pass-through securities, municipal securities and/or supranationals. • Enhance risk management by adding a limitation to callable bonds, updating language on qualified institutional buyers (QIBs), and detailing the maximum allocation for each acceptable investment in the portfolio. • Update language of prohibited investments to incorporate a September 2022 55682.00001\32661854.2 Exhibit A
change to California Government Code, which limits the purchase of a security with a settlement date greater than 45 days (SB 1489).
• Provide a market benchmark for performance evaluation to be included in the annual report.

B. Chandler will assist SDCP’s staff prepare to share findings and recommendations with stakeholders.

This review would be conducted annually and include suggestions to reflect the latest changes to California Government Code, as well as incorporate your objectives and cash flow needs that may change over time.

C. Developing an Approach to Socially Responsible Investing (SRI) and Environmental, Social and Governance (ESG) Practices
Chandler will work with SDCP staff to integrate sustainable investment guidelines into SDCP’s portfolio as needed. This service includes:
• Advising on SRI language designed to exclude specific sectors of the market, such as gas & oil, tobacco/alcohol, and/or firearms;
• Ongoing consideration / analysis of ESG characteristics within Chandler’s overall issuer selection process prior to purchasing a security for inclusion within your portfolio;
• Identifying and taking action when investments deviate from the organization’s SRI and/ or ESG objectives;
• Monitoring and testing SRI compliance pre and post trade using Chandler’s extensive multi-level compliance system; and
• Reporting on SRI compliance in monthly and quarterly reports D. Conducting a Cash Flow Analysis.

Chandler will conduct a statistical analysis of SDCP’s use of cash and incorporate any known budgetary events to project future balances and quantify liquidity needs, as well as identify any opportunities to optimize its investments through an investment program allocation to longer duration strategies.

As SDCP continues to grow, it may have even more funds to optimize between its liquid and core portfolios, and we would revisit our cash flow analysis and forecasts frequently to confirm that the portfolio is structured to enhance returns.

E. Establishing an Appropriate Performance Benchmark.

In line with an overarching investment strategy Chandler will identify an appropriate benchmark to measure portfolio outcomes. The benchmark will reflect the actual securities being purchased and the risks undertaken and should have a similar weighted average maturity and credit profile as the portfolio.
55682.00001\32661854.2 Exhibit A

3. Ensure preservation of principal.

Chandler will manage SDCP’s investment portfolio comprised of asset classes in the U.S. fixed income universe that align with SDCP’s objectives of safety, liquidity, and return and as permitted by California Government Code 53601 and 53635.

Chandler will reduce exposure to market risk by diversifying the portfolio by issuer and security type, and by establishing and maintaining a target portfolio duration that is consistent with SDCP’s risk profile and investment objectives. Additionally, Chandler will employ an in-house, proprietary credit research process with the objective of identifying stable and improving credits to include in client portfolios.

4. Manage funds in accordance with “Prudent Investor Standard” pursuant to California Government Code Section 53600.3

5. Attain a market rate of return throughout the economic cycle while considering investment risk and liquidity constraints.

6. Monitor and manage the risks in conformance with the internal controls associated with SDCP's investment portfolio.

7. Provide SDCP with regular reports on the performance of the investment portfolio & Access to the Chandler Client Portal, Clearwater Analytics.

Monthly Statement – Chandler will provide monthly portfolio accounting and performance statements. Each monthly report begins with a one-page management summary of portfolio characteristics that provides an excellent overview of the portfolio, including performance relative to your selected benchmark(s), followed by a statement of compliance. A detailed asset listing, including cost, book, and market values, a transaction ledger, an earned interest report, and a cash flow report follow the summary page. The delivery of these reports will be provided on the 3rd business day of the month following month end.

Quarterly Reports – Chandler will provide quarterly investment reports in a format designed to facilitate discussion between our investment professionals and SDCP. The reports present portfolio characteristics, return, and compliance using graphs, charts, and illustrations in a format that is effective for your financial staff, Board of Directors, and additional stakeholders.

Annual Reports – Chandler will provide a GASB 40 report which provides the information needed to prepare the required fiscal year-end portfolio risk assessment, and will assist SDCP in drafting the narratives for GASB notes and financial notes included in SDCP’s Comprehensive Annual Financial Report. A GASB 72 report will be made available by fiscal year-end.
55682.00001\32661854.2 Exhibit A

8. Meet with SDCP Regularly to Discuss Investment Performance and Strategy Chandler will facilitate regular Quarterly or Monthly meetings, determined jointly by Chandler and SDCP, to address your governing body per your requirements.

9. Provide Special Financial Services as Requested by SDCP Key tasks are as follows; other special financial services can be accommodated at SDCP’s request:

Exhibit B

EXHIBIT B

ADDITIONAL TERMS

SPECIFIC TO INVESTMENT MANAGEMENT RELATIONSHIP

1. Investment Policy. In investing and reinvesting SDCP’s assets, Consultant shall comply with SDCP’s Investment Policy, which is located on SDCP’s website at the following hyperlink: https://sdcommunitypower.org/key-documents/.

2. Authority of Consultant. Consultant is hereby granted full discretion to invest and reinvest all assets under its management in any type of security it deems appropriate, subject to the instructions given or guidelines set by Representative.

3. Proxy Voting. Consultant will vote proxies on behalf of SDCP unless otherwise instructed. Consultant has adopted and implemented written policies and procedures and will provide SDCP with a description of the proxy voting procedures upon request.

Consultant will provide information regarding how SDCP proxies were voted upon request. To request proxy policies or other information, please contact us by mail at the address provided, by calling 800-317-4747 or by emailing your request to [email protected].

4. Custody of Securities and Funds. Consultant shall not have custody or possession of the funds or securities that SDCP has placed under its management. SDCP shall appoint a custodian to take and have possession of its assets. SDCP recognizes the importance of comparing statements received from the appointed custodian to statements received from Consultant. SDCP recognizes that the fees expressed above do not include fees SDCP will incur for custodial services.

5. Valuation. Consultant will value securities held in portfolios managed by Consultant no less than monthly. Securities or investments in the portfolio will be valued in a manner determined in good faith by Consultant to reflect fair market value.

6. Investment Advice. SDCP recognizes that the opinions, recommendations and actions of Consultant will be based on information deemed by it to be reliable, but not guaranteed to or by it. Provided that Consultant acts in good faith, SDCP agrees that Consultant will not in any way be liable for any error in judgment or for any act or omission, except as may otherwise be provided for under the Federal Securities laws or other applicable laws.

7. Payment of Commissions. Consultant may place buy and sell orders with or through such brokers or dealers as it may select. It is the policy and practice of Consultant to strive for the best price and execution and for commission and discounts which are competitive in relation to the value of the transaction and which comply with Section 28(e) of the Securities and Exchange Act. Nevertheless, it is understood that Consultant may pay a commission on transactions in excess of the amount another broker or dealer may charge, and that Consultant makes no warranty or representation regarding commissions paid on transactions hereunder.

Exhibit B

8. Other Clients. It is further understood that Consultant may be acting in a similar capacity for other institutional and individual clients, and that investments and reinvestments for SDCP's portfolio may differ from those made or recommended with respect to other accounts and clients even though the investment objectives may be the same or similar.

Accordingly, it is agreed that Consultant will have no obligation to purchase or sell for SDCP's account any securities which it may purchase or sell for other clients.

9. Receipt of Brochure and Privacy Policy. SDCP hereby acknowledges receipt of the disclosure statement or "brochure" and “brochure supplement” also known as Part 2A and Part 2B of Form ADV, required to be delivered pursuant to Rule 204-3 of the Investment Advisers Act of 1940 (Brochure). SDCP further acknowledges receipt of Consultant’s Privacy Policy, as required by Regulation S-P.

Exhibit C

EXHIBIT C
Fee Schedule for Advisory Services
Chandler will provide investment advisory services in accordance with the following fee schedule:

Fees will be charged monthly in arrears and can be debited directly from your third-party custody account. The proposed fee schedule is all-inclusive for the services that Chandler provides, including technological resources, onboarding and implementation, online access to the Chandler Client Portal, comprehensive reporting, and meetings, as well as the investment management and treasury management support services described herein.

This fee schedule does not include charges that SDCP would incur for third party custodial services.

SAN DIEGO COMMUNITY POWER
Staff Report – Item 11
-------------------------------------------------------------------------------------------------------------------- To: San Diego Community Board of Directors
From: Xiomalys Crespo, Community Engagement Manager
Via: Karin Burns, Chief Executive Officer
Subject: Approval of 2024 Community Advisory Committee (CAC) Work Plan Date: February 22, 2024
--------------------------------------------------------------------------------------------------------------------

RECOMMENDATION
Approve the 2024 Community Advisory Committee (CAC) Work Plan.

BACKGROUND
Per Section 5.10.3 of the San Diego Community Power (SDCP) Joint Powers Authority (JPA) Agreement:

As part of the CAC Scope of Work that was amended by the Board of Directors at the August 2021 regular meeting: “the Community Advisory Committee will, under the direction of the SDCP Board of Directors and authorized SDCP staff... [a]dopt a work plan at the start of every fiscal year that aligns with the CAC Scope provided by the Board.” In anticipating the process, and concurrent with revisions to the CAC Fiscal Year 2022- 2023 Work Plan, staff worked with members to revise the CAC Scope of Work, which was approved by the Board during its January 18, 2024 meeting, to change the time frame of the CAC Work Plan from fiscal years to calendar years. Staff leveraged the formation of the Community & Equity Ad-Hoc Committee to discuss the upcoming work plan.

ANALYSIS AND DISCUSSION
Proposed changes to the current workplan include: clarifying strategies under each focus to better track progress and outcomes; specifying proposed educational presentations; defining information-sharing protocols to activate member advocacy; deleting redundant areas of focus; updating areas of focus to reflect status of implementation; and adding Civic Engagement and Participation as an area of focus to explore and develop ways to increase participation at CAC meetings, leverage CAC members’ networks, and foster CAC member turnover resiliency.

COMITTEE REVIEW
The CAC approved the adoption of the 2024 CAC Work Plan as drafted during its February 8, 2024 regular meeting.

FISCAL IMPACT
There is no fiscal impact associated with this update.

ATTACHMENTS
Attachment A: Draft 2024 Community Advisory Committee (CAC) Work Plan Community Advisory Committee
2024 Work Plan (DRAFT)
Focus Description Outcomes
Equity Overview Prioritize justice, equity, diversity,
and inclusion by working with the
SDCP Board and Staff.

Ensure that the CAC provides input from an equity perspective on the tasks brought before them by revising CAC key documents and SDCP policies and procedures brought before the CAC to ensure they promote equity.

CAC Educational
Presentations
CAC members may invite and
hold educational presentations to
the wider CAC to assist in
ongoing support to SDCP staff
and the Board to achieve the
mission, vision, core values, and
goals of the agency.

Ensure CAC is knowledgeable of SDCP operations as well as external issues which may affect the organization, which may include:
• SDCP Orientation Training
• Battery Storage: Why is it important?
• Distributed Energy Resources
• Advancements in Geothermal Energy
• California Community Choice Association
• Finance & Rate Setting Process
Legislative /
Public Policy /
Regulatory
Bring forth news and advise the
Board of legislative, public policy
and regulatory issues that are
brought forward by SDCP and/or
identified by the SDCP Board as
a priority. Make public comments
at public meetings supporting
SDCP positions on these issues.
• Anticipate issues that may come up to SDCP by utilizing the CAC’s connections to the community;
• Clarify strategies and information-sharing protocols to activate advocacy, with the CAC Secretary and SDCP Staff determining and sharing time-sensitive developments to organize support from CAC members and their networks. • Make possible public comments and/or letters of support on issues if provided with talking points by SDCP staff.
• Receive Legislative Session 101 Training and Quarterly Presentations on Legislative and Regulatory Activity.

Focus Description Outcomes
Energy Bid
Evaluation
Criteria
Support and monitor the
implementation of the revised
Energy Bid Evaluation Criteria.

Support staff in monitoring the Energy Bid Evaluation Criteria and overall Power Procurement Efforts by receiving quarterly reports on its implementation and functioning.

Marketing and
Communications
Efforts
Support strategic outreach efforts
to the community, including
events, marketing,
communication, and other
activities.

Support SDCP staff in the strategic marketing and communication of agency activities to dispel inaccurate information by:
• Receiving Community-Member Communications Guide & Tool Kit Training • Volunteering at SDCP outreach events and workshops
• Promoting SDCP Programs
Community
Power Plan
Implementation
Assist staff in the implementation
of the Community Power Plan,
which informs what SDCP’s long-term programmatic and local procurement outlook will be.

Ensure community input continues to be key in the development and implementation of CPP programs by:
• Approving the creation of a Programs-specific body of the CAC • Receive quarterly updates and/or staff reports on pilot projects/CPP implementation at large
• Supporting workshops with member agencies to increase community engagement on CPP programmatic adoption including:
o Solar for Our Communities
o Regional Energy Network
o Solar and Battery Storage Incentives
Civic
Engagement &
Participation
Explore and develop ways to
increase participation at CAC
meetings, leverage CAC
members’ networks, and create
an SDCP CAC member and
volunteer recruitment pipeline.

Increase interest and awareness of SDCP programming; community involvement in the organization’s mission, vision, and goals; CAC turnover resiliency by:
• Assisting in the development of social media content explaining the importance of the CAC;
• Facilitating a CAC Member Network and Affiliations Workshop; • Connecting SDCP staff to volunteering and fellowship programs to expand outreach capacity; and
• Introducing members of the community to SDCP publicly noticed meetings and staff and member agency programming/elected staff.

The CAC shall cover these tasks year-round, and other tasks not mentioned above with prior approval of SDCP staff but within the purview of the Scope of Work. All tasks shall be presented and acted upon in a manner that complies with the Ralph M. Brown Act.

SAN DIEGO COMMUNITY POWER
Staff Report – Item 12
--------------------------------------------------------------------------------------------------------------------- To: San Diego Community Power Board of Directors
From: Alyson Scurlock, Senior Program Associate
Colin Santulli, Director of Programs
Via: Karin Burns, Chief Executive Officer
Subject: Approve the Community Clean Energy Grant Program Policy Date: February 22, 2024
---------------------------------------------------------------------------------------------------------------------

RECOMMENDATION
Approve the Community Clean Energy Grant Program Policy to supersede the Community Grant Program Policy previously approved in December 2022.

BACKGROUND
SDCP’s Community Clean Energy Grant Program Policy (“Policy”) aims to support local clean energy projects and programs that provide economic, environmental, and health benefits to SDCP’s communities. At the December 2022 Board of Directors (“Board”) meeting, SDCP’s Board approved the Community Grant Program Policy (“Previous Policy”), and in March 2023, SDCP launched the inaugural Fiscal Year (“FY”) 2022-23 program. Grant awards were provided to 10 organizations in June 2023 and grant reporting for the first round of awardees is anticipated to conclude in June 2024.

With the inaugural FY 2022-23 program underway, Staff began planning for the FY 2023- 24 program. In August 2023, SDCP ran a competitive bidding process to establish ongoing program administration support. San Diego Foundation (“SDF”) was selected to serve as the program administrator for SDCP’s Community Grant Program until FY 2025- 26 based on their demonstrated expertise supporting similar grant programs locally, established relationships with community-based organizations/nonprofits, and experience securing additional funding to support program budgets. SDF’s mission is to inspire enduring philanthropy and enable community solutions to improve the quality of life in the San Diego region.

ANALYSIS AND DISCUSSION
Over the last few months, Staff have worked with SDF to develop the FY 2023-24 program guidelines in preparation for the anticipated program launch in late February 2024. Based on learnings from the FY 2022-23 program, Staff made the below adjustments to the Previous Policy.

Grant Focus Areas
To ensure that grant funds meet the needs, goals, and priorities of SDCP’s communities, the initial grant focus areas were informed by the community needs assessment conducted as part of SDCP’s Community Power Plan. SDF and SDCP Staff evaluated the FY 2022-23 grant focus areas and found that some of them had overlapping similarities (i.e., “energy behaviors and/or education that reduce energy consumption and/or costs” was similar to “increased overall energy literacy of SDCP customers” and projects/programs that “increase access to the benefits of clean energy technologies” could fall within all the focus areas). To distinguish the focus areas further, SDF and SDCP Staff merged these categories and added a new category to specifically emphasize energy focused educational programming for youth. The addition of this category aligns with another goal identified in the Community Power Plan—energy awareness and educational programming for youth—and could expand the Community Grant Program’s reach to include organizations that do educational programming but not necessarily in the clean energy space.

Evaluation Committee
SDCP’s Conflict of Interest and Ethical Conduct Policy was approved at the December 2023 Board meeting. Since many of SDCP’s Community Advisory Committee (“CAC”) members are affiliated/connected with community-based organizations, some of which may apply to the Community Grant Program, Staff revised the Previous Policy to not include CAC members as part of the evaluation committee. Instead, Staff solicited feedback on the FY 2023-24 program at the November 2023 and February 2024 CAC meetings and during a Community Grants Ad Hoc meeting in January 2024.

Evaluation Criteria
SDF and SDCP Staff analyzed how the initial evaluation criteria was applied to the FY 2022-23 program applications and sought areas where the criteria could be refined to improve the application review process. Adjustments to the evaluation criteria include generalizing the criterion titles, providing more detailed descriptions for each criterion, updating the grant focus areas, changing the “Innovation” criteria to “Impact and Growth”, and incorporating the “Scalability and Replicability” criteria into the new “Impact and Growth” criteria.

Grant Timeline
Grant sizes for the FY 2023-24 program will increase due to the program budget being larger than the FY 2022-23 program. In the Policy, Staff propose to extend the grant timeline to 24 months (previously 12 months) to account for the larger grant sizes. This more equitable approach will allow organizations additional time to ramp up their projects and for SDCP to make a deeper impact with the communities in which grantees are working.

Program Name
The Policy proposes a more simplified program name of “Community Clean Energy Grant Program”. This adjustment will reflect the intent of the program which is to fund new and existing projects/programs (not only innovative ones).

NEXT STEPS
Pending Board approval of the Policy, Staff will continue to prepare application and promotional outreach materials for the next grant cycle that incorporates the adjustments to the Previous Policy. Staff are targeting to launch the FY 2023-24 grant cycle on February 26, 2024. The FY 2023-24 program currently has an approved budget of $500,000, however, upwards of $1,000,000 is anticipated to be awarded thanks to Calpine Energy Solutions (SDCP’s back-office provider) contributing funding as part of their Professional Services Agreement with SDCP. SDF is also seeking additional funding sources as part of their program administration contract. Grant awards are anticipated to be provided to organizations in June 2024, with grant sizes ranging from $25,000 to $100,000.

FISCAL IMPACT
SDCP’s Board-approved FY 2023-24 budget includes $500,000 for the FY 2023-24 Community Grant Program. The Policy will not impose any additional fiscal impacts.

ATTACHMENTS
Community Clean Energy Grant Program Policy
SDCP Community Clean Energy Grant Program Policy 1
Policy Title Community Clean Energy Grant Program Policy Effective Date 2/22/2024
Community Clean Energy Grant Program Policy
A. PURPOSE
The purpose of this Community Clean Energy Grant Program Policy (“Policy”) is to provide authority to the San Diego Community Power (“SDCP”) Chief Executive Officer (“CEO”), or designee, to design and approve the Community Clean Energy Grant Program (“Program”) guidelines, implement the Program, develop and execute required contracts and grant agreements, and make minor modifications to the guidelines, where necessary.

B. PROGRAM GOALS
The Program aims to support local clean energy projects and programs that provide economic, environmental, and health benefits to SDCP’s communities. Program funded activities are expected to advance one or more of the following focus areas:
• Increasing overall energy literacy of SDCP customers. • Energy focused educational programming that encourages clean energy use, particularly for youth.
• Improvements in indoor and/or outdoor air quality related to electrification. • Workforce development opportunities that support careers in the clean energy industry.
• Improved energy resilience to ensure communities can avoid, prepare for, minimize, adapt to, and recover from energy disruptions.

C. PROGRAM STRUCTURE AND PROCESS
The following sections outline the overall Program structure and process. SDCP staff will inform the SDCP Board of Directors (“Board”) upon finalization of the detailed structure and process in a final Program guidelines document.

Eligibility
Applicants must be a nonprofit with 501(c)(3) public charity status serving SDCP customers. A 501(c)(3) public charity may serve as a fiscal sponsor for another applicant to administer the grant and provide required grant reporting.

Evaluation Committee
The CEO, or designee, will establish a committee to review and score grant applications based on the evaluation criteria outlined below. The committee will include SDCP staff SDCP Community Clean Energy Grant Program Policy 2
and may include staff from a program administrator, should one be hired to support SDCP staff in the administration of the Program, and Program partners.

Evaluation Criteria
The application evaluation criteria will be structured based on the categories outlined below. Application of the criteria will be articulated in the final Program guidelines. In the circumstance where applications have an equal evaluation score, the evaluation committee will prioritize selection of projects across a diversity of the program focus areas.

Criteria Description
Funding Priority
Alignment and
Project Design
Project/program is designed to meet community needs while advancing one or more of the following focus areas:
• Increasing overall energy literacy of SDCP customers. • Energy focused educational programming that encourages clean energy use, particularly for youth.
• Improvements in indoor and/or outdoor air quality related to electrification.
• Workforce development opportunities that support careers in the clean energy industry.
• Improved energy resilience to ensure communities can avoid, prepare for, minimize, adapt to, and recover from energy disruptions.

Feasibility Application demonstrates having the staffing capability, timing, partnerships, and applicable skills to successfully implement the project/program. Budget is within the allowable grant range and is reasonable for the project/program’s scope.

Communities Served Project/program demonstrates a comprehensive understanding of the population to be served and focuses on Communities of Concern in SDCP’s service territory.

Impact and Growth Project/program is impactful with the potential to be replicated and/or expanded to other communities in SDCP’s service territory.

Reporting Requirements
Contractors and grantees will provide final reports to SDCP summarizing project outcomes and other project metrics as defined in an executed contract or grant agreement with SDCP or the program administrator.

Timeline
SDCP Community Clean Energy Grant Program Policy 3
Awarded funds will be expended by contractors and grantees no later than 24 months from award date, unless written authorization is provided by the CEO or designee to extend the deadline.

Compliance with Applicable Laws
Contractors and grantees will be required to comply with all applicable federal, state, and local laws, rules, and regulations, which may include provisions of the California Labor Code relating to the payment of prevailing wages and the performance of other requirements on certain public works and maintenance projects.

D. GRANT FUNDING
This Policy does not explicitly authorize procurement by SDCP as the related Program does not purchase a good or service, with the exception of a potential program administrator to support the distribution of grant funds. All Program-related expenditures will comply with the SDCP Board-approved procurement policy.

Individual grant or contract amounts shall not exceed 15% of total annual approved Program budget. Staff will inform the Board of any disbursements related to the Program.

E. TERRITORY
SDCP’s service area.

F. AUTHORITY DELEGATION
This Policy authorizes the CEO, or designee, to design and approve the Program guidelines, implement the Program, develop and execute required contracts and grant agreements (in consultation with General Counsel), and make minor modifications to the guidelines, where necessary.

POLICY HISTORY
12/15/2022 (Original Approval of Community Grant Program Policy)

SAN DIEGO COMMUNITY POWER
Staff Report – Item 13
--------------------------------------------------------------------------------------------------------------------- To: San Diego Community Power Board of Directors
From: Byron Vosburg, Managing Director, Power Services; and Andrea Torres, Sr. Portfolio Manager, Power Services

Via: Karin Burns, Chief Executive Officer
Subject: Approval of Ascend Analytics Pilot Extension Agreement for PowerSIMM Pilot Support Services through July 31, 2024
Date: February 22, 2024
--------------------------------------------------------------------------------------------------------------------

RECOMMENDATION
Approve the Ascend Analytics Pilot Extension Agreement to extend San Diego Community Power’s (SDCP) utilization of Ascend Analytics’ PowerSimm portfolio management platform and ad-hoc analysis services.

BACKGROUND
In preparation for SDCP’s 2023 Standalone Storage RFO issued in April 2023, SDCP reached out to five vendors to receive quotes for bid analysis services. After confirming which vendors offered the scope SDCP was interested in, three vendors provided bids including Ascend Analytics, cQuant, and ZGlobal. SDCP evaluated each provider and selected Ascend Analytics based on competitive pricing and their scope of services. The scope included pilot access to Ascend’s PowerSimm portfolio management platform.

SDCP contracted with Ascend Analytics (Ascend) on the RFO evaluation and PowerSimm pilot on April 5, 2023. An amendment to extend the initial pilot was executed on October 31, 2023 as approved by the Board of Directors on October 26, 2023, which included an option to extend on a month-for-month basis at a rate of $10,000/month. Now that SDCP has issued an RFP for energy trading and risk management (ETRM) services as well as other portfolio management platform services and SDCP has set a schedule for contracting for such services, SDCP requests utilization of the $10,000/month extension through July 31, 2024, which is the approximate timeframe SDCP expects to have selected a vendor for a longer-term contract for a similar scope of services.

ANALYSIS AND DISCUSSION
Staff recommends executing this additional Ascend Analytics Pilot Extension Agreement to allow SDCP to continue to use and Ascend Analytics’s PowerSimm’s portfolio management capability until similar services can be contracted under a longer-term agreement sourced through SDCP’s RFP, which is currently underway. The pilot extension services include modeling of SDCP’s load, hedging and generation contracts, as well as ad-hoc analysis to assist with Power Services’ negotiations for future contracts.

FISCAL IMPACT
The cost of this Pilot Extension Agreement through July 31, 2024 is $70,000.

ATTACHMENTS
A. Ascend Analytics Pilot Extension Agreement through July 31, 2024 1877 Broadway, Suite 706, Boulder, CO 80302 | 303 415 1400 | ascendanalytics.com San Diego Community Power
PowerSIMM Pilot
7 Month Extension Agreement
(July 31, 2024)
January 23, 2024
A s c e n d A n a l y t i c s | A n a l y t i c s t o P o w e r t h e E n e r g y T r a n s i t i o n 1 Contents

1. Project Description............................................................................................................................... 2

1.1 Pilot Extension through December 31, 2023............................................................................................................ 2

1.2 Item 2: Consultative Risk Assessment for forward periods 2023 Through 2028 ..................................................... 3

1.3 Item 3: PowerSIMM SaaS Solution (with Ascend Market Intelligence) .................................................................... 3

1.4 Item 4: ‘+Service’ Ongoing Collaborative and Consultative Support........................................................................ 4

1.5 Reporting Output: Value, Positions & at-Risk Metrics.............................................................................................. 4

1.6 Ascend Platform Service Price .................................................................................................................................. 6

1.7 Delivery Schedule on Portfolio Valuation................................................................................................................. 7

2. Appendix A: Ascend Approach & Market Intelligence ......................................................................... 9

3. Appendix B: Platform Description...................................................................................................... 10

4. Appendix C: Validation Criteria for PowerSIMM Implementation..................................................... 12

5. Appendix D: Ascend Staffing .............................................................................................................. 14

6. Appendix E: I – ISO Reports and Hub Price Forecasts........................................................................ 15

7. APPENDIX F: PowerSIMM SaaS License Agreement General Terms and Conditions......................... 16 A s c e n d A n a l y t i c s | A n a l y t i c s t o P o w e r t h e E n e r g y T r a n s i t i o n 2

1. Project Description

1.1 PILOT EXTENSION THROUGH JULY 31, 2024
Ascend is pleased to permit San Diego Community Power to enjoy PowerSIMM and relevant works developed through the initial Pilot Period as per the terms of this agreement.

Duration: 7 months (July 31, 2024)
Users: 4 active PowerSIMM users
Benefits/Scope: Portfolio analysis of future cash flows and optimization of hedge contracts to mitigate the uncertainty in these cash flows across a 5-year horizon of SDCP’s portfolio in Ascend’s PowerSIMM framework involving:
• Set-up and configuration for CAISO modeling
• SDCP’s portfolio and prospective transactions
• Portfolio Management reporting
• What-if scenario analysis with RFO projects
Intro Period Cost: $70,0001(Pilot Extension)
Support Includes: 100 hours of support credit (unused hours may be added to a full license term) Markets Covered: CAISO; including update to Ascend Market Intelligence CAISO 4.2 Release Resource Types: Load, Renewable PPAs & Transactions
Transaction Types: Hedge instruments and spot market purchases/sales Study Durations: 2023-2044, 100 iteration stochastic studies Reporting: PowerCube via Excel, PowerSIMM PowerBI Embedded Reports 1 Pilot Extension invoiced in full upon execution of agreement and inclusive of 100 hours of Ascend staff support. Ascend may request SDCP’s pre-approval for purchase of additional support in the event SDCP requires support in excess of 100 hours.

A s c e n d A n a l y t i c s | A n a l y t i c s t o P o w e r t h e E n e r g y T r a n s i t i o n 3

1.2 ITEM 2: FINAL DELIVERY OF CONSULTATIVE RISK ASSESSMENT FOR FORWARD PERIODS 2023 THROUGH 2028
Ascend will complete the originally scoped risk assessment pending SDCP provision of outstanding document Q&A for formation of observations and recommendations.

Figure 1. Example Stochastic Retail Portfolio Analysis Identification of an Optimal Portfolio

1.3 ITEM 3: POWERSIMM SAAS SOLUTION (WITH ASCEND MARKET

INTELLIGENCE)
Ascend will use the pilot efforts in Item 2 to provide SDCP a full PowerSIMM SaaS production environment solution for (a) portfolio management and (b) resource planning (see Figure 3). Ascend will extend three user accounts for PowerSIMM with the ability to change portfolios, run ad hoc studies, perform retail price structuring, and hedge analysis, monitor market price impacts, and measure the portfolio changes. PowerSIMM will provide SDCP with the ability to extend its risk management operations to include robust stochastic analysis. Ascend will include (c) Ascend Market Intelligence fundamentals for changing market dynamics and long-term CAISO fundamentals as part of the SaaS Solution and accompanied by semi-annual CAISO Market Intelligence written reports (see Appendix A).

Figure 2. PowerSIMM V New User Interface
A s c e n d A n a l y t i c s | A n a l y t i c s t o P o w e r t h e E n e r g y T r a n s i t i o n 4 Figure 3. PowerSIMM Modeling Framework

1.4 ITEM 4: ‘+SERVICE’ ONGOING COLLABORATIVE AND CONSULTATIVE

SUPPORT
A full PowerSIMM license will include 500 to 1,500+ hours per year (subject to scoping) of subject matter expert and analyst time for assistance with model runs, weekly reporting, risk consulting, IRPs, and/or other related activity each year. This ‘+Service’ level arrangement allows SDCP to draw on Ascend to augment its team with extra support in the portfolio risk management and resource planning disciplines. Ascend views this level of service as a distinct way to collaboratively partner with SDCP.

1.5 REPORTING OUTPUT: VALUE, POSITIONS & AT-RISK METRICS Ascend will deliver standard PowerCube output in .xls format with summarized portfolio performance, financial risk metrics and positions across the stochastic simulation set. These metrics will contemplate the value of the supply power at hourly LMP energy prices from each price location. The expected portfolio value will be the mean of the simulation result by month. Further statistical at-risk metrics will provide the uncertainty as the mean result less the 5th percentile, also known as Gross Margin @ Risk, an industry best practice flow metric. Ascend will produce flexible output in a similar fashion to Figures 5 and 6 below. This sort of model output analysis tool will allow for portfolio alterations and hypothetical hedges for what-if analysis.

A s c e n d A n a l y t i c s | A n a l y t i c s t o P o w e r t h e E n e r g y T r a n s i t i o n 5 Figure 4. Example Portfolio Risk Metric Reporting from PowerSIMM Output Figure 5. Example Position Reports & Cost at Risk
[2020]
Load Renewable & Battery
Current Hedges
Total Net Position
Current Hedge %
Optimal Forward HedgeOptimal Adjusted Position
Optimal Hedge %
Load Renewable & Battery
Current Hedges
Total Net Position
Current Hedge %
Optimal Forward HedgeOptimal Adjusted Position
Optimal Hedge %
Load Renewable & Battery
Current HedgesTotal Net PositionCurrent Hedge %
Optimal Forward HedgeOptimal Adjusted Position
Optimal Hedge % Mean Margin Unhedged GM@RCurrent GM@R
GM@R after Optimal Forward Hedge
Current Return | Risk Ratio
Optimal Return | Risk Ratio
[BFY 2022] (240) 141 137 (16) 106% 4 (12) 117% (264) 165 130 (32) 112% 9 (24) 115% (209) 111 145 5 123% (1) 4 122% $63.0 $14.131 $2.163 $1.250 29.1 50.4 [FY 2023] (239) 162 85 (53) 93% 12 (42) 108% (262) 199 73 (65) 104% 14 (51) 109% (209) 114 100 (38) 102% 5 (34) 104% $80.0 $29.484 $7.318 $1.481 10.9 54.0 [FY 2024] (240) 221 36 (66) 97% 16 (50) 114% (264) 289 32 (51) 122% 13 (38) 127% (211) 134 41 (85) 83% 10 (75) 88% $76.4 $38.581 $10.106 $2.246 7.6 34.0 [FY 2025] (242) 222 6 (97) 84% 23 (74) 104% (266) 287 6 (80) 110% 19 (61) 118% (212) 138 6 (119) 68% 14 (105) 75% $76.8 $42.621 $19.340 $2.297 4.0 33.4 [FY 2026] (243) 221 4 (105) 83% 24 (80) 103% (267) 286 78 (88) 136% 20 (68) 144% (212) 137 122 (127) 122% 15 300 129% $74.6 $30.690 $15.105 $2.061 4.9 36.2 0 0 0
[2022-06] (251) 154 127 (28) 102% 6 (22) 114% (277) 182 118 (46) 108% 11 (35) 112% (216) 117 140 (3) 119% (1) (4) 118% $13.9 $2.391 $0.800 $0.686 17.4 20.3 [2022-07] (252) 150 143 (15) 106% 4 (11) 118% (281) 178 136 (33) 112% 10 (24) 115% (219) 118 151 6 123% (1) 5 122% $12.2 $3.497 $0.542 $0.325 22.6 37.6 [2022-08] (261) 148 149 (19) 104% 4 (16) 115% (289) 175 143 (36) 110% 7 (29) 113% (221) 110 156 4 120% (1) 3 120% $11.4 $4.340 $0.490 $0.279 23.3 40.9 [2022-09] (252) 155 147 (9) 109% 2 (7) 120% (279) 186 140 (23) 117% 5 (18) 118% (219) 116 154 8 124% (1) 7 123% $11.1 $3.501 $0.390 $0.315 28.5 35.2 [2022-10] (234) 144 141 (3) 112% 2 (1) 123% (257) 169 138 (14) 119% 6 (9) 121% (203) 113 145 12 127% (1) 11 126% $6.6 $2.830 $0.279 $0.185 23.7 35.6 [2022-11] (235) 131 153 (0) 111% 0 0 121% (257) 148 155 (9) 118% 3 (7) 119% (206) 109 150 11 125% (1) 10 125% $6.3 $2.789 $0.195 $0.152 32.1 41.3 [2022-12] (243) 132 158 (2) 110% 0 (2) 120% (264) 148 163 (9) 118% 2 (8) 118% (216) 112 153 7 123% (1) 6 122% $6.9 $3.492 $0.181 $0.170 37.9 40.3 [2023-01] (237) 100 91 (84) 71% 18 (66) 88% (259) 118 85 (101) 78% 19 (82) 86% (211) 79 98 (64) 84% 8 (56) 88% $2.6 $3.798 $1.294 $0.192 2.0 13.3 [2023-02] (233) 115 80 (82) 74% 18 (64) 91% (258) 138 70 (102) 81% 19 (83) 88% (201) 85 93 (55) 88% 8 (47) 92% $2.8 $3.784 $1.257 $0.191 2.2 14.8 [2023-03] (224) 139 60 (77) 79% 17 (60) 97% (242) 172 43 (92) 89% 21 (71) 97% (199) 94 85 (56) 90% 6 (50) 93% $3.0 $3.748 $1.300 $0.177 2.3 16.8 [2023-04] (221) 168 52 (64) 89% 15 (50) 106% (241) 206 38 (75) 101% 17 (58) 108% (196) 120 70 (51) 97% 6 (45) 100% $3.7 $2.256 $0.815 $0.203 4.6 18.4 [2023-05] (225) 178 51 (63) 91% 15 (48) 108% (243) 216 38 (71) 104% 17 (54) 111% (202) 130 68 (54) 97% 7 (47) 101% $4.0 $1.745 $0.717 $0.195 5.6 20.7 [2023-06] (251) 205 55 (67) 94% 19 (49) 111% (277) 256 38 (79) 106% 25 (54) 115% (215) 135 80 (51) 100% 5 (46) 102% $11.2 $2.988 $1.051 $0.636 10.6 17.5 [2023-07] (252) 220 56 (59) 99% 11 (48) 114% (280) 282 38 (66) 114% 9 (57) 117% (220) 148 78 (50) 103% 7 (43) 106% $11.4 $4.027 $0.747 $0.447 15.3 25.6 [2023-08] (260) 211 60 (69) 94% 13 (56) 109% (289) 273 38 (80) 108% 14 (66) 113% (221) 125 90 (53) 97% 6 (47) 100% $11.6 $3.726 $0.906 $0.443 12.8 26.3 [2023-09] (252) 194 59 (72) 90% 13 (59) 105% (278) 254 38 (82) 105% 13 (69) 110% (219) 119 85 (60) 93% 6 (54) 96% $9.9 $3.353 $0.785 $0.341 12.7 29.1 Position - Margin - Risk Dashboard
Current Position ATC Current Position On-Peak Current Off-Peak Position Gross Margin & GM@R (400)
(200)
0 200
400
[BFY 2022] [FY 2023] [FY 2024] [FY 2025] [FY 2026] Avg MW On-Peak Position by Year
Load Renewable & Battery Current Hedges Total Net Position (400)
(200)
0 200
400
[BFY 2022] [FY 2023] [FY 2024] [FY 2025] [FY 2026] Avg MW Off-Peak Position by Year
Load Renewable & Battery Current Hedges Total Net Position $0
$5
$10
$15
$20
$25
[BFY
2022]
[FY 2023] [FY 2024] [FY 2025] [FY 2026] GM@R
Current Cost @ Risk
[calendar year]
Current GM@R
(400)
(200)
0 200
400
[BFY 2022] [FY 2023] [FY 2024] [FY 2025] [FY 2026] Avg MW ATC Position by Year
Load Renewable & Battery Current Hedges Total Net Position A s c e n d A n a l y t i c s | A n a l y t i c s t o P o w e r t h e E n e r g y T r a n s i t i o n 6

1.6 ASCEND PLATFORM SERVICE PRICE
Please see the pricing details below and a general description of the offer. The signature section of this proposal is for the Pilot Extension engagement only.

After the Pilot Extension period, SDCP may upgrade to a 3-Year SaaS+Service solution. This structure is similar to an approach agreed upon about a year ago between Ascend and Central Coast Community Energy and has long been the arrangement between Ascend and Silicon Valley Clean Energy. For this indicative pricing, we have listed two options (Silver and Gold) which vary in nature only in the number of activity units3 provided for each. Please note that the chart shows the cost of all four items as standalone for comparison purposes.

Service Offering
Example
Stand-Alone
Cost
Total Cost
For 4 Month Pilot Extension
Item 1: Seven Month
PowerSIMM Pilot Extension
$70,000
$70,000
Item 2: 100 Support Hours
for ongoing analytic support
of resource valuation and
portfolio assessment, along
with weekly risk reporting.

Any unused hours will be
added to the PowerSIMM
License full implementation.

Included
Item 3a: PowerSIMM
Portfolio Manager
$140,000
Indicative Bundled
PowerSIMM
SaaS + Service
3-Year Subscription
Example – SILVER2
Indicative Bundled
PowerSIMM
SaaS + Service
3-Year Subscription
Example - GOLD3
2 Indicative and subject to scoping with SDCP. Costs for years 2 and 3 escalated per CPI. 3 Indicative and subject to scoping with SDCP. Costs for years 2 and 3 escalated per CPI.

A s c e n d A n a l y t i c s | A n a l y t i c s t o P o w e r t h e E n e r g y T r a n s i t i o n 7 Item 3b: PowerSIMM
Planner
$ 50,000
Annual Activity Units: 700
Year 1 Cost: $290,000
Annual Activity Units: 1,200
Year 1 Cost: $390,000
Item 3c: Market Intelligence $25,000
Item 4: ‘+Service’ Ongoing
Collaborative and
Consultative Support (cost
per year)4
$250,000
Ascend Valuation Platform
Total
$475,000

1.7 DELIVERY SCHEDULE ON PORTFOLIO VALUATION
Ascend will provide continued access to the pilot environment for this extension. Additionally, Ascend will provide weekly reporting support and consultation or any other support as requested by SDCP.

Please do not hesitate to contact me or Scott Wrigglesworth at any time with any comments and/or suggestions to our proposal. My direct contact information is [email protected] or (303) 415-0311, and Scott Wrigglesworth can be reached at [email protected] or (937) 701-7205. We look forward to collaborating with you to provide this package of portfolio risk management modeling and services.

Best regards,
Gary W. Dorris, PhD
CEO
4 Subject to scoping of SDCP requirements for various service including but not limited to portfolio management, risk management, resource planning, RFO valuation, RFO administration.

A s c e n d A n a l y t i c s | A n a l y t i c s t o P o w e r t h e E n e r g y T r a n s i t i o n 8 By signing below, San Diego Community Power enters into an Agreement with Ascend Analytics to proceed with the scope of work and respective compensation outlined in this proposal, as mutually agreed upon between Ascend and San Diego Community Power. The only terms and conditions applicable to this Agreement are those contained herein. Any other terms and conditions applied to this Agreement shall be mutually agreed upon between San Diego Community Power and Ascend Analytics and shall be expressly made in writing and duly signed by both parties. The party signing below warrants that they are duly authorized to sign on behalf of their respective organization:

San Diego Community Power (SDCP)
(Signing for 7-Month PowerSIMM Pilot Extension Only)
By:

Name: Karin Burns
Title: Chief Executive Officer
A s c e n d A n a l y t i c s | A n a l y t i c s t o P o w e r t h e E n e r g y T r a n s i t i o n 9

2. Appendix A: Ascend Approach & Market Intelligence
Price and Revenue Forecast Methodology
Ascend Analytics provides sub-hourly price level forecasts driven by the modeling of market fundamentals of supply and demand through our PowerSIMM modeling framework. PowerSIMM is an industry leading production cost and market simulation model used by leading utilities all over the US to make critical resource and portfolio management decisions. Unfortunately, traditional
models were built to plan for the grid of the past,
where renewables were a tiny part of the supply stack
and dispatchable gas and coal dominated. They relied
on load duration curves or at best chronological
dispatch according to weather normalized shapes for load, renewables and prices. Now we are entering an era
where renewables are becoming the new baseload with weather as the new fuel. As a result, market dynamics are changing as renewable intermittency drives increased volatility in energy prices and drives down market implied heat rates when zero variable cost renewables increasingly often serve the marginal system megawatt-hour. Energy prices now follow the net-load shape (load minus renewables), causing the so called “duck curve” as solar grows to dominate the grid.

An overview of the Ascend modeling
framework is shown in Figure 7. Policy
assumptions and macro variables drive
fundamental variables to the PowerSIMM
production cost model and these in turn
determine the simulation parameter inputs to
the PowerSIMM price simulation engine that
produces hourly and sub-hourly prices.

Because the PowerSIMM framework
includes the new drivers for variability in
price at the hourly and sub-hourly level, we
provide price projections with both average
price and the variability in price evolving
forward with changes in the supply stack.

Thus, key drivers like renewable penetration rates and the amount of flexible generation are important determinants to the variability in prices.

Market Forecasts are accompanied by 20-year Hub price forecasts inclusive of Day Ahead Energy, Real Time Energy, Ancillary Services, Resource Adequacy/Capacity, in 5-minute and 15-minute intervals.

Changing times call for more advanced
modeling to support robust and resilient
decisions in an increasingly uncertain world.

Figure 6. Overview of macro assumptions and market
fundamentals used to generate hourly and sub-hourly price simulations.

A s c e n d A n a l y t i c s | A n a l y t i c s t o P o w e r t h e E n e r g y T r a n s i t i o n 10

3. Appendix B: Platform Description
Table 1. Ascend Platform Description
Platform Service Description Use
Valuation and Risk
Analysis Service for
CAISO
Ascend’s valuation and risk analysis
platform (PowerSIMM) analyzes
and manages market and
generation risk from approximately
1 month to 10 years out. The
Ascend platform determines the
future revenue streams and their
risks on a project specific basis
inclusive of adverse market
conditions.

Simulation Engine
• Forecasted Monthly
Forward Prices for Energy
• Weather
• Load
• Spot Prices
• Renewables (Wind & Solar)
Simulation of wind and solar
production based on weather to
align volumetric uncertainty of
production with load and market
prices.

Price Forecasts
Price forecasts for CAISO. Includes:
• Hub DA and RT energy prices
up to 20 years
• Ancillary services prices
• Capacity prices
• Basis DA and RT prices
Portfolio Management
Output of PowerSIMM portfolio
variables for term analytics:
• Generation Modeling
(thermal, hydro, pumped
hydro, batteries, renewables,
etc.)
• Fuel Modeling
• Cost of Supply
Analysis
• Load with Renewable and Storage
• Long Term portfolio management
(defined as simulations horizon
from prompt month to 5 years)
• Model cost to serve load with
market interactions
• Integrated portfolio modeling for
physical assets, power purchase
agreements, loads, and contracts
Commodities Modeled
• Power
• Natural Gas
• Oil
• Coal
• Emissions (CO2, NOx, SO2)
• RECs
• Ancillaries
• Other Asset Related Components
Instruments Modeled
• Swaps
• Shaped fixed-price swaps
• Futures
• Call/Put options
• Daily call/put options
• CRRs
Assets Modeled
• Thermal
• Renewables
• Hydro
• Batteries
• Contracts
• Transmission
Spot & Forward/Forecast Prices
• Markets for energy and ancillaries
• Ascend will harvest ISO and market
prices, use Ascend CAISO Market
Forecasts for 5+ years
A s c e n d A n a l y t i c s | A n a l y t i c s t o P o w e r t h e E n e r g y T r a n s i t i o n 11 • Hourly marginal cost of
supply
• Ancillary service modeling
• Transmission modeling,
inclusive of losses and fees.

PowerSIMM Portfolio Manager
provides insight into the impact to
both physical operations and
system costs.

Analytic Framework
• Dispatch optimization
• Validation reporting
• Job management system
Platform Service Description Use
Reporting and
Detailed Results Drill
Down with the
PowerCube
Portfolio Planning Output
• OLAP cube reporting to Excel
• OLAP cube export to the
PowerBI Dashboard
Complete relational data cube
which is seamlessly integrated into
Microsoft Excel and Microsoft
PowerBI.

Analysis
• Output reporting for distribution of
standard reports, generation of ad-hoc reports, summarized at monthly volumes and values, with ability to
drill down to examine individual
portfolio components to hourly
level.
• Ascend can support the
development of custom risk metric
variables & custom reporting.
• Ability to extract hourly and sub-hourly model results for individual cases/scenarios.

Subscription Service Description Use
Heat Maps of
historical and
forecasted nodal
prices, basis, and
volatility for DA and
RT
• Access to Ascend Heat Maps
Overlay areas of high/low solar
weighted basis to assess project
potential, assess market price
volatility through congestion
persistence.
• Identify nodes that are more/less
promising for Battery valuation as a
screening tool.

Determine optimal siting for potential
future investments
A s c e n d A n a l y t i c s | A n a l y t i c s t o P o w e r t h e E n e r g y T r a n s i t i o n 12

4. Appendix C: Validation Criteria for PowerSIMM Implementation Ascend will use the following criteria for validating the features included in this proposed license, and SDCP shall use the same criteria during User Acceptance Testing (UAT). The tests will include only the functionality in the approved functional specifications. The tests will be conducted by SDCP business users, who have attended training sessions and participated as members of the project team. Any additional criteria and/or tests not included in this Appendix must be approved by both Ascend and SDCP prior to use in User Acceptance Testing.

Table 2. PowerSIMM Validation Criteria
Module Attribute Information Used to
Evaluate Expectation
Load Loads to be validated will be identified prior to implementation. •
Model Fit Model is not
Overfitted/Underfitted
Model fit will be assigned by load
class and zone both defined above
(i.e., not individual loads). Will use
training period of historical data
defined above. Model demonstrates
minimization of mean absolute error
(MAE) and thus demonstrates
negligible bias and low variance. To
verify this, the testing period
prediction should converge to testing
period actual within 15% (between

0.85 and 1.15) of testing period for
90% of load items, excluding
historical anomalies (i.e. hurricanes,
outages, etc.) and the mean monthly
value will converge within 1%.

Mean model fit: (Actual Total
Monthly Load – Simulated Total
Monthly Load)/Actual Total Monthly
Load <= 1%
Seasonal load profile Confidence intervals
for daily average load
by month
Simulated confidence intervals at
percentiles 5 and 95 match historical
confidence intervals within 10% on
an around the clock basis (ATC).

Hourly load profile Confidence intervals
for hourly load
Simulated confidence intervals at
percentiles 5 and 95 match historical
load shapes and are within 10% at
the monthly level, ATC.

Expected load (MWh) Mean simulated load
by month
Simulated mean monthly values
match forecasted monthly values for
expected energy within 1%.

Expected Peak
Demand
Mean simulated peak
demand by month
Simulated mean monthly values
match forecasted monthly values for
peak demand within 1%.

A s c e n d A n a l y t i c s | A n a l y t i c s t o P o w e r t h e E n e r g y T r a n s i t i o n 13 Forward
Price
Forward prices to be validated will be identified prior to implementation.

Uncertainty in future
prices
Confidence intervals
by delivery month
Simulated forward price monthly
volatility matches input monthly
volatility values.

Correlation of related
commodities
Simulated correlation
matrix
Positive semi-definite input matrix
matches simulated positive semi-definite output matrix using a PCA-based similarity test with a 0.9 similarity on average (including
confidence intervals of estimation).

Correlation of related
commodities
Simulated correlation
matrix
If non positive semi-definite input
matrix is provided, simulated output
matrix will match input matrix with

0.9 similarity on average (including
confidence intervals of estimation)
No arbitrage Mean simulated
forward price by
delivery month
Mean simulated monthly price equals
current market expectation for each
delivery month within 1%.

Sampling of Forward
Simulations
Gross Margin at Risk
(or other appropriate
metric)
Ascend will simulate xx forward sims
to achieve +/- 10% confidence
interval for Gross Margin at Risk [or
other appropriate metric] at the
annual level.

Spot Price Spot/basis prices to be validated will be identified prior to implementation.

Model Fit Kolmogorov-Smirnov
Test
Simulated spot prices achieve a p-value of 5% on average, by month and peak period ([client defined peak
periods, 7x24, 5x16, etc.]), for 90% of
peak period-month combinations.

Seasonal spot price
profile
Expected profile
converges to input
profile (either
historical profile or
user-defined) by
month
Will use a defined training period of
historical data. Model demonstrates
no bias and testing period prediction
should converge to testing period
actual within 2% of profile values at
mean by month.

Seasonal change in
correlation of related
commodities.

Simulated hourly heat
rate confidence
intervals by month.

Simulated confidence intervals at
percentiles 5 and 95 match historical
confidence intervals on average
within 10%.

No arbitrage Mean simulated spot
price by delivery
month
Mean monthly simulated spot price
equals the mean simulated forward
price of the same commodity for all
months within 1%.

A s c e n d A n a l y t i c s | A n a l y t i c s t o P o w e r t h e E n e r g y T r a n s i t i o n 14

5. Appendix D: Ascend Staffing
The following table lists Ascend staff for this project. Staff bios with qualifications and experience are available upon request.

Table 3. Select Ascend Staff
Name Title Role
Dr. Gary Dorris President, CEO Engagement Director
Dr. Allison Weis VP Battery Storage Optimization Lead
Dr. Carlos Blanco Managing Director,
Analytic Solutions
Risk Management Lead
Scott Wrigglesworth Vice President, Operations
& Strategy
Portfolio Management Lead
Michael Ballow Director, Strategy &
Analytics
Strategic Advisor / Modeling, Portfolio & Risk
Management
Dr. Brent Nelson Director, Forecasting and
Market Fundamentals
Forecasting Lead
Dr. Brandon Mauch Director, Resource
Planning Analytics
Resource Planning Modeling
Devin Gaby Sr. Manager, Software
Services
Implementation Manager & Ongoing Services
Anthony Boukarim Sr. Manager, Resource
Valuation & Valuation
Modeling and analysis support, Planning
Arran Blattel Manager, Model Support Technical model support Valerie Katz Manager, Client
Operations
Modeling and analysis support, Planning
Zach Brode Manager, Analytics Modeling and analysis support, Forecasting Dr. Anand Govindarajan Technical Product
Manager
Modeling and analysis support, Portfolio
Management
Logan Riber Senior Energy Analyst Modeling and reporting, Portfolio Management
Scott Fiedler Senior Energy Analyst Market Information and Data Management Trevor Rehm Senior Energy Analyst Modeling and reporting, Portfolio Management
Ken Knoll Senior Energy Analyst Modeling and analysis, Portfolio Management
Scott Nicholson Senior Energy Analyst Modeling and analysis support, Planning Quinn Borders Energy Analyst II Modeling and analysis support, QA Alex Nesnidal Renewable Energy Analyst Modeling and reporting, Portfolio Management
Sameera Gudladona Energy Analyst Modeling and analysis support, Planning Rebecca Guilfoyle Energy Analyst Modeling and analysis support, Planning A s c e n d A n a l y t i c s | A n a l y t i c s t o P o w e r t h e E n e r g y T r a n s i t i o n 15 Tamar Moss Energy Analyst Modeling and analysis support, Client Services
CJ Coglizer PowerBI Specialist Analysis support, Reporting Sid Matthew Energy Analyst Modeling and analysis support, Planning

6. Appendix E: I – ISO Reports and Hub Price Forecasts
Table 4. ISO Reports and Hub Price Forecasts
Hub/Zone Description ISO-NENY ISO CAISO ERCOT MISO PJM SPP Count of Primary
Hubs/Zones
1 4 Hubs
10 zones
4 4 6 Hubs 6 Hubs 2 Hub
Combined Hubs/zones
(homogenous regions)
1 4 4 4 6 6 2
Assumed Combinations Mass Zone A
Zone G
Zone J
Zone K
SP-15
NP-15
MidC
Palo Verde
North
South
Houston
West
Illinois
Indiana
MN
MS
LA
Michig
an
Dom
East
N. IL
West
New
Jersey
AEP
Dayton
South
North
Nodal ✓ ✓ ✓ ✓ ✓ ✓ ✓
Underlying input
assumptions
✓ ✓ ✓ ✓ ✓ ✓ ✓
Contemplated Update
schedule
✓ ✓ ✓ ✓ ✓ ✓ ✓
Version number ✓ ✓ ✓ ✓ ✓ ✓ ✓
Day Ahead Energy ✓ ✓ ✓ ✓ ✓ ✓ ✓
Real Time Energy ✓ ✓ ✓ ✓ ✓ ✓ ✓
Ancillary Services5 ✓ ✓ ✓ ✓ ✓ ✓ ✓
Resource
Adequacy/Capacity
✓ ✓ ✓ N/A ✓ ✓ ✓
5-minute ✓ ✓ ✓ ✓ ✓ ✓ ✓
15-minute N/A N/A ✓ ✓ N/A N/A N/A
Nodal Count ̴1,300 ̴600 ̴14,000 ̴15,000 ̴2,800 ̴11,000 ̴13,500 Est. Next Forecast
Vintage
July
2022
July
2022
Nov 2022 Nov
2022
Oct
2022
Aug 2022 Aug
2022
A s c e n d A n a l y t i c s | A n a l y t i c s t o P o w e r t h e E n e r g y T r a n s i t i o n 16 1 ISO-NE: Reg is ISO-wide, spin and non-spin are zonally priced. All ancillaries are real-time only.

NYISO: Zonal ancillaries with rules supporting sub-hourly repurchases of ancillaries and moves to serve RT energy.

CAISO: ISO-wide plus zonal adders (every location has the same base price, but zones will occasionally receive price adders for higher zonal demand for ancillaries.) Ancillaries are DA and RT, but standard rules preclude sub-hourly flipping to energy. Regulation Up and Down in CAISO.

ERCOT: DA regulation up, regulation down, spin, and non-spin and RT regulation up, regulation down, and spin MISO: Ancillary prices are nodal with DA and RT.

PJM: ISO-wide ancillaries for RT only.

SPP: Zonal DA and RT prices with Regulation Up and Down.

7. APPENDIX F: PowerSIMM SaaS License Agreement General Terms and Conditions
I. Independent Relationship
In the performance of the work and services hereunder, Ascend Analytics shall act solely as an independent private contractor and nothing contained herein or implied shall construe the relationship as that of an employer/employee, partnership or principal and agent.

II. Conflicts of Interest
Ascend Analytics warrants that there is no conflict of interest or potential conflict of interest between Ascend Analytics’ other agreements, if any, and the activities to be performed hereunder, and Ascend Analytics shall notify San Diego Community Power if a conflict of interest arises.

III. Consideration, Invoicing, Payment, and Term
As compensation to Ascend for the performance of all Services described in this Licensing Agreement (the “Agreement”), San Diego Community Power shall pay Ascend the fees outlined in Table 1. of the proposal.

Invoices payments shall be due within 30 calendar days after San Diego Community Power’s receipt of such invoice. Unpaid invoices shall accrue late fee payments of 1.5%/month commenced upon overdue notification (net-30).

This Agreement shall commence upon the Effective Date (defined as the date of signature as effected by San Diego Community Power) and will have an initial expiration date equal to one year from the commencement date. The A s c e n d A n a l y t i c s | A n a l y t i c s t o P o w e r t h e E n e r g y T r a n s i t i o n 17 license may be renewed on an annual basis by payment of the annual fee (“Annual Fee”) on or before the license expiration date. Annual Fees shall be invoiced prior to license expiration and shall be subject to an increase equal to the percentage increase in the Consumer Price Index (CPI) for all urban consumers (CPI-U) as published 90 days prior to the anniversary date for the preceding 12 month period by the U.S. Department of Labor, Bureau of Labor Statistics. In the event the CPI reflects a negative adjustment, the annual contract rate will remain flat.

IV. Insurance and Taxes
Insurance. Both parties are responsible for maintaining their own insurance coverage, including, but not limited to health and medical, automobile, homeowners/renters (if any), and comprehensive insurance, which may be required by law in the jurisdictions where Ascend Analytics does business or performs services to this Agreement.

1.1. Terms and Provisions of Policies. All policies of insurance that this Agreement requires Ascend to maintain shall:

1.1.1. provide that, without thirty (30) days’ prior written notice sent to San Diego Community Power, they may not be canceled, or non-renewed;

1.1.2. with the exception of worker’s compensation/employer liability insurance and any professional liability insurance/errors and omissions insurance that may be required, be primary to and not excess to or on a contributing basis with any insurance or self-insurance maintained by any additional insured(s);

1.1.3. with the exception of worker’s compensation/employer liability insurance and any professional liability insurance/errors and omissions insurance that may be required, be endorsed to name the following as additional insureds: San Diego Community Power and its subsidiaries and affiliates; the directors, officers, employees, and agents of San Diego Community Power and its subsidiaries and affiliates; and the successors and assigns of all of the foregoing (the “Additional Insureds”);

1.1.4. as to policies required by this Agreement to name additional insureds, provide for severability of interests or cross liability as to all insureds (whether named or otherwise); and

1.1.5. be written on an occurrence basis (except that any professional liability insurance that may be required may be written on a claims-made basis) and issued by insurance carriers reasonably acceptable to San Diego Community Power.

1.2. Specific Coverages. Ascend shall maintain the following insurance policies:

1.2.1. Commercial General Liability, on an occurrence basis, with a combined single limit of One Million Dollars ($1,000,000) per occurrence and an annual aggregate limit of Two Million Dollars ($2,000,000). Such policy shall contain a waiver of subrogation endorsement in favor of the Additional Insureds;
A s c e n d A n a l y t i c s | A n a l y t i c s t o P o w e r t h e E n e r g y T r a n s i t i o n 18

1.2.2. Comprehensive Automobile Liability, with a combined single limit of One Million Dollars ($1,000,000). Such policy shall contain a waiver of subrogation endorsement in favor of the Additional Insureds;

1.2.3. Workers’ Compensation, in statutorily required amount(s), and employer’s liability insurance of not less than One Million Dollars ($1,000,000) for each instance; provided, that if Ascend is not required by law to, and does not, carry Workers’ Compensation Insurance, Ascend shall execute and deliver to San Diego Community Power a Worker’s Compensation Insurance waiver provided by San Diego Community Power. Such policies shall contain a waiver of subrogation; and

1.2.4. Umbrella Excess Liability, of not less than Two Million Dollars ($2,000,000). Such coverage shall be on a per “occurrence” basis and shall contain a waiver of subrogation endorsement in favor of the Additional Insureds.

1.3. Insurance Coverage; Miscellaneous. Notwithstanding anything to the contrary in this Agreement, the liabilities of Ascend under this Agreement shall not be terminated, reduced, or otherwise limited by any expiration or termination of insurance coverages.

1.4. Subrogation Waiver. Except as otherwise provided in this Article IV, San Diego Community Power and Ascend waive all subrogation rights against (1) each other, and (2) any of the other’s subsidiaries, affiliates, subcontractors (of any tier), agents, and employees for damages caused by fire or other causes of loss to the extent covered by property insurance applicable to the Services.

Taxes and Levies. As independent entities, both parties are responsible for their own local, state, federal or other taxes or levies that may be due on the fees paid under this Agreement, including Social Security, value added (VAT) and payroll taxes. Such taxes will not be reimbursed by San Diego Community Power, nor does San Diego Community Power accept any responsibility with respect to non-payment of any such taxes which may be due.

VI. Security, Safety and Health Regulations
Ascend Analytics agrees to comply with all applicable institutional, local, state and national health and safety regulations when performing any work or services hereunder.

VII. Indemnification
To the fullest extent permitted by law, each Party (an “Indemnitor”) shall defend, indemnify and hold harmless the other Party, its affiliates, members, partners, contractors, subcontractors and agents, and the directors, shareholders, officers, agents and employees of each of them, from and against all losses, damages, liabilities, and expenses (including court costs and reasonable attorneys' fees) which are caused by or arise out of the fault or negligent acts or omissions, whether active or passive, of the Indemnitor in connection with activities or Services under this Agreement, or result from any breach by the Indemnitor of any provision of this Agreement.

Notwithstanding the forgoing, no such indemnification shall be provided by San Diego Community Power to Ascend for fraudulent or illegal acts or acts of willful misconduct of Ascend in connection with activities or Services provided pursuant to this Agreement.

VIII. Limitation of Liability
A s c e n d A n a l y t i c s | A n a l y t i c s t o P o w e r t h e E n e r g y T r a n s i t i o n 19 In no event shall either Party, or an officer, director, member, partner, shareholder, employee, agent or affiliate of either Party, be liable for special, indirect, exemplary, punitive or consequential damages of any nature whatsoever arising out of this Agreement, including damages or claims in the nature of lost revenue, income or profits, loss of use, or cost of capital, irrespective of whether such damages are reasonably foreseeable and irrespective of whether such claims are based upon negligence, strict liability, contract, operation of law or otherwise; provided, that the limitation of liability imposed by this Article VII shall not apply to (a) Ascend’s indemnity obligations set forth in this Agreement as they relate to claims by third parties or (b) losses which arise or result from fraud, willful misconduct, or gross negligence of Ascend or any subcontractor or vendor of Ascend.

IX. Confidential Matters and Proprietary Information
Confidential Information. Ascend acknowledges that as a result of Ascend's retention by San Diego Community Power, Ascend will become informed of, and have access to information deemed to be confidential by San Diego Community Power. It is hereby agreed that all information provided to Ascend whether orally or in writing in relation to (i) San Diego Community Power and its business, (ii) specific projects or entities owned (in whole or in part) by San Diego Community Power, and (iii) the business plans and activities of San Diego Community Power and its affiliates shall be "Confidential Information". Notwithstanding the above, information shall not be considered confidential under this Agreement if (a) it is or becomes publicly available through no act or omission of Ascend or its employees or agents, or (b) was already known to Ascend at the time of disclosure, or (c) is required to be disclosed by a court or regulatory agency acting within its authority; provided, however, that Ascend shall first inform San Diego Community Power of the disclosure requirement to allow San Diego Community Power to challenge the disclosure requirement should San Diego Community Power wish to do so.

Use and Disclosure. All Confidential Information provided by or on behalf of San Diego Community Power remains the sole property of San Diego Community Power. Ascend shall hold and maintain such Confidential Information in strictest confidence and in trust and shall use such Confidential Information only for the specific purpose for which it was disclosed or delivered to Ascend. For a period of three (3) years after the date of this Agreement, Ascend shall not disclose such Confidential Information to any person or entity (except as permitted under this Article VIII). Ascend shall, at Ascend's sole cost and expense, take all necessary actions and precautions to protect the confidentiality of such Confidential Information and any documents or other materials containing any Confidential Information, and shall immediately notify San Diego Community Power in writing upon its discovery of any such unauthorized use or disclosure of such Confidential Information.

Disclosure to Employees. Ascend shall restrict access to Confidential Information only to employees of Ascend who clearly need such access in order to participate in Ascend's business relationship with San Diego Community Power and who have been instructed to comply with the terms of this Agreement.

Remedies. Ascend acknowledges that the use or disclosure of Confidential Information in violation of this A s c e n d A n a l y t i c s | A n a l y t i c s t o P o w e r t h e E n e r g y T r a n s i t i o n 20 Agreement may cause substantial and irreparable injury to San Diego Community Power and that San Diego Community Power may obtain injunctive or other equitable relief to prevent such use or disclosure.

Delivery upon Request. Immediately upon the termination or expiration of Ascend's use of Confidential Information, and upon San Diego Community Power 's request, Ascend will delete, destroy or return all records, notes, analyses, memoranda, drawings and other written or tangible materials, documents or media containing any Confidential Information of San Diego Community Power, including all copies and reproductions thereof, except as may be present on computerized backup systems, provided such Confidential Information is deleted from local hard drives and no attempt is made to recover such Confidential Information from servers or back-up sources, and provided any such retained Confidential Information shall remain subject to the disclosure and use restrictions set forth herein, notwithstanding any termination or expiration of this Agreement.

Data Retention within PowerSIMM. San Diego Community Power recognizes that output files, modeling case studies, and case input assumptions informing San Diego Community Power’s modeling results will be available for access for no longer than two (2) years from the date upon which the studies were generated within PowerSIMM.

X. Ownership of Deliverables
San Diego Community Power will have exclusive rights to use the analytical deliverables, but will not have rights to resell or redistribute the delivered analytical products.

San Diego Community Power agrees that all rights, title, and interest in and to all models, tools, systems, or processes used or developed by Ascend in the course of providing Services pursuant to this Agreement, including, but not limited to, patent rights, trade secrets, mask works, and copyrights, shall remain exclusively with Ascend without further consideration; provided that {Client} may retain and use a copy of any studies, reports, and analyses for its sole use.

XI. Termination of Agreement
San Diego Community Power shall have the right to terminate this Agreement at any time by providing seven (7) days prior written notice to Ascend Analytics. Ascend Analytics will be reimbursed for documented costs to date, at the agreed rates, plus reasonable costs necessary to terminate the project, and will not be required to refund any prepaid licensing fees. Ascend has the right to withdraw services at any time by providing seven (7) days prior written notice to San Diego Community Power, and refund any additional amounts paid by San Diego Community Power for services due but not rendered by Ascend Analytics under this Agreement.

XII. Notices
A s c e n d A n a l y t i c s | A n a l y t i c s t o P o w e r t h e E n e r g y T r a n s i t i o n 21 Any notice required to be given hereunder shall be deemed to have been sufficiently given either when served personally, sent by first class mail addressed to the Parties at the addresses set forth in this Agreement, or transmitted via email to the other Party at its address indicated below or at such other address as either Party may designate for itself in a written notice to the other Party.

If to Ascend: If to San Diego Community Power:

Ascend Analytics LLC
1877 Broadway
Suite 706
Boulder, CO 80302
San Diego Community Power
PO BOX 12716
San Diego, CA 92101
Attention: Gary Dorris
Telephone: 303-415-1400
[email protected]
Attention:

Andrea Torres
[email protected]
XIII. Waiver and Governing Law
Failure of either party to enforce any of its rights hereunder shall not constitute a waiver of such rights, or of any other rights hereunder. This Agreement shall be interpreted in accordance with the laws of Colorado without regard to the choice of law rules thereof.

IVX. Intellectual Property Indemnity
During the term of the Agreement, Ascend shall release, defend, indemnify, and hold harmless San Diego Community Power from and against any and all causes of action, claims, damages, liabilities, judgments, settlements, losses, costs, or expenses of any kind, including reasonable attorneys’ fees, arising out of or related to Ascend’s infringement upon or misuse of the intellectual property rights of any third party. In addition, if the use of the Services infringes or is enjoined, or Ascend believes it is likely to infringe or be enjoined, Ascend may, at its sole option: (a) procure for San Diego Community Power the right to continue use of the Services as furnished; or (b) modify the Services to make them non- infringing, provided that they still substantially conform to their original intended use. The intellectual property indemnity provided herein does not apply to the extent (where, but for the following, there would be no infringement) (a) the alleged infringement arises from any use of the Services not in accordance with this Agreement or (b) any unauthorized modification of the Services. This section states Ascend’s sole and exclusive liability and San Diego Community Power’s sole remedies for any threatened or actual infringement of proprietary rights.

A s c e n d A n a l y t i c s | A n a l y t i c s t o P o w e r t h e E n e r g y T r a n s i t i o n 22 XIV. Force Majeure
Neither party shall be liable to the other for failure or delay in the performance of any of its obligations under this Agreement for the time and to the extent such failure or delay is caused by force majeure such as, but not limited to, riots, civil commotions, wars, freight embargo, lock-outs, hostilities between nations, governmental laws, orders or regulations, actions by the government or any agency thereof, storms, fires, sabotages, explosions or any other contingencies beyond the reasonable control of the respective party and of its sub-contractors (“Force Majeure”). If such Force Majeure events affects a party’s ability to perform an obligation under the Contract, the affected party shall immediately inform the other party of such circumstances together with documents of proof, no later than ten (10) business days after having knowledge of the Force Majeure. A party will be deemed to have invoked Force Majeure from the date when that party gives written notice of the event of Force Majeure in accordance with this clause. The affected party shall provide to the other Party reports with respect to the Force Majeure at such intervals as the other party may reasonably request while the Force Majeure continues and the performance of obligations hereunder shall be suspended during, but not longer than, the period of existence of such cause and the period reasonably required to perform the obligations in such cases.

The affected party shall take commercially reasonable steps to mitigate damages, including sourcing products and services from alternative suppliers or using alternative methods, arising out of the force majeure event. The parties shall have the right to terminate a contract with written notice should the force majeure event last more than 6 months.

SAN DIEGO COMMUNITY POWER
Staff Report – Item 14
--------------------------------------------------------------------------------------------------------------------- To: San Diego Community Power Board of Directors
From: Eric W. Washington, Chief Financial Officer
Via: Karin Burns, Chief Executive Officer
Subject: Appointment of Members to the Finance and Risk Management Committee
Date: February 22, 2024
---------------------------------------------------------------------------------------------------------------------

RECOMMENDATION
Staff recommends that the Board of Directors consider the appointment (or reappointment) of Members to the Finance and Risk Management Committee.

BACKGROUND
The Finance and Risk Management Committee (FRMC) is a standing committee of the San Diego Community Power (SDCP) Board of Directors (Board), whose purpose, as stated in section 5.10.2 of SDCP’s Joint Power Agreement, is to provide input and oversight on matters related to the agency’s funding plan, its fiscal year budgets, financial policies and procedures, risk management policies and procedures, and other responsibilities as may be directed by the Board.

Under Article VIII, section 2 of SDCP’s Bylaws, the Board Chair (Chair) nominates members to standing committees, subject to approval by majority vote by the Board. If the Board fails to approve the Chair’s nominations to a Standing Committee, the Board may entertain a motion for the appointment of the committee members. The Bylaws also expressly provide that Alternate Directors may serve on and chair committees.

On January 30, 2020, the Board established the FRMC and appointed Directors Mark West and Bill Baber to serve as the primary members until December 2020. Director Baber was appointed with the understanding that his Alternate Director, Greg Humora, would represent La Mesa at the FRMC. The Board also approved the expansion of the scope of the FRMC to include energy risk management. On December 17, 2020, Directors Serge Dedina and Bill Baber were subsequently appointed to serve on the FRMC Committee.

On January 20, 2022, due to the expansion of the SDCP Board to seven directors, SDCP added an additional committee member to the FRMC and appointed Director Joe LaCava.

On November 17, 2022, SDCP Resolution No. 2022-14 honored the service of Director Serge Dedina and SDCP Resolution No. 2022-16 honored the service of Director Bill Baber whose terms on SDCP’s Board would end with SDCP.

On January 23, 2023, Mayor John McCann was appointed as the Chair of the FRMC.

Mayor Paloma Aguirre and Councilmember Colin Parent were also appointed to the committee as members.

ANALYSIS AND DISCUSSION
There is no term of office for a committee member, so current members can continue to serve in this capacity unless they step down voluntarily or are changed by a vote of the Board. If any changes are to be made to the Committee at this time, Article VIII of the SDCP Bylaws calls for the Chair to nominate the committee member(s) subject to approval by a majority vote of the Board.

COMMITTEE REVIEW
N/A

FISCAL IMPACT
N/A

ATTACHMENTS
N/A

SAN DIEGO COMMUNITY POWER
Staff Report – Item 15
-------------------------------------------------------------------------------------------------------------------- To: San Diego Community Power Board of Directors
From: Eric Washington, Chief Financial Officer
Via: Karin Burns, Chief Executive Officer
Subject: Mid-Year Budget Amendment
Date: February 22, 2024
--------------------------------------------------------------------------------------------------------------------

RECOMMENDATION
Recommend Board approval of mid-year budget amendment.

BACKGROUND
On October 1, 2019, the Founding Members of San Diego Community Power (SDCP) adopted the Joint Powers Agreement (JPA) which was amended and restated on December 16, 2021. Section 4.6.2 of the JPA specifies that the SDCP Board of Directors (Board) shall adopt an annual budget with a fiscal year that runs from July 1 to June 30.

Section 7.3.1 of the JPA specifies that the board may revise the budget from time to time as may be necessary to address contingencies and unexpected expenses. On June 23, 2023, the Board approved the FY 2023-24 budget which included net revenue of $1,292,472,530 and total expenses of $1,002,038,709, resulting in net position of $290,433,821.

Since then, the FY 2023-24 budget has had significant changes to its operating revenues and expenses. Specifically, on January 18, 2024, the Board approved a rate change, effective February 1, 2024, which also included increased expense and energy cost projections. Other budget adjustments include reductions in personnel, professional services and consultants, and general and administration costs. These adjustments are primarily due to the timing of acquiring staff, aligning with known costs and contracted services.

Staff therefore recommend approving an amendment to the FY 2023-24 budget to increase total net operating revenues to $1,304,274,067 and total expenses to $1,071,601,284, resulting in a net position of $232,672,783 for FY 2023-24.

ANALYSIS AND DISCUSSION
The FY 2023-24 Amended budget seeks to adjust the budget originally presented to the Board in June 2023. The amended budget includes a minor increase in revenues and large increases in the cost of energy. The rate change approved by the Board in January 2024 is reflected in the budget and aligned with the most recent proforma. The amendment also includes a 7.5% (or $3.5 million) reduction in non-energy costs.

Table 1 illustrates the proposed FY 2023-24 budget amendment in comparison to SDCP’s budgets from prior years.

Table 1. SDCP Operating Budgets
The FY 2023-24 budget amendment includes the key assumptions outlined below. A more detailed breakdown and explanation of revenues and expenses are presented in Attachment A.

Net Revenue
The rate changes approved by the Board during the January 18, 2024, meeting which became effective on February 1, 2024.

Cost of Energy
Energy costs were adjusted up by 7.6% from $948,529,425 to $1,020,844,552. This increase was driven by increased renewable energy and resource adequacy costs.

Operating Expenses
SDCP’s non-energy operating expenses fall into five categories: personnel costs, professional services and consultants, marketing, and outreach, general and administration and programs. SDCP has direct control of these costs and actively manages them. Overall, SDCP is proposing a reduction in non-operating expenses of

7.5% from $47,231,709 to $43,708,093. Given the small percentage of SDCP’s total expenses, operating expenses had minimal impact on the overall total expense. Expense assumptions include the following:
• Personnel include salaries, payroll taxes, benefits, and excused absence and paid time off for staff. The recruitment strategy includes increasing staffing levels to 70 (instead of fifty-nine in the adopted budget) by the end of FY 2023-24.

SDCP Budget Date Adopted Date Amended Total Expense Net Position FY 2020-21 6/25/2020 5/27/2021 $34,135,000 ($7,848,092) FY 2021-22 6/24/2021 2/24/2022 $341,934,335 $36,119,151 FY 2022-23 6/23/2022 2/23/2023 $772,078,710 $157,713,219 FY 2023-24 6/23/2023 $1,002,038,709 $290,433,821
FY 2023-24 (Proposed) $1,071,601,284 $232,672,783
• Professional Services and Consultants include SDG&E fees, data management fees from Calpine, technical support (for rate setting, load analysis, energy scheduling, etc.), legal/regulatory services and other general contracts related to IT services, audits, and accounting services. • Marketing and Outreach includes expenses for mandatory enrollment notices, communication consultants, mailers, printing, sponsorships, and partnerships to inform the community of SDCP.
• General and Administration budget covers the cost of office space, equipment, membership dues, and other general operational costs.
• Programs include funding to support initial pilot programs after the SDCP Community Power Plan is launched and other community-based program efforts.

Net Position
The proposed FY 2023-24 budget results in a net position of $232,672,783.

The following table illustrates SDCP’s proposed FY 2023-24 budget amendment compared to its adopted budget for FY 2023-24.

Table 2. FY 2023-24 Budget Amendment compared to FY 2023-24 Adopted Budget Item FY 24 Adopted Budget FY 24 Amended Budget Difference Gross Revenue $1,346,325,552 $1,365,732,007 $19,406,455 Less Uncollectibles ($53,853,022) ($61,457,940) ($7,604,918) Net Revenue $1,292,472,530 $1,304,274,067 $11,801,537
Cost of Energy $948,529,425 $1,020,844,552 $72,315,127
Non-Energy Costs $47,231,709 $43,708,093 ($3,523,616)
Subtotal Operating Expense $995,761,134 $1,064,552,645 $68,791,511 Debt Service $2,437,574 $2,393,639 ($43,935)
CIP $3,840,002 $4,655,000 $814,998
Total Expense $1,002,038,710 $1,071,601,284 $69,562,574 Net Position $290,433,820 $232,672,783 $57,761,037
Budget Development Timeline
On July 28, 2022, the Board adopted a budget development schedule as part of the SDCP Budget Policy. This development schedule includes a mid-year budget review through the proposed budget amendment.

Table 4. Current Budget Development Schedule

FISCAL IMPACT
The FY 2023-24 amended budget right sizes the revenues to the rate decrease approved by the board on January 18, 2024, and effective February 1, 2024. The amendment also accounts for increases in energy costs, aligns expenses with known personnel, marketing, communications, professional services, and general and administrative costs, and includes a reduction in non-operating expenses of 7.5% from $47,231,709 to $43,708,093.

The resulting FY 2023-24 budget amendment results in a net position of $232.7 million versus $290.4 million in the FY 2023-24 adopted budget.

ATTACHMENTS
Attachment A: FY2023-24 Budget Amendment
FISCAL YEAR 2023-24 AMENDED
BUDGET
for the period
July 1, 2023, through June 30,
2024
2 San Diego Community Power
Budget Amendment for FY 2023-24 (Proposed)
Supplemental Details

OPERATING REVENUES
FY 2023-24
Adopted Budget
FY 2023-24
Budget Amended
% of Net
Revenues
Gross Ratepayer Revenues $ 1,346,325,552 $ 1,365,732,007 (Less 4.5% Uncollectible Customer Accounts) $ (53,853,022) $ (61,457,940) Net Operating Revenues $ 1,292,472,530 $ 1,304,274,067 95.5%

COST OF ENERGY
Cost of Energy $ 948,529,425 $ 1,020,844,552
Total Cost of Energy $ 948,529,425 $ 1,020,844,552 74.7% Gross Net Position $ 343,943,105 $ 283,429,515 20.8%

OPERATING EXPENSES
Professional Services and Consultants
Data Management $ 13,458,692 $ 13,458,692
SDG&E Fees $ 4,035,591 $ 4,035,591
Technical Support $ 1,440,000 $ 1,325,000
Legal/Regulatory $ 2,176,000 $ 1,511,444
Other Services $ 1,829,343 $ 1,919,930
Total Prof. Svcs. Costs $ 22,939,626 $ 22,250,657 1.6%
Personnel Costs
Salaries $ 10,300,938 $ 9,052,605
Benefits (retirement/health) $ 2,018,456 $ 1,809,775
Payroll Taxes $ 731,264 $ 613,641
Accrued PTO $ 127,373 $ 127,373
Total Personnel Costs $ 13,178,031 $ 11,603,394 0.8%
Marketing and Outreach
Printing $ 1,369,829 $ 1,367,178
Partnerships/Sponsorships/Memberships $ 964,000 $ 914,000 Marketing and Communications $ 640,000 $ 644,800
Total Mrktg and Outreach Costs $ 2,973,829 $ 2,925,978 0.2% General and Administration
Other G & A $ 6,966,205 $ 5,886,728
Education and Training $ 60,000 $ -
Cal CCA Dues $ 405,000 $ 405,000
Rent $ 398,768 $ 453,245
Insurance $ 32,000 $ 67,592
Total G & A Costs $ 7,861,973 $ 6,812,564 0.5%
Programs
Programs $ 278,250 $ 115,500
Total Programs Costs $ 278,250 $ 115,500 0.0%
Net Operating Expenses $ 47,231,709 $ 43,708,093 3.2%
Total Operating Expenses $ 995,761,133 $ 1,064,552,645 77.9% Operating Income (Loss) $ 296,711,397 $ 239,721,422 17.6%

NON-OPERATING REVENUES (EXPENSES)
Interest and Related Expenses $ 2,437,574 $ 2,393,639
Total Non-Operating Revenues (Expense $ 2,437,574 $ 2,393,639 0.2%

CAPITAL INVESTMENT PROGRAM (CIP)
Transfer to Capital Investment Program $ 3,840,002 $ 4,655,000 Interfund Transfer Out (Expenses) $ 3,840,002 $ 4,655,000 0.3% CHANGE IN NET POSITION $ 290,433,821 $ 232,672,783 17.0% 3 Budget Amendment Overview
Budget-in Brief
The proposed FY 2023-24 Operating Budget Amendment includes the first full fiscal year of full enrollment from Phase 1, 2, 3 and 4 for all potential ratepayers from SDCP’s member jurisdiction within the San Diego region. This budget therefore provides the first representation in the agency’s history of what full revenues and expenses are expected to be moving forward, all assumptions being equal.

As SDCP scales to full enrollment, the agency is additionally, thoughtfully scaling the agency by adding staff to grow to 70 total staff. By the end of FY 2023-24, SDCP is expected to have similar operating budgets and staffing levels compared to its peer CCAs of similar customer and load size. Additionally, and similarly, by the end of FY 2023-24, SDCP’s reserves, and total liquidity are expected to be comparable to its CCA counterparts who have investment-grade credit ratings.

The proposed FY 2023-34 Operating Budget Amendment additionally includes reduced travel expenses, legal and regulatory costs, and personnel costs.

Lastly, this budget includes the addition of a Capital Investment Plan (CIP) that shifts programs and projects over multi-year periods from the operating budget to the CIP.

By the end of FY 2023-24, SDCP will be on track to nearly hitting its 180-days cash on hand Strategic Plan Goal reserve target.
4 Proposed Budget Amendment
The SDCP FY 2023-24 Proposed Budget Amendment is presented in further detail in the following pages.

The table below summarizes the revenue and expense budgets adopted for FY24 in comparison to the proposed FY24 Amended Budget.

FY24 Proposed FY24 Amended
Gross Revenue 1,346.3 1,365.7
Less Uncollectible Accounts (53.9) (61.5)
Net Operating Revenues 1,292.5 1,304.3
Cost of Energy 948.5 1,020.8
Non-Energy Costs 47.2 43.8
Subtotal Operating Expense 995.8 1,064.7
Debt Service 2.4 2.4
CIP 3.8 4.6
Total Expenses 1,002.3 1,071.7
Net Position 290.4 232.6
Amounts displayed in millions, $
5 Operating Revenue
SDCP’s main source of revenue currently is from the retail sale of electricity to its customers. Revenue budgeted for FY 2023-24 reflects a full fiscal cycle of retail sales to our commercial and industrial customer base and retail sales to our residential customer base.

Additional assumptions for net operating revenue include:
• Enrollment of customers is complete from member jurisdictions in Phases 1, 2, 3 and 4. • 95% participation rate across all jurisdictions.
• A 4.5% uncollectible rate which is an increase from the 4% uncollectible rate assumed in the adopted budget.
• Rates remain at the levels adopted by the Board on January 18, 2024, including a year-over-year

23.2% rate reduction in the winter months and a 12.3% rate reduction in the summer months.

Further mid-year rate changes are subject to Board approval.

The following table summarizes the revenues for FY24 Amended Budget and the FY24 Adopted Operating Budget. Note that Gross Revenue and Less Uncollectible Accounts are based on projected numbers from rate setting that was approved by the Board back on January 18, 2024.

FY24 Adopted FY24 Amended
Gross Ratepayer Revenues 1,346.3 1,365.7
(Less 4.5% Uncollectible Customer Accounts) 1 (53.9) (61.5) Net Operating Revenues 1,292.5 1,304.3
Amounts displayed in millions, $
1 Uncollectible accounts were calculated with an assumption at 4% in the adopted budget for FY24. 6 Operating Expenses
Expenses in the SDCP Operating Budget fall into five budget level 2 categories: cost of energy, personnel costs, professional services and consultants, marketing, and outreach, and general and administration. • Cost of Energy – Cost of Energy includes all the various services purchased from the power market through our suppliers. This includes purchased energy, capacity, CAISO fees and other miscellaneous power market expenses.
• Personnel – Personnel costsinclude salaries, payrolltaxes, benefits, and excused absence and paid time off forstaff. In addition, costs include assumptions from the Board adopted compensation policy including potential merit and cost-of-living increase. • Professional services and consultants
o Legal/Regulatory Services – SDCP retains legal counsel to assist with the complex aspects of the regulatory, compliance, power supply contract negotiations and its general legal needs. This line item will also allow for the retention of both a state and federal lobbyist to support SDCP’s legislative and regulatory efforts. o Technical Support – SDCP engages consultants to assist with rate setting, policies, joint rate comparisons with the IOU, load analysis, and a scheduling coordinator. After electric power is scheduled for delivery to customers and consumed by those customers, the actual electric consumption must be trued up against the forecasted and scheduled energy. This true-up occurs through the settlement process. Settlements also entail addressing several other market and regulatory requirements. As SDCP grows its internal staff, it will look to in-house portions of this service. o Other Services – SDCP contracts or plans to contract for IT Services, Audit services (data and financial), Accounting services, and other services as needed. SDCP continues to examine if these services are more cost effective or efficient to bring in-house and SDCP is growing its IT function in-house and expecting a reduction in its IT Services professional services agreement.
o SDG&E Service Fees – Service fees paid to SDG&E consist of a charge of a fixed fee per account per month. The rollout of all enrollment phases adds significant costs compared to FY 2023-24. The fees cover SDG&E’s costs associated with meter reading additional data processing and bill coordination as mandated and regulated by the California Public Utilities Commission (CPUC). There are also numerous small fees associated with data requests.
o Data Management – Broad scope of services that includes all “back office” billing data validation, bill coordination with SDG&E, call center services and billing technical support, customer enrollment database management, move- in/move-out services, customer research for enrollment support, and many support functions related to data reporting. With full enrollment from all phases, the cost for Data Management will be higher compared to prior fiscal years.
7 • General and Administration – General and Administration costs include leasing office space, industry fees or memberships (e.g., CalCCA dues), equipment and software, as well as other general operational costs including Board and Committee expenses, Board stipends, staff travel or professional development, team building, etc. • Programs – Programs includes funding for general and administrative support for all program areas including services such as geographic information systems (GIS) mapping grant-writing support, etc. Moving forward, individual program costs will be moved to SDCP’s Capital Investment Program (CIP).

The table below summarizes the expenses for the FY24 Amended Budget and the FY24 Adopted Operating Budget. Note that SDCP reduced expenses in non-energy costs.

FY24 Adopted FY24 Amended
Cost of Energy 948.5 1,020.8
Professional Services and Consultants 22.9 22.3
Personnel Costs 13.2 11.7
Marketing and Outreach 3.0 2.9
General and Administration 7.9 6.8
Programs 0.3 0.1
Subtotal Operating Expenses 995.8 1,064.7
Interest and Related Expenses 2.4 2.4
Capital Investment Program (Transfer Out) 3.8 4.6
Total Expenses 1,002.4 1,071.7
Amounts displayed in millions, $
Non-Operating Revenues (Expenses)
Non-operating revenue represents interest income earned on cash reserves. Non-operating expenses represents interest paid on borrowed funds under the bank credit facility maintained by SDCP used to finance a portion of its operations. Expenses also include other bank related fees (i.e., letter of credit issuance fees, renewal fees, etc.).
8 Capital Investment Program (CIP)
New for FY 2023-24, SDCP developed its first Capital Investment Program (CIP) which contains all the individual capital projects, equipment purchases, and major programs for the agency that are intended to span multiple years.

The FY 2023-24 budget proposed a one-time portion of net operating revenues be transferred to the CIP as a continuing fund in which any unspent funds are kept within that fund and carried forward to the subsequent fiscal year.

The CIP includes funding for local development feasibility studies, customer program pilot projects, member agency grants, community grants, a customer education platform, and other areas as outlined in the short
9 Operating Expenses by Department
The table below summarizes the FY24 Proposed Operating Budget expenses by department.

Departments were established as part of the FY24 Proposed Operating Budget development and are not shown in the prior year. SDCP reduces the Operating budget for non-energy costs. The Power Services department includes Cost of Energy in their Expenses.

FY24 Adopted FY24 Amended
Power Services 950.7 1,022.4
Finance 3.8 3.3
Operations 17.9 16.3
Data Analytics and Account Services 19.1 19.1
Public Affairs 1.6 1.5
Programs 0.3 0.1
Regulatory Affairs 1.5 1.1
Human Resources 0.9 0.7
Total Operating Expenses 995.8 1,064.7
Amounts displayed in millions, $
10 Personnel by Department
The table below summarizes the actual personnel at the FY24 Budget Adoption and the full-time equivalent (FTE) personnel in the FY24 Amended Operating Budget. While personnel may be authorized, they must be filled. Detailed information showing filled and proposed FTE transfers by department is included in the following Section. Personnel budget is included within the Operations department.

FY24 Adopted FY24 Amended
Power Services 12.0 17.0
Finance 7.0 7.0
Operations 7.0 7.0
Data Analytics and Account Services 10.0 11.0
Public Affairs 9.0 11.0
Programs 7.0 9.0
Regulatory Affairs 4.0 5.0
Human Resources 3.0 3.0
Total FTEs 59.0 70.0
11 Budget by Department
Operations
Budget Amendment Highlights
• The largest professional services agreement in Operations is with Best Best & Krieger LLP at $450K for general counsel services which has been reduced to $170K since the onboarding of in-house General Counsel. • There is also a $1.5M reduction in Personnel costs due to slower than expected hiring.

Department Positions
FY24 Adopted FY24 Amended
Operations 7.0 7.0
Power Services
Budget Amendment Highlights
• Responsible for SDCP’s largest expense (Cost of Energy), the Power Services department is expected to grow its staff from 12 positions to 17 positions by the end of FY24. • $68K Reduction in Non-Energy Costs.
• Power Services department also has realized other revenues or cost reductions of $585K through contract negotiations.

Department Positions
FY24 Adopted FY24 Amended
Power Services 12.0 17.0
12 Finance
Department Highlights
• Finance Department had a $219K reduction in Budget.
• The Finance team will have a summer Intern, which is not considered an FTE. • $2M in interest earned has been realized by the Finance Department through December 2023.

Department Positions
FY24 Adopted FY24 Amended
Finance 7.0 7.0
Data Analytics and Account Services (IT)
Budget Amendment Highlights
• IT has been added to the department’s responsibilities for SDCP. • The BrenTech (IT Consultant) budget has increased per an amended contract approved by the Board in January 2024.

Department Positions
FY24 Adopted FY24 Amended
Data Analytics and Account Services 10.0 11.0
Public Affairs
Budget Amendment Highlights
• Continued outreach to educate the community of the benefits of community choice and to encourage awareness of our mission.
• Positions added to increase outreach efforts to SDCP member agencies.

Department Positions
FY24 Adopted FY24 Amended
Public Affairs 9.0 11.0
13 Programs
Budget Amendment Highlights
• Programs reallocated $195K from the operating budget into the CIP, which is a continuing fund outside of SDCP Operating Budget.
• Programs was awarded a California Department of Food and Agriculture (CDFA) grant, which recognized as an expense that will be recovered.

Department Positions
FY24 Adopted FY24 Amended
Programs 7.0 9.0
Regulatory and Legislative Affairs
Budget Amendment Highlights
• $397K Reduction in Department Budget.
• $100K is included as a loss litigation fund.

Department Positions
FY24 Adopted FY24 Amended
Regulatory and Legislative Affairs 4.0 5.0
Human Resources
Budget Amendment Highlights
• $155K Reallocation to Operations Department Budget
Department Positions
FY24 Adopted FY24 Amended
Human Resources 3.0 3.0

SAN DIEGO COMMUNITY POWER
Staff Report – Item 16
-------------------------------------------------------------------------------------------------------------------- To: San Diego Community Power Board of Directors
From: Eric Washington, Chief Financial Officer
Via: Karin Burns, Chief Executive Officer
Subject: Presentation on Clean Energy Prepayment Financing Date: February 22, 2024
--------------------------------------------------------------------------------------------------------------------

RECOMMENDATION
Receive and file presentation on clean energy prepayment financing.

BACKGROUND
On October 1, 2019, the Founding Members of San Diego Community Power (SDCP) adopted the Joint Powers Agreement (JPA) which was amended and restated on December 16, 2021.

Section 3.2.12 of the JPA specifies that the SDCP Board of Directors (Board) may at its discretion adopt rules, regulations, policies, bylaws, and procedures governing the operation of SDCP.

Further, section 3.2.7 of the JPA states that SDCP at the discretion of the Board may incur debts, liabilities, and obligations, including but not limited to loans from private lending sources pursuant to its temporary borrowing powers authorized by law pursuant to Government Code Section 53850 et seq. and authority under the Act.

Finally, section 3.2.8 of the JPA states that SDCP at the discretion of the Board may issue revenue bonds and other forms of indebtedness and per section 3.2.9 may apply for, accept, and receive all licenses, permits, grants, loans, or other aids from any federal, state, or local public agency.

Municipal electric, gas utilities, and tax-exempt entities such as community choice aggregators (CCAs) in the United States (US) can prepay for a supply of electricity or natural gas from a taxable (corporate) entity and fund that prepayment with tax-exempt municipal bonds. These entities must sell that commodity to retail end-users that reside within their traditional service area.

Prepayment transactions are legal and codified in US Tax Law. Since the first prepayments of natural gas were done in the early 1990’s, the Internal Revenue Service (IRS) issued rules allowing tax-exempt prepayments and Congress enacted legislation specifically allowing the transactions (National Energy Policy Act of 2005; Section 1327).

Since then, over 90 municipal prepayment transactions totaling over $50 billion have been completed in the US – over 95% of these were for natural gas since natural gas is easier to “prepay” because the commodity is homogenous and is easy to store.

Prepayments have saved utility ratepayers (natural gas, electricity from gas fired power plants and energy from renewable power projects) billions of dollars in reduced rates and energy charges and are anticipated to continue to do so over the 30-year life of the transactions.

ANALYSIS AND DISCUSSION
SDCP is interested in pursuing a similar prepayment transaction. A potential prepayment transaction offers the opportunity to reduce existing renewable energy Power Purchase Agreement (PPA) costs by 5-10% or $3 to $5 MWh (megawatt hour).

Central Coast Community Energy (3CE), for example, secured its first prepayment transaction on October 31, 2023. The $647.8 million bond issuance is projected to save 3CE customers 11.4% in energy costs, which translates to $32.9 million in the cost of energy over the initial seven-year period of the bonds.

COMMITTEE REVIEW
The report was reviewed by the Finance and Risk Management Committee (FRMC) on February 15, 2024.

FISCAL IMPACT
N/A

ATTACHMENTS
N/A

SAN DIEGO COMMUNITY POWER
Staff Report – Item 17
-------------------------------------------------------------------------------------------------------------------- To: San Diego Community Power Board of Directors
From: Xiomalys Crespo, Community Engagement Manager
Via: Karin Burns, Chief Executive Officer
Subject: Community Advisory Committee Report – Third Quarter Date: February 22, 2024
--------------------------------------------------------------------------------------------------------------------

RECOMMENDATION
Receive and file the Community Advisory Committee (CAC) quarterly report.

BACKGROUND
Per Section 5.10.3 of the San Diego Community Power (SDCP) Joint Powers Authority (JPA) Agreement:

At the direction of the Chair of SDCP’s Board of Directors, the CAC, via staff, shall provide quarterly updates during the regular meetings of the Board of Directors. The last quarterly update was provided on November 16, 2023.

ANALYSIS AND DISCUSSION
At the November 16, 2023 regular meeting of the Board of Directors, staff presented a summary of CAC activities from July through October. This report summarizes November through January.

November: At the November 9, 2023 regular CAC meeting, Vice-Chair Harris (La Mesa) chaired the meeting and welcomed new staff members Kiran Singh, Director of Data Analytics and IT, and Erin Hudak, Compliance Analyst. The CAC approved all department updates under the consent agenda and the Programs team updated and solicited feedback from members on its grant programs. The CAC also heard updates on the October activity of its Ad-Hoc Committees: the Programs Ad-Hoc Committee did not meet and the Community & Equity Ad-Hoc Committee set a new recurring date and time to ensure participation from most participants and began discussing the 2024 CAC Work Plan.

December: At the December 7, 2023 regular CAC meeting, members welcomed Board-appointed member Sandoval (City of Imperial Beach) as the newest member of the CAC, as well as SDCP’s new Contract Management Associate Isabella Krall. The CAC received department updates, which included a comprehensive report from the Regulatory and Legislative Affairs team on legislative activity over the last year. At the request of the Committee, members also received an update on the Local Distributed Infill Plan. The Programs team provided an update on Energy Education and Online Marketplace, in which staff guided members through currently active website content on electrification and the sustainability advantages of electrifying specific areas of customers’ homes.

The CAC also discussed and recommended that the Board of Directors approve SDCP’s Conflict of Interest and Ethical Conduct Policy by a unanimous vote. Members heard updates on the October activity of its Ad-Hoc Committees, which included providing feedback on SDCP’s Residential Solar & Battery Storage Program; discussing the need for program-specific ad-hoc committees to continue collaborating with staff in the development of offerings for SDCP customers; and discussing the draft 2024 CAC Work Plan as well as proposed changes to the CAC Scope of Work.

Lastly, the CAC voted to approve the 2024 CAC Meeting Calendar, which includes meetings taking place every second Wednesday of the month at the current meeting site, unless otherwise specified. The Committee will take a meeting recess in August 2024.

January: At the January 11, 2024 regular CAC meeting, members recognized and thanked former member Carolyn Scofield (City of Chula Vista) for her service in the CAC since May 2020, as well as staff members Patrick Welch, Senior Legislative Manager, and Elaine Mezta, Key Accounts Manager. The CAC approved all department updates under the consent agenda and heard a presentation on the 2024 Projected Rate Changes and SDPC’s Flex Load Strategy. The CAC also heard end of committee reports for its Programs Ad-Hoc Committee and its Community & Equity Ad-Hoc Committee. Following the reports, members formed the following ad-hoc committees:
• Community Grants Ad-Hoc Committee, through which Members Castañeda (National City), Harris (La Mesa), and Sclafani (Chula Vista) will meet to provide feedback on the criteria proposed for SDCP’s next round of Community Grant Program; and
• Power 100 Ad-Hoc Committee, through which Members Cazares (La Mesa), Hammond (Encinitas), Andersen (County of San Diego), Sandoval (Imperial Beach), and Castañeda (National City) will discuss strategies to support businesses and community-based organizations in opting up to Power 100.

The CAC discussed and recommended that the Board of Directors approve the CAC’s Scope of Work and Policies and Procedures by a unanimous vote, rounding up the meeting by receiving an update on the proposed 2024 CAC Work Plan.

Staff will return to the Board of Directors in the spring of 2024 to report on first quarter activities for 2024.

COMMITTEE REVIEW
N/A

FISCAL IMPACT
N/A

ATTACHMENTS
N/A

SAN DIEGO COMMUNITY POWER
Staff Report – Item 18
-------------------------------------------------------------------------------------------------------------------- To: San Diego Community Power Board of Directors
From: Aaron Lu, Senior Rates and Strategy Analyst
Stephen Gunther, Senior Regulatory Analyst
Via: Karin Burns, Chief Executive Officer
Subject: Approve Load Management Standards Compliance Plan Date: February 22, 2024
--------------------------------------------------------------------------------------------------------------------

RECOMMENDATION
Approve San Diego Community Power (SDCP) Load Management Standards (LMS) Compliance Plan.

BACKGROUND
On April 1, 2023, the California Energy Commission (CEC) adopted amendments to the LMS, which requires all large utilities and community choice aggregators (CCAs) to (1) develop retail electricity rates that change at least hourly and list of cost-effective load flexibility programs to better reflect grid costs and greenhouse gas (GHG) emissions and apply for approval by their governing board, (2) maintain up-to-date rates in CEC’s new central repository for rate information, Market Informed Demand Automation Server (MIDAS), and (3) establish public outreach and education to customers about time-dependent rates and automation technologies. For additional background on the development of the LMS amendments and SDCP staff engagement, please refer to the regulatory and legislative staff report from the July 2022 meeting of the Board of Directors (see page 71).

ANALYSIS AND DISCUSSION
LMS Compliance Plan Requirements
Each large utility and CCA must develop and submit a compliance plan to the CEC describing actions they will take to meet the goals of the LMS amendments. Specifically, publicly owned utilities and large CCAs may delay or modify compliance of each requirement if they can show that despite, good faith efforts, that requirement must be modified to provide a more cost-effective, equitable, technologically feasible, or safe pathway to achieve the LMS goals. The following table is a roadmap identifying each regulatory requirement and its due date.

LMS Section Regulatory Requirement Due Date
§1623.1(c) Within three months of regulation effective date, 4/1/2023, upload existing time-dependent rates to
the MIDAS database.
8/1/2023
§1623.1(a)(1) Within one year of regulation effective date, develop and submit compliance plan addressing
how SDCP plans to comply with LMS
requirements, and including evaluation of
marginal cost-based rates and programs, to
SDCP’s Board. The plan must be considered for
adoption within 60 days after submission.
4/1/2024
§1623.1(a)(3)(A) Submit compliance plan to the Executive Director of the CEC within 30 days of adoption of the plan.

Respond to requests for additional information
and/or recommendations within 90 days.
6/1/2024
§1623(c)(4) Within one year of regulation effective date, provide customers access to their Rate
Identification Numbers (RIN) on billing statements
and in online accounts using both text and QR.
4/1/2024
§1623(c)(2) Within 18 months of regulation effective date, develop and submit to the CEC, in conjunction
with the other obligated utilities, a single statewide
standard tool for authorized rate data access by
third parties, and the terms and conditions for
using the tool. Upon CEC approval, maintain and
implement the tool.
10/1/2024
§1623.1(b)(3) Within 18 months of regulation effective date, submit to the CEC Executive Director a list of load
flexibility programs deemed cost effective by
SDCP. The portfolio of programs must provide at
least one option to automate response to MIDAS
signals for each customer class where SDCP’s
Board has determined such a program would
materially reduce peak demand.
10/1/2024
§1623.1(a)(3)(C) Submit annual reports to the CEC Executive Director demonstrating implementation of plan, as
approved by SDCP’s Board.

Every year, starting
on 4/1/2025
§1623.1(b)(2) Within 27 months of the regulation effective date, submit at least one marginal cost-based rate to
SDCP’s Board for approval for any customer
class(es) where such a rate will materially reduce
peak load.
7/1/2025
§1623.1(b)(4) Within 51 months of the regulation effective date, offer customers voluntary participation in either a
marginal cost-based rate, if approved by SDCP’s
Board, or a cost-effective load flexibility program.
7/1/2027
§1623.1(b)(5) Conduct a public information program to inform and educate affected customers why marginal
cost-based rates or load flexibility programs and
automation are needed, how they will be used,
and how these rates and programs can save
customers money.

Ongoing,
dependent on
offerings
§1623.1(a)(1)(C) Review the plan at least once every 3 years after the plan is adopted and submit a plan update to
the Board if there is a material change.

Every 3 years
Compliance Plan Summary
SDCP’s Compliance Plan (Attachment A) addresses each of the LMS update requirements outlined above and evaluates the potential implementation impacts on SDCP’s operations and customers based on existing information.

SDCP firmly supports and aligns with the intent and goals of the LMS through its existing Community Clean Energy Grants Program and 100 Percent Renewable Energy by 2035 Policy. The Community Clean Energy Grants Program aims to support scalable, replicable clean energy pilot projects that promote load flexibility and management, energy resilience, and increased access to clean energy technologies. Through the 100 Percent Renewable Energy Policy, SDCP’s Board of Directors establishes a firm commitment to achieve 100 percent renewable energy by 2035, thus eliminating GHG emissions from SDCP’s power supply. SDCP is actively pursuing pathways to reduce system peak, stress on the grids, GHG emissions, and customer costs through programs and pilots.

SDCP’s Compliance Plan includes considerations of the specified marginal cost-based rate structures and programs and evaluates the rate structures and programs with respect to cost-effectiveness, equity, technological feasibility, and benefits to the grid and to customers. Based on SDCP’s evaluation, the conclusion is such that implementing complex new rate structures that change at least hourly by July 1, 2027 would not be cost effective nor result in material benefits to our customers or promote grid reliability at this time. The implementation of new and complex rate structures without review of pilot study results, sufficient testing, and refinement of the new rate designs would likely result in low customer adoption and/or confusion. In addition, SDCP’s evaluation cannot conclude that implementing new programs that allow for automated response to MIDAS signals would result in material benefits, to be cost-effective at this time.

Next Steps
SDCP describes the pathway and details of achieving LMS goals that are more cost-effective, customer oriented, and technologically feasible. SDCP staff will bring the Plan to SDCP’s Board of Directors for review and approval on February 22, 2024, and upon adoption, submit the compliance plan to the Executive Director of the CEC within 30 days.

SDCP will continue to offer time-variant rates that customers are familiar with and develop and implement load flexibility programs. SDCP will assess results from delayed SDG&E dynamic rate pilots to determine whether to implement dynamic rates. In parallel, SDCP is currently designing and will be implementing one or more demand flexibility program pilots to evaluate marginal cost-based programs. SDCP will also re-evaluate the specified rate and program designs in the next update of the Plan, informed by future pilot study results.

COMITTEE REVIEW
Update presented to Community Advisory Committee on February 8, 2024

FISCAL IMPACT
N/A

ATTACHMENTS
Attachment A: Draft Load Management Standards Compliance Plan 1 San Diego Community Power
Load Management Standard
Compliance Plan - DRAFT
February 22, 2024
2 Table of Contents

1. Executive Summary............................................................................................................................... 4

2. Introduction .......................................................................................................................................... 5

2.1 About SDCP ................................................................................................................................... 5

2.1.1 Community Clean Energy Grants Program ........................................................................... 6

2.1.2 SDCP’s 100 Percent Renewable Energy Policy...................................................................... 6

2.2 Load Management Standards....................................................................................................... 7

2.2.1 SDCP’s Compliance Plan Roadmap ....................................................................................... 7

2.2.2 SDCP’s Compliance Plan Administration............................................................................... 9

3. Access to Price Signals ........................................................................................................................ 10

3.1 Publication of Machine-Readable Rates in MIDAS ..................................................................... 10

3.1.1 Upload of Time-Dependent Rates....................................................................................... 10

3.1.2 Provide RINS to Customers................................................................................................. 11

3.1.3 Statewide RIN Access Tool .................................................................................................. 11

4. Dynamic Rates..................................................................................................................................... 12

4.1 Overview of Current Time-Dependent Rates ............................................................................. 13

4.1.1 Residential Rates................................................................................................................. 14

4.1.2 Non-Residential Rates......................................................................................................... 14

4.2 SDCP’s Rate Development Process............................................................................................. 15

4.2.1 Strategic Direction on Competitive Rates........................................................................... 15

4.2.2 Rate Design and Implementation ....................................................................................... 16

4.3 Evaluation of New Dynamic Rates.............................................................................................. 16

4.3.1 Cost-Effectiveness............................................................................................................... 16

4.3.2 Equity .................................................................................................................................. 22

4.3.3 Technological Feasibility ..................................................................................................... 23

4.3.4 Benefits to the Grid and Customers.................................................................................... 25

4.3.5 Compliance Approach......................................................................................................... 27

5. Load Flexibility Programs.................................................................................................................... 27

5.1 Overview of SDCP Load Flexibility Programs.............................................................................. 28

5.1.1 Residential Programs.......................................................................................................... 28 3 5.1.2 Managed Electric Vehicle Charging Programs.................................................................... 29

5.2 Evaluation of Programs............................................................................................................... 29

5.2.1 Cost-Effectiveness............................................................................................................... 29

5.2.2 Equity .................................................................................................................................. 32

5.2.3 Technological Feasibility ..................................................................................................... 32

5.2.4 Benefits to the Grid and Customers.................................................................................... 33

5.2.5 Compliance Approach......................................................................................................... 34

6. Public Information Program................................................................................................................ 34

6.1 SDCP’s Communication Approach .............................................................................................. 35

6.2 Current Outreach and Marketing ............................................................................................... 35

6.3 Compliance Approach................................................................................................................. 36

7. Delay and Modification of Compliance Requirements....................................................................... 36

7.1 Providing RINs to Customers ...................................................................................................... 36

7.2 Statewide RIN Access Tool.......................................................................................................... 37

7.2.1 Development of Statewide Tool ......................................................................................... 37

7.2.2 Implementation of Statewide Tool ..................................................................................... 37

7.3 Dynamic Rates............................................................................................................................. 37

7.4 Dynamic Response Load Flexibility Programs............................................................................. 38

7.4.1 Identification of Cost-Effective Load Flexibility Programs.................................................. 38

7.4.2 Voluntary Participation in Cost-Effective Load Flexibility Programs...................................39 Appendix A.................................................................................................................................................. 40 4 1. Executive Summary
Since 1974, the California Energy Commission (“CEC”) held the authority to establish and revise the Load Management Standards (“LMS”). On April 1, 2023, the CEC adopted amendments to the LMS, which require all large utilities and community choice aggregators (“CCAs”) to provide dynamic electricity rates in a format that can be shared and communicated with smart devices or service providers. The updated standards aim to assist customers to take better advantage of time-dependent rates, with the goal of decreasing overall costs by shifting energy use from peak to non-peak time periods. In addition, any technological and behavior changes, resulting from the LMS revisions, slow the rise of future energy costs, increase grid reliability, reduce the need for building more conventional power plants, and avoid transmission and distribution congestion.

The updated standards require all large publicly- and investor-owned utilities and Large1 CCAs to (1) develop retail electricity rates that change at least hourly and list of cost-effective load flexibility programs to better reflect grid costs and greenhouse gas (“GHG”) emissions and apply for approval by their governing board, (2) maintain up-to-date rates in CEC’s new central repository for rate information, Market Informed Demand Automation Server (“MIDAS”), and (3) establish public outreach and education to customers about time-dependent rates and automation technologies.

Each utility and CCA must develop and submit a compliance plan describing actions taken to meet the requirements of the LMS amendments. Specifically, publicly owned utilities and large CCAs may delay or modify compliance of each requirement if they can show that despite, good faith efforts, that requirement must be modified to provide a more cost-effective, equitable, technologically feasible, or safe pathway to achieve the LMS goals.

San Diego Community Power (“SDCP”) firmly supports and aligns with the intent and goals of the LMS through its Community Clean Energy Grants Program2 and 100 Percent Renewable Energy by 2035 Policy.3 The Community Clean Energy Grants Program aims to support scalable, replicable clean energy pilot projects that promote load flexibility and management, energy resilience, and increased access to clean energy technologies. Through the 100 Percent Renewable Energy Policy, SDCP’s Board of Directors establishes a firm commitment to achieve 100 percent renewable energy by 2035, thus eliminating GHG emissions from SDCP’s power supply. SDCP is actively pursuing pathways to reduce system peak, stress on the grids, GHG emissions, and customer costs through programs and pilots.

SDCP’s compliance plan (“Plan”) includes considerations of the specified marginal cost-based rate structures and programs, as described in the LMS requirements, 4 and evaluates the rate structures and
1 Large CCAs are defined as any CCA that provides in excess 700 GWh of electricity to customers in any calendar year.
2 San Diego Community Power Community Clean Energy Grants Policy, December 15, 2022, 2022-13-Community-Grant-Program-Policy.pdf (sdcommunitypower.org). 3 San Diego Community Power 100 Percent Renewable Energy by 2035 Policy, March 23, 2023, Item-12b-SDCP-100-Renewable-Energy-by-2035-Policy-c1.pdf (sdcommunitypower.org). 4 Barclays Official California Code of Regulations, § 1623.1. Large POU and Large CCA Requirements for Load Management Standards, April 1, 2023, View Document - California Code of Regulations (westlaw.com). 5 programs with respect to cost-effectiveness, equity, technological feasibility, and benefits to the grid and to customers.

Based on SDCP’s evaluation, the conclusion is such that implementing complex new rate structures that change at least hourly by July 1, 2027 would not be cost effective nor result in material benefits to our customers or promote grid reliability at this time. The implementation of new and complex rate structures without review of pilot study results, sufficient testing, and refinement of the new rate designs would likely result in low customer adoption and/or confusion. In addition, SDCP’s evaluation cannot conclude that implementing new programs that allow for automated response to MIDAS signals would result in material benefits, to be cost-effective at this time.

SDCP describes the pathway and details of achieving LMS goals that are more cost-effective, customer oriented, and technologically feasible. SDCP will continue to offer time-variant rates that customers are familiar with as well as develop and implement load flexibility programs. SDCP will reevaluate the specified rate and program designs in the next update of the Plan, informed by future pilot study results.

SDCP’s Plan was presented and submitted to SDCP’s Board of Directors (“Board”) within one year of the adoption of LMS amendments on April 1, 2023. The Plan was adopted by the Board in a duly noticed meeting on February 22, 2024, and this decision was made by SDCP’s Board acting as its rate-approving body. SDCP will review the Plan every three years following adoption, and material Plan updates will be submitted to the Board for approval. This Plan will be filed with the CEC by April 1, 2024.

2. Introduction

2.1 About SDCP
SDCP is a Joint Powers Authority (“JPA”) formed by the communities of Chula Vista, Encinitas, Imperial Beach, La Mesa, and San Diego in October 2019. In November 2021, SDCP’s founding member agencies were joined by National City and the unincorporated areas of San Diego County. As a JPA, SDCP is a local government agency and is governed by a seven-member Board of Directors composed of elected representatives of its member local agencies. Through these representatives, SDCP is controlled by and accountable to the communities SDCP serves. SDCP provides retail electric generation services and complementary energy programs to customers within the municipal boundaries of its member local governments.

SDCP was formed to empower its member communities to choose the generation resources that reflect their individual values and needs. SDCP was established to procure and develop electrical energy for customers in participating jurisdictions, address climate change by reducing energy-related greenhouse gas emissions, promote electrical rate price stability and affordability, and foster local economic benefits such as job creation, local energy programs, and local power development while prioritizing equity.

SDCP commenced retail electric service to its first phase of customer enrollments in March 2021. As of April 2024, SDCP will successfully have completed its planned phase-in activities of all its member agencies. SDCP is currently serving approximately 930,000 service accounts, equal to approximately 670 gigawatt hours (“GWh”) of energy consumption per month.

At service launch to customers, SDCP’s Board approved a minimum 50 percent renewable energy supply portfolio for all participating customers, with a 100 percent renewable retail service option available on a voluntary basis. These retail service offerings have been named “PowerOn” and “Power100,” 6 respectively. The minimum quantity of renewable energy delivered to SDCP customers is expected to increase over time, moving to 85 percent by 2030.

2.1.1 Community Clean Energy Grants Program
On December 15, 2022, adopted through Board of Directors’ approval of Policy Number 2022-135, SDCP established a grants program aimed to support scalable, replicable clean energy pilot projects that provide economic, environmental, and health benefits to local communities and increase overall energy literacy of SDCP customers. Enabling load flexibility is addressed by three of the program’s five focus areas, including:
• Energy behaviors that reduce energy consumption and/or costs. • Energy resilience to ensure communities can avoid, prepare for, minimize, adapt to, and recover from energy disruptions.
• Increased access to the benefits of clean energy technologies with a focus on underserved communities and vulnerable populations.

In June 2023, grants totaling $390,000 were awarded to ten organizations. SDCP expects to receive progress updates from the organizations periodically.6 The program will run annually, and the next submission cycle will open in early 2024.

2.1.2 SDCP’s 100 Percent Renewable Energy Policy
On March 23, 2023, adopted through Board of Directors’ Resolution 2023-03, SDCP’s 100 Percent Renewable Energy by 2035 Policy commits SDCP to achieving 100 percent renewable energy for its generation energy supply by 2035. The policy commits SDCP’s Chief Executive Officer to take all operational actions necessary to achieve this target. Annually, SDCP shall review progress towards this target at a Board meeting. As SDCP ramps up its energy supply towards 100 percent renewable energy, the organization is also committed to continue promoting electrical rate price stability and affordability and fostering local economic benefits.

Currently, SDCP is actively negotiating the offtake of renewable power from long-term projects of multiple technologies. Promoting the construction of renewable energy projects, in culmination with battery energy storage systems, will help with grid reliability as well as decreasing green-house-gas emissions that would be otherwise produced via conventional power generation. Current portfolio content is such that after providing 100 percent RPS for Power100 customers, PowerOn is tracking towards serving customers with 75 percent RPS by 2027. SDCP’s contracting of long-term renewable projects will allow SDCP to achieve the Board target of 100 percent renewable by 2035, and price negotiating efforts will allow SDCP to forecast portfolio price impacts. 5 San Diego Community Power, Community Grants Program Policy, https://sdcommunitypower.org/wp-content/uploads/2023/02/2022-13-Community-Grant-Program-Policy.pdf. 6 San Diego Community Power Community Clean Energy Grants Award Press Release, July 26, 2023,

23.07.26.SDCP_.SDF_.PressReleaseFinal.pdf (sdcommunitypower.org). 7 2.2 Load Management Standards
The central focus of CEC’s LMS Rulemaking is to encourage customers to shift electricity use from peak times of day when it is expensive and polluting to cheaper and cleaner off-peak times of the day.

According to the Public Resources Code, section 25132, load management is defined as “any utility program or activity that is intended to reshape deliberately a utility’s load duration curve”. Load management reduces the need for new electrical generation and backup generation, thus lowering customer energy costs, and is a key strategy to ensure grid reliability and resilience, distributed energy resources integration, and GHG emissions reduction.

The CEC adopted the LMS amendments through a rulemaking on April 1, 2023, and the amendments require publicly- and investor-owned utilities and Large CCAs to offer customers access to rate-structures and programs that provide the information needed to manage and optimize their energy use.

Specifically, the revisions require development of marginal cost-based rates or load flexibility programs.

LMS defines marginal cost as the change in current and future electric system cost that is caused by a change in electricity supply and demand during a specified time interval at a specified location. 7 Total
marginal cost is calculated as the sum of the marginal energy cost, the marginal capacity cost (generation, transmission, and distribution), and any other appropriate time and location dependent marginal costs, including the locational marginal cost of associated greenhouse gas emissions, on a time interval of no more than one hour.

In this Plan, SDCP uses the term dynamic rates to reflect responding to these marginal cost signals on an hourly or sub-hourly basis. Being a CCA, SDCP is authorized and responsible for setting and recovering only the generation cost components for each applicable electric rate. San Diego Gas and Electric (“SDG&E”), the investor-owned utility for the San Diego service area, is responsible for setting distribution, transmission, and any other non-generation cost components for each rate.

2.2.1 SDCP’s Compliance Plan Roadmap
Adopted LMS amendments section 1623.1(c) requires SDCP, along with the other utilities and Large CCAs, to develop and submit a compliance plan in response to meeting the revised LMS requirements.

The following table is a roadmap identifying where each regulatory requirement, along with the due date, is addressed within SDCP’s compliance plan.

LMS Section Regulatory Requirement Due Date Plan Section §1623.1(c) Within three months of regulation effective date, 4/1/2023, upload existing time-dependent rates
to the MIDAS database.8
8/1/2023 3.1
§1623.1(a)(1) Within one year of regulation effective date, develop and submit compliance plan addressing
how SDCP plans to comply with LMS
4/1/2024 2.2.2.1
7 Energy cost computations shall reflect locational marginal cost pricing as determined by the associated balancing authority, such as the Los Angeles Department of Water and Power, the Balancing Authority of Northern California, or other balancing authority. Marginal capacity cost computations shall reflect the variations in the probability and value of system reliability of each component (generation, transmission, and distribution). 8 On June 1, 2023, the CEC issued Order No. 23-0531-10 in response to a request for extension from the IOUs and Large CCAs. The Order approved an extension for CCAs to upload time-dependent generation rates by August 1, 2023, and remaining time-depending rates with rate modifiers by October 1, 2023. 8 requirements, and including evaluation of
marginal cost-based rates and programs, to
SDCP’s Board. The plan must be considered for
adoption within 60 days after submission.
§1623.1(a)(3)(A) Submit compliance plan to the Executive Director on the CEC within 30 days of adoption of the plan.

Respond to requests for additional information
and/or recommendations within 90 days.
6/1/2024 2.2.2.2
§1623(c)(4) Within one year of regulation effective date, provide customers access to their Rate
Identification Numbers (“RIN”) on billing
statements and in online accounts using both text
and QR.
4/1/2024 3.1.2
§1623(c)(2) Within 18 months of regulation effective date, develop and submit to the CEC, in conjunction
with the other obligated utilities, a single
statewide standard tool for authorized rate data
access by third parties, and the terms and
conditions for using the tool. Upon CEC approval,
maintain and implement the tool.
10/1/2024 3.1.3
§1623.1(b)(3) Within 18 months of regulation effective date, submit to the CEC Executive Director a list of load
flexibility programs deemed cost effective by
SDCP. The portfolio of programs must provide at
least one option to automate response to MIDAS
signals for each customer class where SDCP’s
Board has determined such a program would
materially reduce peak demand.
10/1/2024 5.2.5.1
§1623.1(a)(3)(C) Submit annual reports to the CEC Executive Director demonstrating implementation of plan,
as approved by SDCP’s Board.

Every year,
starting on
4/1/2025

2.2.2.4 §1623.1(b)(2) Within 27 months of the regulation effective date, submit at least one marginal cost-based rate
to SDCP’s Board for approval for any customer
class(es) where such a rate will materially reduce
peak load.
7/1/2025 4.3.5
§1623.1(b)(4) Within 51 months of the regulation effective date, offer customers voluntary participation in
either a marginal cost-based rate, if approved by
SDCP’s Board, or a cost-effective load flexibility
program.
7/1/2027 4.3.5 and

5.2.5.2 §1623.1(b)(5) Conduct a public information program to inform and educate affected customers why marginal
cost-based rates or load flexibility programs and
automation are needed, how they will be used,
and how these rates and programs can save
customers money.

Ongoing,
dependent
on offerings

6.3 9
§1623.1(a)(1)(C) Review the plan at least once every 3 years after the plan is adopted and submit a plan update to
the Board if there is a material change.

Every 3 years 2.2.2.3

2.2.2 SDCP’s Compliance Plan Administration

2.2.2.1 Plan Development and Board Approval Process
Adopted LMS amendments section 1623.1(a) requires each Large CCA to submit a compliance plan consistent with the applicable requirements of the LMS, as well as actions taken to meet those requirements to its rate-approving body. The compliance plan must be submitted within one year of the regulation effective date, or by April 1, 2024, and must be considered for adoption by the rate-approving body in a duly noticed public meeting within 60 days of submission.

This Plan meets the requirements of section 1623.1(a). The Plan was submitted to the Board prior to April 1, 2024, and presented to SDCP’s Board at a duly noticed meeting on February 22, 2024. SDCP’s Board approved this Plan. The description of how SDCP complies with each element of the regulatory requirements of the LMS amendments is provided in the subsequent sections of this Plan.

2.2.2.2 CEC Review Process
Adopted LMS amendments section 1623.1(a)(3) specifies that, upon adoption by the Large CCA rate approving-body, the plan must be submitted to the CEC Executive Director within 30 days for review.

SDCP’s Board is the sole authority to approve rates and in this regulatory proceeding, the CEC’s role is limited to determining whether this adopted Plan complies with the regulation.

Following the Plan’s presentation and adoption by SDCP’s Board on February 22, 2024, the Plan will be submitted to the CEC by April 1, 2024 for review. Any requests for additional information or recommended changes will be addressed, and a written response submitted to the CEC within 90 days as required in the regulation.

2.2.2.3 Triennial Plan Review
Adopted LMS amendments section 1623.1(a)(1)(C) requires each Large CCA to review its compliance plan at least once every three years. The CCA must submit a plan update to its rate-approving body where there is a material change to the factors considered in evaluating marginal cost-based rates and programs. Material revisions to the plan shall follow the same process as the initial plan approval.

This Plan will be reviewed by SDCP every three years following the date of adoption and material updates will be submitted to SDCP’s Board for approval. Subsequently, this Plan and any approved material updates will be duly submitted to the CEC.

2.2.2.4 Annual Reporting
Adopted LMS amendments section 1623.1(a)(3)(C) requires each Large CCA to submit to demonstrate implementation of its LMS compliance plan through a submission to the CEC Executive Director. Each Large CCA must submit the initial report one year after adoption of the plan by the CCA’s rate-approving body, and annually thereafter.

SDCP will timely submit annual reports to the CEC Executive Director describing the implementation of this Plan.
10 3. Access to Price Signals

3.1 Publication of Machine-Readable Rates in MIDAS
The CEC developed the MIDAS database, as part of the LMS revisions, so customers and automation service providers can link flexible loads to a machine-readable database of rates and other grid signals to automate demand flexibility. The LMS amendments require the utilities and Large CCAs to populate utility rate information into MIDAS and to facilitate access to MIDAS signals for customers and their authorized third parties. This section of the Plan details SDCP’s planned actions to meet this requirement.

3.1.1 Upload of Time-Dependent Rates
Adopted LMS amendments section 1623.1(c) requires each Large CCA to upload existing time-dependent rates to the MIDAS database within three months of the regulation effective date, or by July 1, 2023. On June 1, 2023, the CEC issued Order No. 23-0531-109 in response to a request for extension from the IOUs and Large CCAs. The Order approved an extension for CCAs to upload time-dependent generation rates by August 1, 2023, and remaining time-depending rates with rate modifiers by October 1, 2023. Each uploaded rate must be assigned a RIN, which is used to uniquely identify each rate. The MIDAS database will provide information about the rate and any associated marginal signals to which the customer may automate response for each associated RIN.

Large CCAs are also required to upload any new time-dependent rates or changes to existing rates, prior to the effective date of that rate. All uploaded time-dependent rates must include all applicable time-dependent cost components.

3.1.1.1 Existing Rates Upload
On August 1, 2023, SDCP successfully uploaded 180 rate permutations of time-dependent rates, including residential and non-residential customer classes. A list of those current time-dependent rates and corresponding RINs can be found in Appendix A.

A message confirming successful upload was returned for each rate file loaded to MIDAS. SDCP also performed random retrieval of rates as a second point of confirmation to the successful rate upload and to validate accuracy of rates recorded in MIDAS. In addition, SDCP sent a confirmation of successful MIDAS upload email to CEC staff on August 1, 2023, and received acknowledgement from the CEC’s MIDAS Lead contact on August 2, 2023.

On October 1, 2023, SDCP successfully uploaded the corresponding 180 rate permutations of time-dependent rates for SDCP’s 100 percent renewable retail service option, “Power100”. SDCP received acknowledgement from CEC’s Lead contact on October 5, 2023, of confirmation of successful additional MIDAS upload. SDCP coordinated with its vendor to upload any new time-dependent rates or changes to existing rates, that became effective on February 1, 2024.

3.1.1.2 Future Rates Upload
Going forward, SDCP will upload existing rates as needed, to reflect any rate changes, and any new time-dependent rates or rate components. SDCP will follow a similar process to the successful existing rate 9 California Energy Commission, Order No. 23-0531, June 1, 2023, https://efiling.energy.ca.gov/GetDocument.aspx?tn=250450&DocumentContentId=85205. 11 uploads in 2023. SDCP will create rate files in csv format, convert them to XML format and load them to MIDAS through the application programming interface.

3.1.2 Provide RINS to Customers
Adopted LMS amendments section 1623(c)(4) requires each Large CCA to provide customers access to their RIN(s) on customer billing statements and online accounts using both text and quick response (“QR”) or similar machine-readable digital code. This access must be provided within one year of the regulation effective date, or by April 1, 2024.

3.1.2.1 Implementation Plan
SDCP partners with SDG&E, the local investor-owned utility in the service area, to serve electricity charges to customers through either a paper and/or an electronic bill statement. The bill is the standard presentation of electricity billing statements to customers. Customers also have access to billing statements through their protected on-line SDG&E accounts.

SDCP plans to make the RINs available in text and QR formats on billing statements on or before April 1, 2024. This will allow customers to access their RIN on the billing statement received by mail or accessed online. SDG&E has significant control of both paper and electronic billing statement designs, therefore SDCP’s compliance with section 1623(c)(4) is dependent on successful coordination with SDG&E. SDCP, through its contracted back-office vendor, is coordinating with SDG&E to implement the RINs, both in text and QR formats, by April 1, 2024. RINs are standardized to include country, state, distribution, energy, rate, and location information. RINs are also based on customer energy providers, pricing plans, locations, and other account considerations, such as participation in assistance and/or solar programs and pricing plan(s) changes.

SDCP customers will see two RINs, one for the CCA-associated component(s) of their bill pertinent to their generation rates and another for the SDG&E-associated component(s) of their bill related to transmission and distribution rates. There may be multiple RINs for customers with group bills and corrected billing.

3.1.3 Statewide RIN Access Tool
Adopted LMS amendments section 1623(c) requires utilities and Large CCAs to collaboratively develop a single statewide standard tool for authorized rate data access by third parties, along with a single set of terms and conditions for third parties using the tool. The tool must meet all the following requirements:
• Provide the RIN(s) for the rate(s) applicable to a customer’s premise. • Provide any RIN(s) for the rate(s) to which the customer is eligible to be switched. • Provide estimated average or annual bill amounts based on the customer’s current rate and any other rate(s) for the customer is eligible to be switched if such calculation tools already exist. • Enable authorized third parties, upon direction and consent of the customer, modify the customer’s applicable rate, to be reflected in the next billing cycle.

The tool must also incorporate reasonable and applicable cybersecurity measures, minimize enrollment barriers, and be accessible in a digital, machine-readable format according to industry best practices and 12 standards. The tool must be submitted to the CEC for approval within 18 months of the regulation effective date, or by October 1, 2024. After CEC approval, the utilities and Large CCAs must collaboratively implement and maintain the tool.

3.1.3.1 Statewide Tool Development
SDCP has already started to and will continue to collaborate with the utilities and other Large CCAs to meet the regulatory requirements by October 1, 2024.

At the time of this filing, SDCP had already started internal planning and committed staff to join the working group to collaborate with other parties. SDCP continues to assess its internal infrastructure needs and business requirements in the working group discussions and future work. SDCP participated in a working group meeting held on September 20, 2023, and is currently awaiting input from the other parties about the scope, funding, and coordination for the project. SDCP is coordinating with SDG&E to perform two phases to develop and implement the statewide tool, targeting for customer data access by the end of Phase 1 and for customers and/or authorized third parties to access rate information, eligible rates, estimated bill, and pricing plan enrollment by the end of Phase 2.

3.1.3.2 Statewide Tool Implementation
SDCP’s internal infrastructure must be updated to integrate and support the final approved statewide tool.

SDCP is unable to specifically identify the full scope of integration efforts needed until the final tool is designed and approved by the CEC. Concurrent with the development process, however, SDCP is reviewing its internal infrastructure and scheduling budget requests. Implementation projects will be added to SDCP’s annual work prioritization queue. While SDCP anticipates complying with this requirement, any delays in development of the tool could result in implementation delays. Similarly, if the costs of integrating the tool result in an undue hardship to SDCP or its customers, SDCP may seek to delay or modify compliance with this requirement.

4. Dynamic Rates
The adopted LMS amendments identify dynamic hourly or sub-hourly rates as a central tool and are critical to encourage shifting peak energy-use, controlling daily and seasonal peak loads, lessening, or delaying the need for new electrical capacity, and reducing fossil fuel consumption and associated GHG emissions.

Adopted LMS amendments section 1623.1(b)(2) directs the Large CCAs to seek approval from their Boards for at least one dynamic rate for each customer class for which its rate-approving body determines such rate will materially reduce peak load. The application must be submitted within 27 months of the regulation effective date, or by July 1, 2025. In accordance with section 1623.1(b)(4), approved rates must be implemented 24 months following any Board rate approvals, or by July 1, 2027.

Adopted LMS amendments section 1623.1(a)(1) requires each Large CCA to evaluate the cost effectiveness, equity, technological feasibility, and benefits to the grid and customers, of dynamic rates for each customer class in its compliance plan. After evaluating such rates, the Large CCA may instead propose and evaluate specified programs and/or delay or modify compliance with the LMS requirements.
13 The following section of SDCP’s Plan provides an overview of SDCP’s current time-dependent rates, describes SDCP’s rate development process, and addresses the requirement to evaluate the implementation of dynamic rates on the timeframes specified in the LMS.

4.1 Overview of Current Time-Dependent Rates
SDCP’s portfolio of time-dependent rates include at least one marginal cost-based time-dependent rate for nearly every customer class. SDCP has five customer classes: residential, small commercial, medium/large commercial, agriculture, and lighting. Apart from lighting and unmetered customers, all customers have access to Time-of-Use (“TOU”) rates and 84% of SDCP customers are on TOU rates.

Please see the following table for details on SDCP’s rates by customer class and percent of customers in that customer class on TOU rates.

Customer Class Available Rates10 % on TOU Rates
Residential TOU:
- DR-SES
- EV-TOU, EV-TOU-2, EV-TOU-5
- TOU-DR, TOU-DR-1, TOU-DR-2
- TOU-ELEC
Non-TOU:
- DR
- DR-LI-MB (CARE/FERA/Medical Baseline)
83%
Small
Commercial
TOU:
- TOU-A (Primary or Secondary)
- TOU-A-2 (Primary or Secondary)
- TOU-A-3 (Primary or Secondary)
- TOU-M
Non-TOU:
- A-TC (Traffic Control Service)
- E-LI-NR (CARE/FERA for TOU-A, TOU-A-2,
TOU-A-3, TOU-M)
96% (100% if excluding A-TC, Traffic Control Service
accounts)
Medium/Large
Commercial
TOU:
- A6-TOU (Primary, Secondary or
Transmission)
- AL-TOU (Primary, Secondary or
Transmission)
- AL-TOU-2 (Primary, Secondary or
Transmission)
- EV-HP (Primary or Secondary)
- DG-R (Primary, Secondary or Transmission)
Non-TOU:
- E-LI-NR (CARE/FERA for AL-TOU, AL-TOU-2,
DG-R)
- OL-TOU
96%
Agriculture TOU: 100%
10 SDCP has additional rate variants including legacy grandfathered rates and less than 20kW or 20kW or greater versions of rates.
14 - PA-T-1 (Primary, Secondary or
Transmission)
- TOU-PA (Primary or Secondary)
- TOU-PA-2 (Primary or Secondary)
- TOU-PA-3 (Primary or Secondary)
Lighting TOU:
- LS-2-AD
Non-TOU:
- LS
- OL-2
0% (96% of lighting accounts
are unmetered)
SDCP’s is also developing load flexibility programs that incorporate time-varying marginal cost-based signals, some of which test response to different price signals, in addition to time-dependent rates to encourage customer peak load shift. The following section of the Plan provides a summary of SDCP’s currently available time-dependent rates.

4.1.1 Residential Rates
SDCP’s TOU-DR is the standard rate for residential customers. Residential customers pay different rates depending on the season, day, and hours of energy use, summarized in the table below. These time periods were selected because they best aligned with highest peak loads and marginal electricity prices, while also being simple and easy for customers to understand.

Time-Of-Use Periods Summer Months (June 1 through
October 31)
Winter Months (November 1 through
May 31)
On-Peak 4 pm – 9 pm 4 pm – 9 pm
Off-Peak weekdays 6 am – 4 pm and 9 pm –
12 am, weekends and holidays 2
pm – 4 pm and 9 pm to 12 am
weekdays 4 am – 4 pm (excluding 10
am – 2 pm in March and April) and 9
pm – 12 am, weekends and holidays 2
pm – 4pm and 9 pm to 12 am
Super Off-Peak weekdays 12 am – 6 am, weekends
and holidays 12 am – 2pm
weekdays 12 am – 6 am (excluding 10
am – 2 pm in March and April),
weekends and holidays 12 am – 2pm
SDCP’s other TOU rates provide options for customers in terms of difference in peak, off-peak, and super off-peak periods to shift energy use. SDCP enrolled residential customers onto its TOU rates in the first half of 2022 during phase 3 of enrollment. The high adoption and retention of residential TOU rates has benefited both SDCP and customers.

SDCP’s EVTOU is the standard rate for residential customers that charge their EVs at home. This rate encourages customers to charge their EVs during super off-peak times when energy is abundant and energy prices are low.

4.1.2 Non-Residential Rates
SDCP’s TOU-A is the standard rate for small commercial customers. SDCP’s AL-TOU is the standard rate for medium/large commercial customers. SDCP’s TOU PA is the standard rate for agriculture customers.

All these rates are similar in concept to residential TOU rates, except the rate periods differ. Non- 15 residential customers have been offered TOU rates for a much longer time compared to residential customers.

4.2 SDCP’s Rate Development Process

4.2.1 Strategic Direction on Competitive Rates
Adopted by the Board on November 17, 2022, the Rate Development Policy11 guides SDCP’s rate development process. The policy provides a framework to ensure SDCP’s rate design, development, and implement processes remain transparent, fiscally responsible, and centered on the customer. The policy includes the following objectives:
• Cost Recovery: rates must be sufficient to recover all expenses, debt service and other expenditure requirements.
• Reserves: rates must be sufficient to build prudent reserves. • Rate Competitiveness and Customer Value: rates must allow SDCP to successfully compete to retain and attract customers while offering superior electricity service offerings with higher renewable content compared to the incumbent investor-owned utility. • Rate Stability: rate changes should be minimized to reduce customer bill impacts with a preference for annual rate adjustments.
• Equity among customers: rate difference among customers should be justified by differences in usage characteristics and/or cost of service. Additionally, to the extent possible, rates shall be equalized from a value proposition perspective among customers enrolled during different Power Charge Adjustment Indifference (“PCIA”) Vintage Years. • Rate Structures: as new rates are developed; emphasis shall be put on rate-design simplicity and comparability as well as overall customer experience.
• Transparency: SDCP’s Board will review and approve rates at an open and public meeting held in accordance with the Ralph M. Brown Act. SDCP shall post a copy of the adopted rates in both English and Spanish on its website within 14 calendar days of approval or by the rates’ effective date, whichever is sooner. SDCP shall also make any rate design documents promptly available upon request under the California Public Records Act.
• Cost Shifting: SDCP shall avoid, to the best of its ability, cost shifting between customer classes. • Cost of Service: SDCP may explore a cost-of-service model for rate design.

When designing rates, SDCP must balance all the above competing objectives, many of which are reflected in the LMS revisions’ goals. As a public not-for-profit agency, SDCP designs and implements rates that meet revenue requirements as well as targeted reserves, while maintaining rate competitiveness, stability, and long-term financial viability. While SDCP understands the need to 11 San Diego Community Power Rate Development Policy, https://sdcommunitypower.org/wp-content/uploads/2023/01/Item-12a_Rate-Development-Policy.pdf. 16 develop and implement dynamic rates, SDCP emphasizes the customer experience, such as ensuring the rate development process is transparent and rates are easy to understand, as well as minimize rate changes.

4.2.2 Rate Design and Implementation
Aligned with objectives of the Rate Development Policy, SDCP takes deliberate measures to ensure that any new rate development and implementation will be successful, effective, and accepted by its customers. These proactive measures may include:
• Conducting pilots to determine the effectiveness of different rate options and reception by customers.
• Developing and implementing iterative outreach and education campaigns. • Developing and implementing new education tools, such as rate comparison tools and reports.

After rate implementation, SDCP is committed to monitoring the effectiveness of the rate with respect to shifting peak load and customer feedback.

4.3 Evaluation of New Dynamic Rates
Consistent with the adopted LMS amendments, the following section of the Plan evaluates the cost-effectiveness, equity, technological feasibility, and benefits of dynamic rates for each customer class.

SDCP assumes that these new dynamic rates would be implemented on the schedule specified in the LMS amendments, which includes applying for Board approval of dynamic rates by July 1, 2025, and offering voluntary participation in those rates to all customers by July 1, 2027, where such a rate is determined to materially reduce peak load cost effectively.

SDCP’s does not have sufficient information at this time to conclude that proposing and implementing dynamic rates following the adopted LMS amendments’ schedule would be cost effective or provide incremental benefits. Significant uncertainties exist related to a gap in dynamic rate pilot evaluation results and data in SDCP’s and SDG&E’s service area, the level of incremental load shift potential, customer response to market price risks, and customer acceptance of a complex new rate design. Based on the results of this evaluation, SDCP plans to defer the proposal and adoption of new dynamic rates at this time. SDCP will re-evaluate dynamic rates with the benefit of additional information from dynamic rate pilots in SDCP’s and SDG&E’s service area and other service areas in the next update of this Plan.

4.3.1 Cost-Effectiveness
Adopted LMS amendments section 1623.1(a)(1)(A) specifies cost effectiveness as the first evaluation factor. SDCP strives to qualitatively estimate the costs and benefits to customers, that are associated with new dynamic rates for each rate class. This approach is necessary because, as of the time of the preparation of this Plan, SDCP does not have data to support a full quantitative analysis.

To assess cost effectiveness, it is necessary to consider the costs associated with designing, implementing, and maintaining new rates for each customer class, as well as the ongoing benefits associated with implementation. To demonstrate cost effectiveness, the expected benefits for each rate must exceed the costs of implementation.
17 As best practice for assessing the cost effectiveness of a new rate, SDCP would conduct a comprehensive pilot study to test and gather data on different rate options, which would likely require several years and a multi-million-dollar investment. Forming in 2019, SDCP is still a relatively young organization and has been limited in terms of developing rate options and has been prioritizing building a strong foundation as a customer-centric organization. Thus, SDCP has not had the sufficient time nor resources to pilot multiyear and multi-million-dollar rate pilots. SDCP plans to evaluate the effectiveness of dynamic rate options based on information gathered across the state from ongoing and proposed dynamic rate pilots.

SDG&E’s proposed dynamic rate pilots would have provided the more accurate estimated costs and benefits compared to pilots in other service territories because weather conditions, local economy, and local energy policies, and other factors that are captured by SDG&E’s pilot overlap with SDCP’s conditions. However, SDG&E proposed two dynamic rate pilots through Applications 21-12-006 and 12- 12-008 to the California Public Utilities Commission (“Commission”), but the import rate pilot was dismissed without prejudice and the other pilot delayed and will be refiled once the Commission issues a final decision in the Demand Flexibility Rulemaking that will provide guidance for dynamic rate applications.12 As a result of the factors above, SDCP’s cost-effectiveness evaluation is based on qualitative assessments and SDCP anticipates exploring opportunities to expand data access and/or refine estimates to inform future updates of the Plan.

4.3.1.1 Estimated Costs
Significant investment in planning, customer education and marketing, and technology development is required to implement new rates for all customer classes, particularly rates that are far more complex than any other currently available. SDCP has identified the following cost categories associated with implementing dynamic rates:
• Rate design costs would include the costs of initial market research, implementing pilots to test rate options, and analyzing the results of those pilots to refine the final design. Once the pilot is complete and evaluation data is analyzed, the final rate recommendation needs to be designed. • Setup costs include coordinating with external vendors and SDG&E on Information Technology system updates to enable settlement over new intervals, data integration, updating the bill presentment to reflect these intervals, and developing new or updating existing customer tools.

Having tools available for customers to self-service and monitor their costs and usage will be important for success with hourly rates.
• Recruitment and retention costs include marketing and enrollment costs. SDCP anticipates spending significant time educating customers through an extensive, phased marketing campaign and targeted outreach in a variety of languages. This effort will only be successful if significant time and funds are invested. Shifting to complex hourly rates while maintaining a positive customer experience – which is key for adoption and longer-term retention of the rate – will require informing and educating customers to, at a minimum, understand and monitor hourly rates, energy market dynamics, pricing, and temperature trends that may significantly impact their bills.
12 Ordering Paragraphs 1 and 2, Proposed Decision Adopting Dynamic Export Rate Pilot and Dismissing Application for a Real Time Pricing Rate Pilot, September 25, 2023, 520650818.PDF (ca.gov). 18 SDCP anticipates the above costs to make a dynamic rate available are fixed and do not vary by load, electricity usage, or enrollment level. While SDCP does not currently have pilot results to inform implementation costs, SDCP estimates significant resources to develop, implement, and maintain hourly rates for customers will be required. Depending on the scope of the costs, implementing complex new rates may necessitate a rate increase for all customers to bring in additional revenue.

4.3.1.2 Estimated Benefits
This section of the Plan describes the potential benefits associated with implementing new dynamic rates and the estimated realization of incremental benefits based on design effectiveness, adoption levels, and additional load shift capacity available to be captured.

4.3.1.2.1 Potential Benefits
SDCP has identified the primary avoided cost benefits of new dynamic rates as the following:
• Avoided capacity costs, resulting from a reduction for new capacity additions or resource adequacy procurement.
• Avoided energy costs, resulting from shifting demand from higher-cost periods to lower-cost periods.

Secondary benefits can also flow from the realization of avoided capacity and energy procurement needs. For example, to the extent that load shifting reduces the need for new capacity and wholesale energy purchases during peak periods, these reductions can also contribute to the following:
• Avoided transmission and distribution in the form of reduced need for capital investments to deliver energy during peak periods.
• Avoided GHG compliance costs associated with a reduction in generating or purchasing energy from fossil -fueled resources that may otherwise be needed to serve load during peak periods. • Improved air quality, public health, and environmental outcomes associated with a reduction in operations of fossil-fueled resources. While these benefits do not accrue directly to SDCP, they provide value on a societal basis.

4.3.1.2.2 Realization of Benefits
As a retail electric service provider and a CCA, SDCP anticipates that the greatest potential direct benefits would be derived from avoided capacity and energy procurement costs. However, the realization of any of the above-identified benefits from new dynamic rates is highly dependent on the following several factors:
• The effectiveness of the rate design in shifting customer usage patterns. • The operational value of the load shift.
• The adoption levels of the new rates.
• The customer experience on the new rate.
19 In addition, with respect to avoided GHG compliance costs and improved air quality, public health, and environmental outcomes, the realization of benefits also depends on the relative utilization of fossil-fueled resources to serve peak load versus periods of lower demand. A discussion of each factor’s expected effect on the benefits attributable to developing new dynamic rates is detailed in the next section of the Plan.

4.3.1.2.2.1 Estimated Design Effectiveness
Effective rate design is necessary to achieve predictable load shift during the most valuable peak hours of the day. The risk of not having sufficient generation, which spurs the need for new capacity additions or resource adequacy procurement, is typically concentrated in a small number of peak hours each year when serving peak load is most challenging. Accordingly, to realize any avoided capacity benefits, it is vitally important that a new rate design can achieve consistent and meaningful load reductions during those peak hours. Reducing capacity and energy procurement during peak periods relies on consistent shift in demand patterns.

Time to develop and test the effectiveness of rate design options will be especially important when shifting to a complex new rate structure that could include several price signal changes within a peak period or even within an hour. If customers do not understand the signals or the time periods During which they are provided, their response may not be predictable, leading to reduced efficacy and potentially adverse bill impacts. SDCP’s ideal dynamic rate development process would include market research, testing the effectiveness of different rate options through pilots, analyzing the results, and considering refinements before proposing a rate. Completing these steps helps to ensure that the rate sends the right signals and takes into consideration customers’ willingness to respond either directly or via automated technologies/devices while fully recognizing that the process can take significant time and resources.

The LMS requirements direct Large CCAs to propose new dynamic rates for every customer class to the Board by July 1, 2025. That timeline does not provide sufficient time for SDCP to design a pilot, test responses to different rate options, and analyze the results for even one rate class. In addition, SDG&E’s dynamic rate pilots have been delayed and results of those studies may not be available before July 1, 2025. Without the results from pilots, SDCP cannot conclude that a complex new rate design would result in any incremental, dependable load shift or ensure a positive customer experience for any of our customers.

4.3.1.2.2.2 Estimated Adoption Level
The estimated adoption level of new hourly dynamic rates directly impacts the value of load shift benefits. Based on available information, SDCP anticipates that dynamic rates rolled out to customers by July 1, 2027, would likely have low adoption and retention levels. SDCP’s assumption is based on several key factors, including the uncertainty in bill impacts from complex new rate structures, the time needed to educate customers to promote a positive experience, and the cost and limited accessibility of enabling behind-the-meter automation technology.
• Bill savings are a significant driver for customer rate adoption. The predictability of bill impacts gives customers the assurance of how they can leverage a rate to see bill savings. With dynamic rates, customers take on the full risk of price fluctuations, which may not be sustainable in the long term.
20 • One method of mitigating the uncertainty of bill impacts from new dynamic rates is to fully educate and inform customers. SDCP is dedicated to a culture of delivering the best possible customer experience when transitioning customers from one rate structure to another or when offering optional rates. Limited time to engage and educate customers on new complex hourly rates, and the potential benefits and risks associated with participation, may lead to confusion about bill impacts and low uptake. Customer experience is a priority for SDCP, so negative experiences may have an unintended negative impact to the brand and act as a deterrence on current and future initiatives.
• Realizing the benefits of dynamic rates is dependent on customers’ ability to access and adopt enabling technology. There are challenges and uncertainties associated with utilizing these devices for grid services, as further discussed in Section 4.3.3.2. SDCP expects that limited adoption of the needed technology would translate to limited benefits from dynamic rates, but accessibility of customer-owned automated devices that allow for response to hourly or sub-hourly signals is a near-term constraint. • Adoption is also impacted by a customer’s ability to understand and their capacity to meaningfully respond to dynamic rate signals. As part of its due diligence, SDCP issued an on-going survey to the largest commercial customers in 2022 to gauge interest in a Real-Time Pricing pilot rate and to date, no responses have been received.13

4.3.1.2.2.3 Estimated Incremental Load Shift Capability The primary potential benefits of dynamic rates are based on reducing new capacity additions and associated avoided wholesale energy costs, which may carry additional benefits associated with reduced transmission and distribution costs, reduced GHG compliance costs, and improved air quality, public health, and environmental outcomes. SDCP’s existing time-dependent rates and planned new load flexibility programs are likewise designed to capture these same benefits and to create a customer-centric experience, that is simple and easy-to-understand and have been supported with extensive customer outreach and education. Any incremental benefits associated with implementing dynamic rates rely on achieving incremental load shift relative to SDCP’s existing rates and planned new programs. The following summarizes the current load shift capability of SDCP’s existing rates and planned new programs and potential incremental load shift opportunities. • SDCP’s TOU rate structures mirror SDG&E’s rates and were designed to shift peak time periods energy use to off peak periods, thus reducing grid stress and resulting in financial benefits from combined energy and capacity savings.
• SDCP is in the process of designing and planning to offer new load flexibility and demand response programs that allow customers to respond to signals that incorporate day-ahead marginal prices, weather, and grid conditions. These programs complement our existing TOU rate structure and provide additional load shift benefit on a day-ahead basis and, in some cases, on a same-day basis for emergency scenarios. SDCP’s new programs and pilots are discussed further in Section 5.
13 Real-Time Pricing Pilot Rate Survey, https://sdcommunitypower.org/real-time-pricing-rtp-pilot-rate-2/. 21 • SDCP has not yet conducted pilots to evaluate more complex dynamic rate options in which hourly market price risk is passed directly to the customers. In addition, planned dynamic rate pilots in SDCP’s and SDG&E’s service area has been delayed. Without the benefit of pilot results and given the inherent complexity of new dynamic rates coupled with the risk of adverse bill impacts, and the existence of more customer-friendly TOU rates and planned new programs, SDCP cannot conclude that such dynamic rates would likely result in incremental load shift benefits. As part of its due diligence, SDCP issued an on-going survey to the largest commercial customers in 2022 to gauge interest in a Real-Time Pricing pilot rate and to date, no responses have been received.14

4.3.1.3 Discussion
Based on the evaluation of available information, SDCP cannot conclude that implementing dynamic rates for any customer class on the LMS required timeline would be cost-effective. There are significant uncertainties both in the magnitude of value that can be captured and SDCP’s ability to realize the value based on design efficacy, how customers would react to hourly market risks, and expected adoption levels. According to the whitepaper, Time-Varying and Dynamic Rate Design, authored by the Regulatory Assistance Project (“RAP”) and the Brattle Group, real-time/dynamic pricing presents high rewards but also high risks.15 SDCP anticipates that developing dynamic rates would result in significant costs and may even require a rate increase to all customers to bring additional revenue to support the development and implementation of the said rates. Without pilot results in SDCP’s and SDG&E’s service area to perform a comprehensive analysis, SDCP cannot readily ascertain rate development costs, the estimated benefits, or whether those benefits would be likely to offset the costs.

A 2004 Lawrence Berkley National Laboratory whitepaper concludes that most dynamic rate programs in the early 2000s, implemented across the country, did not achieve significant level of participation.

Another takeaway from the survey is that although many customers on dynamic rates are price responsive, a substantial fraction are not.16
Significant changes are happening and will occur in the rate landscape in our region and at the state level, including a shift to battery energy storage systems, implementation of net billing tariff, adoption of an income-graduated fixed charge, and exploration of other potential fixed charges. The combination of multiple concurrent rate variables can make evaluating dynamic rate and demand flexibility difficult.

Isolating and quantifying the benefits of just dynamic rates becomes a challenge, and these overlapping efforts complicate signaling a customer to change energy use behavior and may increase development costs. For example, introducing fixed charges, such as the income-graduated fix charge, dilutes the hourly variability that dynamic rates are trying to reflect.

SDCP will continue to gather information to inform evaluation of future rate and program designs. As data becomes available from pilots, SDCP anticipates exploring cost-effectiveness analyses and/or quantifying the estimates provided in this section of the Plan. 14 Real-Time Pricing Pilot Rate Survey, https://sdcommunitypower.org/real-time-pricing-rtp-pilot-rate-2/. 15 Time-Varying and Dynamic Rate Design, RAP and the Brattle Group, July 2012, page 17. 16 A Survey of Utility Experience with Real Time Pricing, Lawrence Berkeley National Laboratory and Neenan Associates, December 2004, ES-4 and ES-6.
22 4.3.2 Equity
The second criterion by which to evaluate dynamic rates is equity, a core principle for SDCP’s establishing bylaws and purpose. Without pilot study data to support quantifying load shift and bill impacts for different customer groups, SDCP will qualitatively evaluate the equity impacts of these rates by considering customers’ ability to benefit directly and indirectly from the rates.

4.3.2.1 Equitable Access to Direct Benefits
The ability to directly benefit from a dynamic rate depends on several factors, such as access to enabling technology, ability to shift load away from high-cost periods, and ability to benefit from the rate and absorb potential bill shocks.
• The ability to participate on a dynamic rate depends upon customers’ access to technology with specific characteristics that enable response to hourly or sub-hourly price signals. Currently, the high upfront cost of this technology may pose a limitation. To help address these barriers, SDCP’s Community Clean Energy Grants Program provides opportunities to increase access to the benefits of clean energy technologies with a focus on underserved communities and vulnerable populations. In addition, SDCP is exploring different incentive programs and developing strategies to help further broaden access.
• The ability to quickly shift load away from high-priced peak periods will affect whether participating customers can directly benefit from a dynamic rate. As market signals would be dynamic with potentially very large changes in prices between hours, customers that cannot or do not adopt and/or utilize and embrace enabling technology could see very large bill impacts. • Participating customers on a dynamic rate run the risk of bill shocks if they are unable to shift load away from high-priced peak hours. Customers who face greater barriers in implementing enabling technology are likely to be most exposed and least able to absorb potential bill shocks.

4.3.2.2 Equitable Access to Indirect Benefits
As previously described in Section 4.3.1.2.1, dynamic rates may offer benefits to SDCP’s customers, to the extent such rates reduce overall capacity costs, contribute to reliability, and reduce reliance on fossil-fueled resources. These benefits could serve as a downward pressure on rates and result in improved air quality, public health, and environmental outcomes. However, as discussed in Section

4.3.1.2.2, SDCP is unable to conclude at this time the magnitude of these benefits that would result from the implementation of dynamic rates.

4.3.2.3 Discussion
Based on the evaluation of available information, SDCP cannot conclude that implementing dynamic rates would result in any equity benefits. The availability of such rates is likely to disproportionately benefit higher-income customers, early adopters of technology, and can absorb the risk of bill shocks. It is critical to analyze pilot study results to accurately quantify the magnitude and uncertainty of these benefits, including the level of acceptance and adoption of dynamic, hourly or sub-hourly rates from customers of different income levels. Severin Borenstein, in a 2009 article, states that some customers would be winners and others would be losers with a switch to dynamic rates. He elaborates that those customers who consume disproportionate quantities at the most expensive times are being subsidized 23 under time-invariant rates and may be worse off if they cannot adjust their consumption substantially under dynamic rates.17

4.3.3 Technological Feasibility
Technological feasibility is the third evaluation factor for dynamic rates. SDCP’s evaluation assesses the technological feasibility of implementing dynamic rates for all customers on the schedule specified in the LMS requirements and considers the feasibility of both the technology systems needed to support implementation of dynamic rates and to the external customer technology that is needed to enable response to hourly or sub-hourly signals. Since SDCP is a CCA that isn’t the Meter Data Management Agent (“MDMA”), SDG&E is in control and responsible for a significant portion of the technology systems’ updates and rollout required to implement dynamic rates that overlap both organization’s service areas.

4.3.3.1 Technology Systems
The primary technology systems needed to support dynamic rates include advanced metering infrastructure (“AMI”), SDCP and SDG&E’s Customer Relationship Management software, and SDCP’s and SDG&E’s billing system software. SDCP also relies on additional applications from external vendors to develop customer educational tools and is working with these providers to provide functionality to communicate with and control enabling technologies, in the future. The following provides a feasibility assessment of each technology component:
• SDG&E’s meters can provide hourly interval data for residential customers and sub-hourly interval data for non-residential customers. An assessment of the AMI network communication infrastructure is likely to be required to identify if additional equipment needs to be installed to support the increased volume. SDCP will coordinate with SDG&E to avoid any disruptions to customers.
• SDCP will coordinate with SDG&E regarding any necessary billing system configuration changes.

SDCP anticipates it will be necessary to develop enhancements to SDG&E’s online tools and services to help customers understand any new rates and rate changes holistically. • Updating existing customer tools and developing new tools would be key to supporting a positive customer experience when implementing dynamic rates. SDCP will engage not only with external vendors on relevant existing tools but also SDG&E to assess the technological feasibility of and timeframes necessary to develop and/or modify existing tools to support dynamic rates.

In sum, SDCP anticipates that collaboration and coordination with SDG&E and external vendors will be critical to successfully implementing dynamic rates. SDCP will work with parties to assess enhancements, upgrades, and additional functionality that will be needed to ensure the optimal benefits realization of dynamic controls and a positive customer experience.
17 Electricity Pricing that Reflects Its Real-Time Cost, Severine Borenstein, March 2009, https://www.nber.org/reporter/2009number1/electricity-pricing-reflects-its-real-time-cost. 24 4.3.3.2 Enabling Customer Technology
Realizing that the potential incremental benefits of dynamic rates depend on customer participation and the widespread availability of devices and technology that can support real time response to hourly or sub-hourly price signals; SDCP is in the process of assessing technologies with this kind of capability to include in future customer programs. The following is a list of common load flexibility technologies in SDCP’s and SDG&E’s service area. SDCP anticipates these same technologies would be needed to respond to new dynamic rates.
• Wi-fi enabled smart thermostats is the most widely adopted load flexibility technology. These devices can receive and respond to dispatch signals within 15-30 minutes. Utilities and CCAs rely on day-ahead and/or more real-time marginal costs and system conditions to inform the dispatch of resources in load flexibility programs.
• Battery energy storage systems are being adopted with increasing frequency by both residential and non-residential customers, particularly as an add-on to solar photo-voltaic (“PV”) installations. Batteries have much greater ability to be dispatched on short notice, and SDCP is currently designing a program to accelerate this adoption and reduce the payback period for solar plus storage deployments through upfront financial and on-going performance incentives. • Air conditioning (“AC”) switches are one of the oldest distributed resource technologies and have been deployed since the 1970s. These switches are included in various demand flexibility programs across the utilities and CCAs.
• Electric vehicles (“EVs”) are an emerging source of load flexibility. There is significant potential for further growth given statewide goals for zero emissions vehicles by 2030. SDCP is assessing potential future charging programs that include sending hourly price signals to participating EVs.

SDCP’s future programs, utilities and CCAs’ existing programs will inform SDCP’s understanding of how to most effectively engage with customers with behind-the-meter devices, considering different technologies, customer needs and preferences, and other factors. SDCP anticipates future programs will help increase the acceptance and adoption levels of enabling technologies as well as testing their response to utility signals and dispatch whereby the results of these programs will also inform future consideration of dynamic rates.

4.3.3.3 Discussion
Based on the evaluation of available information, SDCP believes the technology exists to implement some level of dynamic rates on the LMS timeframe. However, the capabilities of enabling behind-the-meter device technology, along with the impacts on customer experience, are still being tested and developed. SDCP believes that reassessing the technological feasibility of dynamic rates after evaluating pilot study results and future programs would better inform the likelihood of positive customer acceptance and material load shift benefits.

SDCP anticipates coordination with SDG&E and external vendors on implementing any necessary changes to internal systems, with the necessary infrastructure deployments and system configuration implementations. Additional time to enhance the billing experience, develop customer tools, and enhance DER functionality and control would create a better experience, improve the likelihood of 25 acceptance of the new rates, and support improved realization of both customer and grid benefits in alignment with LMS desired outcomes.

4.3.4 Benefits to the Grid and Customers
The final two criteria for evaluating dynamic rates are benefits to the grid and benefits to customers.

SDCP evaluates the two factors simultaneously because many benefits to the grid also have pass-through benefits to customers. SDCP evaluates each benefit by considering the expected effectiveness of the rate design and the expected adoption rate. The following is a summary of anticipated grid and customer benefits associated with implementation of new dynamic rates on the timeframe specified in the LMS requirements.
• An effective rate design that delivers meaningful, dependable load shift in response to hourly or sub-hourly signals is critical to capture benefits of avoided capacity costs, in terms of reduced new generation capacity or procurement. Shifting demand away from peak periods also has the potential to increase grid reliability. As further discussed in this Plan’s section 4.3.1.2.2.3, SDCP is unable to conclude that implementing dynamic rates would result in incremental capacity cost savings, given the uncertainty around design effectiveness, adoption levels, and the magnitude of load shift potential.
• An effective rate design that encourages customers to shift from high-cost, high-GHG periods to lower-cost, lower-GHG periods is instrumental to capture the benefits of avoided energy costs.

This allows for more efficient use of cheaper renewable energy when it is generated and reduces the higher costs of fossil-fueled energy associated with serving peak load. However, as further discussed in the Plan’s section 4.3.1.2.2.3, SDCP cannot conclude that implementing dynamic rates would result in incremental avoided energy costs. • As distributed energy resources (“DERs”) programs are still in pilot stages across the state, how they and rate designs impact the need for various transmission and distribution services is still uncertain. With limited available information, SDCP cannot conclude that dynamic rates will result in any transmission and/or distribution savings. • To the extent that dynamic rates can shift energy use from peak time periods in which fossil fueled resources serve load to time periods with greater renewable energy generation, there is the potential for reduced compliance costs for GHG emissions. Reducing grid thermal operations and/or limiting market purchases when the grid has a greater carbon intensity can save costs for SDCP’s customers.

However, any incremental GHG cost savings depend on the realization of incremental reductions in capacity needs and/or in energy purchases during high-cost/high-GHG periods.

GHG cost savings benefits are uncertain because SDCP is unable to conclude that implementing dynamic rates would result in material incremental load shift. In addition, as SDCP gets closer to achieving a 100 percent renewable energy supply, SDCP anticipates increasingly less difference between the GHG emissions profiles of resources serving customers during the peak and in periods of lower demand.
• Potential air quality, public health, and environmental benefits associated with dynamic rates depend on if such rates can successfully reduce capacity needs or energy purchases during time 26 periods when the grid has a higher carbon intensity. SDCP cannot conclude that a material incremental increase in these benefits will accrue on the timeline specified in the LMS requirements.
• Through dynamic rates, customers have the potential to lower their energy costs by shifting their peak hour usage. However, customers take on the full risk of market price fluctuations, which could have severe impacts on customer bills especially during times of extreme market volatility. If high prices are sustained over a long period of time, customers may not be able to shift energy use to prevent excessively large bills. As an example, during the May 25, 2021 Advanced DER and Demand Flexibility Management Workshop, SDG&E expressed the concern that while wholesale prices are effective at balancing supply and demand, they may cause unintended consequences during extreme scarcity events. SDG&E cited the example of the negative experience of Texas residential customers on wholesale prices.18 • SDCP strives to maintain a delicate balance between multiple objectives as described in its Rate Development Policy. When designing rates, one priority is to emphasize rate-design simplicity, comparability, and transparency. Dynamic rates could be very complex and difficult for customers to understand. Thus, leading to confusion and potential negative bill impacts, particularly if SDCP does not have sufficient time to fully educate customers on the potential benefits and risks of marginal cost-based rates.

4.3.4.1 Discussion
Based on the evaluation of available information, SDCP is unable to conclude that implementing dynamic rates on the timeframe specified in the adopted LMS amendments would yield material incremental benefits to the grid or to customers. Important takeaways from the Lawrence Berkeley National Laboratory white paper emphasized that sufficient resources must be devoted to developing and implementing a customer education program and customers need help understanding and managing price risk.19
Another team of Lawrence Berkeley National Laboratory researchers interviewed 29 customers in the Niagara Mohawk Power Corporation service territory with day-ahead dynamic prices in 2004. The study specified that reasons customers gave for why they were not price-responsive included implicit value placed on reliability, pricing structures, lack of flexibility in adjusting production inputs, just-in-time practices, perceived barriers to onsite generation, and insufficient time.20 Therefore, a premature introduction of dynamic rates may cause confusion and shift additional market price risk onto customers, creating a negative customer experience that may hinder adoption of both the new rate and longer-term load flexibility initiatives. A hurried implementation of a complex and untested dynamic rate structure is likely to result in costs, rather than benefits, to the grid and to customers.
18 Advanced Strategies for Demand Flexibility Management and Customer DER Compensation, California Public Utilities Commission, June 22, 2022, page 103. 19 A Survey of Utility Experience with Real Time Pricing, Lawrence Berkeley National Laboratory and Neenan Associates, December 2004, ES-9. 20 Real Time Pricing and the Real Live Firm, Lawrence Berkeley National Laboratory, August 2004, page 1. 27 4.3.5 Compliance Approach
Based on the results of this evaluation, SDCP plans to continue offering the existing portfolio of time-dependent rates. SDCP regularly reviews its rates, including cost-effectiveness. SDCP also plans to implement new load flexibility programs and pilots that will help the organization better understand how best to engage with behind-the-meter customer devices. With additional information and results, SDCP can consider developing a dynamic rate pilot rate for one or more customer classes in the future.

Therefore, SDCP will defer developing and proposing adoption of new dynamic rates beyond July 1, 2025, and offering voluntary participation in any such rates beyond July 1, 2027. Based on available information, SDCP cannot conclude that proposing and implementing dynamic rates, as proposed in the LMS requirements’ timeline, would be cost-effective, provide equity benefits, be technologically feasible, and/or or yield any cost savings or emissions-related benefits to the grid and to customers. The risks of premature implementation can adversely impact participating customers’ bills, the overall customer experience, and even SDCP’s image and reputation.

SDCP plans to reassess the timeline for proposing and implementing dynamic rates no later than the triennial review of the Plan. The Plan review will also include potential updates to qualitative and quantitative evaluations for cost-effectiveness, equity, technological feasibility, and benefits to the grid and to customers.

5. Load Flexibility Programs
The adopted LMS amendments recognizes that load flexibility programs may provide an alternative pathway to achieve the objectives of encouraging off-peak energy usage, controlling peak load to improve reliability and system efficiency, lessening, or delaying the need for new capacity, and reducing fossil-fuel consumption.

Adopted LMS amendments section 1623.1(a)(1)(B) requires each Large CCA to propose and evaluate programs that enable automated responses to marginal cost-based signals for each customer class, if the Large CCA does not propose the development of marginal cost-based rates. The programs must be evaluated based on cost effectiveness, equity, technological feasibility, benefits to the grid and to customers.

Adopted LMS amendments section 1623.1(b)(3) requires each Large CCA to submit a list of cost-effective MIDAS-integrated load flexibility programs to the CEC Executive Director by October 1, 2024.

The portfolio of load flexibility programs must provide at least one option to automate response to MIDAS signals (that indicate, for example, hourly marginal cost-based rates, marginal prices, or hourly or sub-hourly GHG emissions) for every customer class where such a program is determined by its rate-approving body to materially reduce peak load.

Finally, each Large CCA is required to offer customers, by July 1, 2027, voluntary participation in a dynamic hourly rate, if approved by its rate-approving body, or a cost-effective MIDAS-integrated load flexibility program identified according to section 1623.1(b)(3).

The following section of SDCP’s Plan provides an overview of SDCP’s current and in-development future load flexibility programs and addresses the LMS requirement to evaluate and propose specified programs on the timeframes. It also addresses the requirement to submit a list of cost-effective MIDAS-integrated load flexibility programs to the CEC. 28 5.1 Overview of SDCP Load Flexibility Programs
Load flexibility is a key strategy in helping SDCP achieve its 100 percent renewable energy goal, by enabling customers to be part of the strategy in reducing procurement needs. SDCP is developing several leading-edge and innovative options for customers.

SDCP is focused on establishing and offering new load management programs because they are simple, effective, flexible, and potentially allow for SDCP to make rapid progress in unlocking peak load reduction potential. SDCP is working to innovate with technology and software providers to advance functionalities that will enable broad participation and maximize potential resources, optimized for customer and grid needs. When designing programs, SDCP strives to tailor its offers to specific customer segments and/or needs to maximize responsiveness beyond just price alone. SDCP analyzes data to identify where the need is to design programs that have the greatest potential for mutual benefits to customers and to SDCP. Piloting multiple approaches is a key strategy for SDCP. Pilot study results inform future program designs and the technology needed to scale adoption. SDCP’s in development program portfolio includes a portfolio-level Distributed Energy Resource Management (“DERMS”) deployment that will, in time, serve as the central point of control and dispatch for a range of load flexibility program offerings, which may include residential, C&I, and agricultural customer classes. In the near term, SDCP is developing specific offerings related to residential load flexibility and electric vehicle managed charging. The following section of the Plan provides a list of planned programs offerings that will test for reliability, load reduction, and customer adoption.

5.1.1 Residential Programs

5.1.1.1 Building Flexible Load Pilot
A major programmatic effort for SDCP in calendar year 2024 is the launch of a Building Flexible Load Pilot focused on major end uses in the residential sector. The pilot plan is to procure a DERMS platform in 2024, then begin enrollment of customers with existing or newly installed grid enabled devices, such as smart thermostats, water heaters, electric vehicle service equipment (“EVSE” or Level II chargers), and pool pumps. The pilot will include upfront incentives for initial device registration and enrollment, as well as ongoing incentives for continued device enrollment and control. Enrolled devices will be dispatched daily based on the host customer’s time of use TOU rate schedule. This dispatch strategy will shift loads away from on-peak periods, resulting in lower bills for program participants, as well as lower energy procurement costs and a reduced resource adequacy (“RA”) obligation for SDCP. In addition to TOU-based dispatch, SDCP will assess additional optimization pathways, such as day-ahead prices, forecasted weather, and grid conditions. It is SDCP’s intent to scale the programmatic and software architecture developed through this pilot to include subsequent activities, including enrollment of flex load devices deployed through the planned Regional Energy Network and Residential Building Electrification Programs.

5.1.1.2 Solar + Storage Program
SDCP is also seeking Board approval to launch a solar and storage program targeting single-family residential homes within SDCP territory that do not already have storage or solar plus storage in early 2024. This program is designed to help with the transition from Net Energy Metering (“NEM”) to Net Billing Tariff and support the solar and storage industry. The program will include an upfront incentive 29 to overcome the initial cost or reduce monthly loan/lease payments and a performance incentive to motivate customers to dispatch their batteries daily during peak periods to align with times when energy costs are high. The program will allow customers to optimize their solar plus storage system according to NBT and to maximize their benefits. Over time, SDCP plans to bring these battery assets under the portfolio wide DERMS deployment and co-optimize battery charge/discharge with Building Flexible Load device dispatch. The DERMS platform can dispatch “active” events, which would override the daily dispatch schedule when the price of power is high based on day-ahead forecasting to further maximize peak load reduction, while ensuring customer bill savings.

5.1.2 Managed Electric Vehicle Charging Programs
Electric vehicle charging is a large and growing load for SDCP’s and, consequently, a major focus of residential flexible load pilot work. SDCP plans to launch a residential managed charging pilot in mid-2024, focused on the use of vehicle telematics to align vehicle charging with host customer time of use rates. As with the Building Flexible Load pilot, customers will be paid an upfront incentive for vehicle enrollment, as well as an ongoing incentive for remaining in the program. Also like the Building Flexible Load, the pilot will include an assessment of additional optimization pathways, such as day-ahead prices, forecasted weather, and grid conditions. In addition, SDCP is considering the inclusion of a small-scale vehicle-to-everything (“V2X”) demonstration under the Managed Charging umbrella. This pilot element will optimize charging around TOU rates, like the core program, and include an assessment of battery discharge strategies ranging from minimizing onsite load to grid export. Additionally, the pilot will explore the economic and technical viability of automated dispatch from the CEC MIDAS database.

5.2 Evaluation of Programs
For a relatively young organization, SDCP is in the process of developing a robust portfolio of programs, including load flexibility, that strikes the right balance between customer needs and grid benefits. As summarized above, this portfolio is focused initially on the residential customer segment and exploring various dispatch signals, including automated response. These signals are based on several factors, including day-ahead marginal prices. The program development process will include collaborating with external vendors to build a technology platform that can optimize and automate dispatch of DERs.

The next section of the Plan evaluates the cost-effectiveness, equity, technological feasibility, and benefits to the grid and to customers of implementing programs that enable automated response to dispatch signals, including MIDAS signals, year-round, that are available to every customer class by July 1, 2027. Without program results at this time, SDCP cannot quantify the magnitude of peak load reduction and/or other benefits can be provided through programs that enable automated dispatch based on MIDAS signals.

5.2.1 Cost-Effectiveness
The first evaluation factor is cost-effectiveness. SDCP will assess cost-effectiveness of new programs by comparing the estimated costs and incremental benefits associated with designing and implementing new load flexibility programs that allow for response to dynamic price signals, including MIDAS signals, year-round. For a program to be cost-effectiveness, the expected benefits must exceed the costs of design and implementation.
30 5.2.1.1 Estimated Costs
The costs associated with implementing a new load flexibility program include program development, implementation, and administration costs. SDCP anticipates these cost categories would apply, regardless of customer class.
• Program development costs include the costs associated with program design and setup, including integrating new programs with the CEC’s MIDAS database and any applicable technology platform to the extent feasible.
• Program administration costs include ongoing costs to administer the program such as marketing, customer recruitment, customer education, development and maintenance of customer tools, and any upfront or ongoing incentive payments that are part of the design. • Technology and implementation costs include any external software systems that must be procured to communicate with and dispatch devices, as well as internal systems which must be developed and configured to integrate the external software. New load flexibility programs may require significant investments in new technology platforms.

5.2.1.2 Estimated Benefits
The following section describes the potential benefits associated with implementing programs that allow for automated response to dynamic price signals, including MIDAS signals, and the estimated realization of such benefits based on the additional load shift capacity available to be captured.

5.2.1.2.1 Potential Benefits
The potential benefits associated with implementing programs that achieve incremental load shift include avoided capacity and energy costs, improved reliability during peak periods, avoided GHG compliance costs, and avoided air quality, public health, and environmental costs associated with a reduction in fossil-fuel generation, consistent with the benefits discussed in Section 4.3.4.6. These potential benefits are not unique to programs implemented for any one customer class.

5.2.1.2.2 Realization of Benefits
There are several uncertainties and barriers associated with realizing the above-identified incremental load shift potential and its associated benefits. SDCP expects these barriers and uncertainties to apply across residential, C&I, and agricultural customer classes. These uncertainties and barriers are summarized as follows:
• While there has been a rapid increase in the number of devices on the market that are able to automate load reductions, SDCP is not aware of any devices capable of effectively responding to real-time signals without significantly compromising customers’ daily activities. Battery storage, EVs and even thermostats all require advance notice to meet customer needs. • Removing the limits on how many program events can be called may bring additional load flexibility to utilities and CCAs, but frequent device dispatch without first understanding the impacts on customer experience runs the risk of eroding participation and satisfaction in the program.
31 • SDCP anticipates that directly exposing participants to market prices could result in deeper load reductions, to the extent that increasing prices drive customers to shift more load away from the peak. However, the magnitude of additional load reduction as a function of price is not yet known. In addition, higher customer risk with dynamic prices is likely to reduce participation and benefits.
• SDCP anticipates that new programs would have to tap into load shift on 5- to 10- minute intervals to create incremental benefits relative to our programs and it is not yet known whether the issuance of multiple price signals over a peak period, or higher prices over the same period, would result in material incremental benefits, compared to existing programs.

5.2.1.2.3 Expected Incremental Benefits
Based on the above factors, following is a discussion of expected incremental benefits associated with programs that allow for automated response to dynamic price signals:
• The primary value stream for SDCP’s load flexibility programs will be avoided RA procurement.

To the extent a given program can generate MWs that meet the resource characteristics needed to avoid RA procurement, these avoided costs can be credited against the costs associated with implementing the program. While programs that expose customers to dynamic price signals may drive incremental load reductions when prices are highest, it is unknown how much and how reliable that incremental reduction would be, and how it would be credited under the current RA framework. Moreover, the magnitude of the load shift depends on significant adoption and acceptance of enabling technology.
• To the extent that new program structures and technology allow for faster load shift in response to short price spikes or drive greater load shift away from peak periods, SDCP could see reductions in energy purchase costs, but this is currently not yet known. Future program design will seek to maximize the energy savings associated with customer load flexibility, balanced against technological capability, customer acceptance, and impact on the overall energy system. • Given uncertainties around customer response to dynamic price signals and current penetration of enabling technology, SDCP is unable to determine whether there would be secondary benefits (reliability benefits, avoided transmission and distribution costs, avoided GHG compliance costs, avoided public health, air quality, and environmental costs) associated with further reducing demand during peak periods from programs with automated response to hourly price signals versus existing programs.

5.2.1.3 Discussion
Based on the foregoing evaluation, SDCP cannot conclude that the development of new programs that allow for automated responses to dynamic price signals would be cost-effective at this time. SDCP will incur new programs’ costs associated with design, implementation, and new technology investments.

While these costs could potentially be offset with capacity and/or energy cost savings, the magnitude of those benefits are uncertain.

In addition, SDCP anticipates that any incremental benefits will be limited in the near-term, while new technology is continuing to grow. SDCP will continue to assess the expected incremental costs and 32 benefits associated with incorporating more dynamic price signals and/or allowing resources to be dispatched by MIDAS signals, as SDCP develops and potentially implements new programs.

5.2.2 Equity
The second criterion for evaluating new programs is equity. SDCP qualitatively evaluates whether programs that enable automated response to dynamic prices, including MIDAS signals, are likely to lead to equitable outcomes.

5.2.2.1 Equitable Access to Direct Benefits
When designing any program, SDCP ensures that all aspects of program design take equity into account.

SDCP has committed to equity and the specific strategies for addressing it in SDCP’s Community Power Plan (“CPP”). The CPP was created to provide strategic direction for developing customer energy programs that respond to community needs, with a focus on underserved communities and equity.

In accordance with the CPP, SDCP is committed to include equity as a core principle when designing programs that allow for response to dynamic signals, given the current access barriers and risk of price exposure that may disproportionately be experienced by lower income customers and customers from our communities of concern.

5.2.2.2 Equitable Access to Indirect Benefits
Program design also plays a major role in determining whether a program delivers incremental load shift benefits and results in cost savings and improved air quality, public health, and environmental outcomes that accrue to all customers. The realization of any indirect benefits is uncertain because SDCP cannot quantify load shift benefits that dynamic price signals would result.

5.2.2.3 Discussion
Based on the foregoing evaluation, SDCP is unable to conclude that implementing new programs that allow for automated response to dynamic price signals, including MIDAS signals, would materially address equity. Programs can be designed to ensure equitable access to participation and benefits regardless of if the programs incorporate sending dynamic signals directly to customers. Furthermore, the risk of price exposure from dynamic rates could potentially exacerbate inequities in outcomes.

5.2.3 Technological Feasibility
The third evaluation factor for programs is technological feasibility. SDCP’s evaluation assesses the technological feasibility of implementing programs that allow for automated response to dynamic price signals on the schedule specified in the LMS requirements. SDCP’s evaluation considers the feasibility of both the systems needed to dispatch dynamic price signals, including MIDAS signals, and to the external customer technology that is needed to enable response to hourly or sub-hourly signals.

5.2.3.1 SDCP’s Technology Systems
As described previously, SDCP will coordinate and collaborate with external vendors and SDG&E to ensure technological platforms are configured to implement new programs. SDCP has started discussions with multiple parties in assessing whether it is technologically feasible to incorporate programs that enable automatic response to dynamic price signals, including MIDAS signals, into current platforms.
33 5.2.3.2 Enabling Customer Technology
The incremental benefits derived from implementing new programs that allow for response to dynamic price signals depend on customer participation and the widespread availability and acceptance of devices that can respond to sub-hourly price signals without compromising customer experience. Refer to Section 4.3.3.2 for a detailed description of common load flexibility technologies that are deployed across the state, and their capabilities and challenges.

5.2.3.3 Discussion
SDCP is uncertain whether the technology and platforms needed to enable programs that allow for response to dynamic price signals exist or could be updated on the LMS requirements’ timeframe, given close coordination and collaboration with external vendors and SDG&E will be required. However, SDCP has started discussions with those parties on technological feasibility in anticipation of developing and offering programs with enabling device automation technology.

5.2.4 Benefits to the Grid and Customers
The final two criteria for evaluating dynamic rates are benefits to the grid and to customers. SDCP is evaluating these factors separately, in contrast to the previous dynamic rates evaluation.

5.2.4.1 Benefits to the Grid
To the extent that new programs enabling responses to dynamic price signals result in consistent, material incremental load reduction, the following are potential grid benefits:
• Deferred or reduced need for new generation capacity or RA procurement. • Deferred or reduced need for wholesale energy purchases to meet peak demand. • Deferred or reduced need to upgrade transmission and/or distribution capacity to deliver energy to meet peak demand.
• Increased reliability is associated with reducing grid strain during periods of peak demand.

These benefits all depend, in significant part, on the magnitude of load shift resulting from new programs. Mutual benefit is necessary for effective, consistent load shift. With limited available information, SDCP is unable to quantify load shift benefits of new MIDAS-integrated programs.

5.2.4.2 Benefits to Customers
The following is a summary of potential customers benefits associated with implementing new programs that allow for automated response to dynamic price signals:
• Pass-through cost savings associated with the realization of a reduced need for generation capacity, transmission and/or distribution upgrades, and higher-price wholesale energy purchases to meet peak load.
• Pass-through cost savings associated with avoided GHG compliance costs, to the extent that the incremental load shift reduces the need to rely on fossil-fuel resources to meet peak demand.

SDCP anticipates these savings will become less significant as SDCP’s energy supply transitions towards 100 percent renewable.
34 • Pass-through increased reliability, to the extent this grid benefit is realized. • Improved public health, air quality, and environmental outcomes, to the extent that the incremental load shift reduces the need to rely on fossil-fuel resources to meet peak demand. • Cost savings associated with participation, to the extent that devices automatically shift load away from higher price periods.

Based on the uncertainty of the magnitude of load reduction benefits that the new programs can achieve, SDCP is unable to conclude that there would be any incremental pass-through cost savings or reliability benefits to customers. Similarly, SDCP anticipates that any incremental air quality, public health, and environmental benefits would also be uncertain.

5.2.5 Compliance Approach
The following section of the Plan describes how SDCP plans to address the requirements to identify cost-effective programs that allow for automated response to dynamic price signals and offer customers voluntary participation in these programs, based on our evaluation of such programs.

5.2.5.1 Identification of Cost-Effective Load Flexibility Programs Consistent with the LMS requirements, SDCP will submit to the CEC, no later than October 1, 2024, a list of cost-effective load flexibility programs that enable automated response to MIDAS signals for each customer class, if any, where such a program is determined by SDCP’s Board to materially increase peak load reduction. Based on available information, SDCP is unable to determine that adding new programs that allow response to MIDAS signals would materially reduce peak load for any customer class or exceed the costs of implementation. SDCP will continue to evaluate the cost-effectiveness and incremental peak load reduction potential associated with incorporating automated response to MIDAS signals.

5.2.5.2 Voluntary Participation in Cost-Effective Load Flexibility Programs SDCP is currently developing load flexibility programs that may offer customers voluntary participation.

However, SDCP is unable to demonstrate that offering such programs beginning on July 1, 2027 would be cost effective. SDCP will continue to assess the cost-effectiveness and peak load reduction potential of programs that enable automated response to MIDAS signals as more information becomes available.

6. Public Information Program
Adopted LMS amendments section 1623.1(a)(5) requires each large CCA to conduct a public information program to inform and educate impacted customers about dynamic rates and/or load flexibility programs. Specifically, the information program must explain why dynamic rates or load flexibility programs, and their automation, are needed, how they will be used, and how they lower energy costs.

This section of the Plan addresses how SDCP will comply with the public information program requirements.
35 6.1 SDCP’s Communication Approach
As a community-driven local electricity provider, SDCP is committed to broad customer outreach and education, communication, and customer service. SDCP provides its customers with the information, education, and tools to best manage their energy use according to their needs.

SDCP communicates through a wide variety of channels, including our website, social media, in-person, and direct mail to help ensure customers are aware of SDCP more broadly and specifically about available time-dependent rates and load flexibility programs, and their benefits.

As part of our commitment to customer access and education, SDCP formally established a Language Access Policy to ensure that customers can access information and materials in their preferred language.

SDCP’s customer service agents regularly interact with customers over the phone and email to address questions and concerns and resolve issues. We strive to empower our customers with comprehensive information, education, and tools tailored to meet their unique energy needs.

SDCP has developed a comprehensive and customer-centric communication strategy that recognizes the unique customer segments that SDCP serves. This strategic approach is designed not only to disseminate information but to empower our customers, enabling them to make well-informed decisions aligned with their individual needs. Through our website, customers have access to a centralized hub of resources, where they can find detailed information and educational materials tailored to enhance their understanding of SDCP as an organization, energy efficiency, and time-dependent rates. Our active presence on various social media platforms amplifies our engagement, providing a space for interactive communication and real-time updates. In the spirit of transparency, SDCP maintains regular communication with regional media, providing factual and timely information to the broader public.

SDCP’s communication and community outreach efforts reflect the diverse communities we serve, so a broad mix of communication channels is used to reach all customers. This includes in-person outreach in the community at public events with information and resources available to the attendees. SDCP regularly participates in events across our member agencies as we aim to increase general awareness and answer questions in a friendly, helpful manner. In addition to community outreach, SDCP consistently sponsors large events throughout the greater San Diego region to increase general brand awareness.

6.2 Current Outreach and Marketing
SDCP recognizes the importance of collaboration and public outreach. SDCP has engaged in a variety of public relations, marketing, community outreach, and local government affairs activities to drive energy awareness and education, spark community engagement, and maintain high customer enrollment. We work closely with internal and external stakeholders to encourage participation in programs and leveraging relationships with community partners to amplify our marketing and outreach efforts.

As noted above, SDCP’s commitment to broad, in-person outreach and engagement is critical to our efforts. In 2023 SDCP participated in over 70 in-person events throughout our service territory which created the opportunity for approximately 250,000 interactions.

Having recently completed mass enrollment, SDCP has expanded marketing efforts to continue to educate our customers about SDCP and specifically, on the simple actions they can take to limit energy 36 use during times of peak use. Energy tips and education around time-dependent rates can be found across our digital communication channels and in printed materials, including the Power Content Label mailer, which serves as an annual touchpoint with customers. This approach has expanded to digital efforts in both organic and paid social media, and into other marketing efforts, including a year-long sponsorship agreement with San Diego Magazine across print and digital channels and other local print and television outlets.

To achieve decarbonization goals, SDCP will continue to educate customers on the benefits of peak load reduction through time-dependent rates and load flexibility programs, how they work and how they can save the customers money. SDCP will continue to develop new strategies, processes and capacity to conduct more community outreach, expand marketing and brand awareness efforts, and provide timely, accurate information across multiple channels.

6.3 Compliance Approach
SDCP will continue with communication best practices to maintain its outreach, education, and marketing of rates, programs, and pilots that support load flexibility and recognize the benefits of reducing peak load. In parallel, SDCP will also update education and marketing materials to incorporate discussion of new rates, programs, and pilots, along with the role of automation.

7. Delay and Modification of Compliance Requirements
Adopted LMS amendments section 1623.1(a)(2) of the LMS regulation specifies that a Large CCA may approve a compliance plan, or material revisions to an approved plan, that delays or modifies compliance with certain LMS requirements. To do so, the compliance plan must demonstrate one of the following factors:
• That despite good faith efforts to comply, requiring timely compliance would result in extreme hardship.
• Requiring timely compliance would result in reduced system reliability, equity, safety, or efficiency.
• Requiring timely compliance would not be technologically feasible or cost-effective to implement.
• Or despite good faith efforts to implement a compliance plan, it must be modified to provide a more technologically feasible, equitable, safe, or cost-effective way to achieve the LMS requirements or the plan’s goals.

This section of the Plan addresses how SDCP’s Plan delays or modifies compliance with certain elements of the LMS requirements.

7.1 Providing RINs to Customers
Adopted LMS amendments section 1623(c)(4) requires each Large CCA to provide customers access to their RIN(s) on billing statements and in online accounts by April 1, 2024, using both text and QR code.

As detailed in section 3.1.2 of this Plan, SDCP plans to make the RINs available to customers in the 37 required formats within the designated time and SDCP has already begun engaging with appropriate parties, including SDG&E, on the necessary changes.

SDG&E has complete control of both paper and electronic billing statement designs. While SDCP does not anticipate needing to modify the RIN access requirement at this time, based on the scope of work and estimated completion timelines, compliance could be delayed if, for example, SDG&E’s current bill design constrains the inclusion of the RIN in text and/or QR code, and the redesign cannot be timely completed, tested, and implemented by the same deadline. In such circumstances, SDCP would need to modify the deadline for providing RINs to customers in both text and QR code because implementing this requirement by April 1, 2024, would not be technologically feasible.

7.2 Statewide RIN Access Tool

7.2.1 Development of Statewide Tool
Adopted LMS amendments section 1623(c) requires the utilities and Large CCAs to develop a single statewide standard tool for authorized rate data access by third parties, along with a single set of terms and conditions for third parties using the tool, for submission to the CEC by October 1, 2024, for approval.

As discussed in section 3.1.3, SDCP plans to collaborate with the parties and has committed staff to participate in the working group. While SDCP anticipates that developing a single statewide tool that can perform the specified requirements and integrate with each load serving entity’s system will be a challenging and complex task, at this time SDCP intends to comply with the requirement. Because the tool development requirement is jointly held by the utilities and Large CCAs, SDCP is optimistic that significant progress will be made and does not seek to delay or modify this requirement within this Plan.

Should the need for an extension arise, SDCP anticipates that the parties would approach the CEC Executive Director collectively in accordance with section 1623(c)(2)(B) of the LMS, which allows the CEC Executive Director to extend the submission deadline upon a showing of good cause.

7.2.2 Implementation of Statewide Tool
Adopted LMS amendments section 1623(c)(3) also requires the utilities and Large CCAs to implement and maintain the tool, upon its approval by the CEC. SDCP does not anticipate needing to modify compliance with this requirement currently. However, SDCP notes that integration of the approved tool with internal systems could be delayed if the development and/or CEC approval of the tool are delayed, because integrating the tool before it is finalized and approved would not be technologically feasible, or if the cost of integrating the tool would cause extreme hardship for SDCP or SDCP’s customers.

7.3 Dynamic Rates
Adopted LMS amendments section 1623.1(b)(2) directs each Large CCA to apply for approval of at least one dynamic rate for the customer class(es) from its Board by July 1, 2025, for which the Board determines such rate will materially reduce peak load. Section 1623.1(b)(4) requires CCAs to offer customers voluntary participation in such a rate or a specified load flexibility program by July 1, 2027.

As discussed in Section 4.3, based on its evaluation of dynamic rates, SDCP cannot currently conclude that developing and implementing such rates on the LMS timeframe for any customer class would result in material reductions in peak load or be cost effective. This is due to the following:
38 • Delayed SDG&E service area dynamic rate pilots, and corresponding data, to evaluate peak load reduction and cost-effectiveness.
• There is a significant market risk to customers on dynamic rates, even with enabling load-shifting technology. • Customers understand time-dependent rates and programs better than a dynamic, market-based rate that fluctuates hourly.

While dynamic rates have the potential to provide incremental load shift and related benefits, there are significant uncertainties in the magnitude of such benefits. Without evaluation data from SDG&E service area dynamic rate pilots, it is incredibly difficult to quantify incremental load shift benefits and cost-effectiveness of dynamic rate implementation. In addition, implementation of unfamiliar and complex rate structures without sufficient testing and refinement of new rate designs, as well as thorough education, is likely to cause customer confusion, risking low adoption and limiting any incremental load shift benefits. The realization of incremental load shift benefits is made more uncertain by additional risks customers may bear with dynamic rates, especially if new enabling technology is not widely adopted.

While SDCP is not required to propose dynamic rates where such rates are not determined to materially reduce peak load, SDCP has determined that, for the reasons set forth in this Plan, the LMS requirements must be modified to provide a more cost-effective and technologically feasible way for SDCP to, in good faith, meet the LMS requirements and achieve the LMS goals. Thus, SDCP proposes to modify the dynamic rate requirements of the LMS to defer the development or proposal of new hourly or sub-hourly rate options, and offering new rates to SDCP’s customers would be likewise deferred.

SDCP believes proposing dynamic rates to our Board by July 1, 2025, to implement them by July 1, 2027, is premature. SDCP will continue offering our suite of time-dependent rates while gathering information for analysis once data is available from dynamic rate pilots in SDG&E’s service area. The results of the pilots will help SDCP better understand the effectiveness of the pilot approach, how customers with different technologies respond to different dispatch signals, and to what extent incremental load shift opportunities exist beyond existing time-dependent rates and programs. As SDCP receives and analyzes results from those pilots, SDCP will be better positioned to evaluate the cost-effectiveness and flexibility of dynamic rates. SDCP will review dynamic rates in the next Plan update.

7.4 Dynamic Response Load Flexibility Programs

7.4.1 Identification of Cost-Effective Load Flexibility Programs Adopted LMS amendments section 1623.1(b)(3) requires each Large CCA to submit a list of cost-effective MIDAS-integrated load flexibility programs to the CEC Executive Director by October 1, 2024.

As discussed in Section 5.3, adding or modifying programs to allow response to MIDAS signals has not yet been determined to result in material incremental reductions in peak load for any customer class or to be cost effective. This is in part due to the uncertainties in incremental peak load reduction potential 39 and customer acceptance when introducing hourly or sub-hourly price signals and exposure to market price spikes and volatility.

SDCP is required to identify MIDAS-integrated dynamic load flexibility programs for customer classes where such programs are determined to be cost-effective and materially reduce peak load. SDCP anticipates submitting a list that includes planned load flexibility programs and pilots that achieve LMS goals without automated response to MIDAS signals, by October 1, 2024, because SDCP’s evaluation has not concluded that developing and implementing programs or pilots with automated response to MIDAS would be cost-effective or materially reduce peak load. SDCP has determined that modifying this requirement is necessary to provide a more cost-effective and feasible way to meet the LMS requirements and achieve the LMS goals. Thus, SDCP will evaluate the cost-effectiveness and incremental peak load reduction potential associated with incorporating automated response to MIDAS signals into new pilots and include on a future list as appropriate.

7.4.2 Voluntary Participation in Cost-Effective Load Flexibility Programs Adopted LMS amendments section 1623.1(b)(4) requires each Large CCA to offer customers voluntary participation in either a dynamic rate, if approved by the Board, or cost-effective MIDAS-integrated load flexibility program by July 1, 2027.

SDCP is required to offer voluntary participation in cost-effective load flexibility programs that materially reduce peak load. As discussed in Sections 5 and 7.4.1 above, SDCP’s evaluation has been unable to conclude that developing and implementing new load flexibility programs or pilots with automated response to MIDAS signals would be cost effective or materially reduce peak load. SDCP has determined that, for the reasons set forth in this Plan, the LMS program participation requirements must be modified to provide a more cost-effective and technologically feasible way for SDCP to, in good faith, meet the LMS requirements and achieve the LMS goals. Thus, SDCP modifies this requirement to include voluntary participation in any load flexibility program or pilot, not just programs that allow for automated response to MIDAS signals. SDCP will assess the cost-effectiveness and peak load potential of planned and new programs that enable automated response to MIDAS signals as SDCP develops and refines load flexibility programs.
40 Appendix A
The following are the RINs associated with each of SDCP’s rates and rate permutations that were uploaded to MIDAS.

RIN Rate Permutation
USCA-XXSA-0001-0000 G-A6-TOU-P 2020 Vintage
USCA-XXSA-0002-0000 G-A6-TOU-P 2021 Vintage
USCA-XXSA-0003-0000 G-A6-TOU-P 2022 Vintage
USCA-XXSA-0004-0000 G-A6-TOU-T 2020 Vintage
USCA-XXSA-0005-0000 G-A6-TOU-T 2021 Vintage
USCA-XXSA-0006-0000 G-A6-TOU-T 2022 Vintage
USCA-XXSA-0007-0000 G-AL-TOU-P 2020 Vintage
USCA-XXSA-0008-0000 G-AL-TOU-P 2021 Vintage
USCA-XXSA-0009-0000 G-AL-TOU-P 2022 Vintage
USCA-XXSA-0010-0000 G-AL-TOU-S 2020 Vintage
USCA-XXSA-0011-0000 G-AL-TOU-S 2021 Vintage
USCA-XXSA-0012-0000 G-AL-TOU-S 2022 Vintage
USCA-XXSA-0013-0000 G-AL-TOU-T 2020 Vintage
USCA-XXSA-0014-0000 G-AL-TOU-T 2021 Vintage
USCA-XXSA-0015-0000 G-AL-TOU-T 2022 Vintage
USCA-XXSA-0016-0000 G-DG-R-P 2020 Vintage
USCA-XXSA-0017-0000 G-DG-R-P 2021 Vintage
USCA-XXSA-0018-0000 G-DG-R-P 2022 Vintage
USCA-XXSA-0019-0000 G-DG-R-S 2020 Vintage
USCA-XXSA-0020-0000 G-DG-R-S 2021 Vintage
USCA-XXSA-0021-0000 G-DG-R-S 2022 Vintage
USCA-XXSA-0022-0000 G-DG-R-T 2020 Vintage
USCA-XXSA-0023-0000 G-DG-R-T 2021 Vintage
USCA-XXSA-0024-0000 G-DG-R-T 2022 Vintage
USCA-XXSA-0025-0000 G-OL-TOU 2020 Vintage
USCA-XXSA-0026-0000 G-OL-TOU 2021 Vintage
USCA-XXSA-0027-0000 G-OL-TOU 2022 Vintage
USCA-XXSA-0028-0000 G-PA-T-1-P 2020 Vintage
USCA-XXSA-0029-0000 G-PA-T-1-P 2021 Vintage
USCA-XXSA-0030-0000 G-PA-T-1-P 2022 Vintage
USCA-XXSA-0031-0000 G-PA-T-1-S 2020 Vintage
USCA-XXSA-0032-0000 G-PA-T-1-S 2021 Vintage
USCA-XXSA-0033-0000 G-PA-T-1-S 2022 Vintage
USCA-XXSA-0034-0000 G-PA-T-1-T 2020 Vintage
USCA-XXSA-0035-0000 G-PA-T-1-T 2021 Vintage
USCA-XXSA-0036-0000 G-PA-T-1-T 2022 Vintage
USCA-XXSA-0037-0000 G-TOU-A-P 2020 Vintage
41 RIN Rate Permutation
USCA-XXSA-0038-0000 G-TOU-A-P 2021 Vintage
USCA-XXSA-0039-0000 G-TOU-A-P 2022 Vintage
USCA-XXSA-0040-0000 G-TOU-A-S 2020 Vintage
USCA-XXSA-0041-0000 G-TOU-A-S 2021 Vintage
USCA-XXSA-0042-0000 G-TOU-A-S 2022 Vintage
USCA-XXSA-0043-0000 G-TOU-M 2020 Vintage
USCA-XXSA-0044-0000 G-TOU-M 2021 Vintage
USCA-XXSA-0045-0000 G-TOU-M 2022 Vintage
USCA-XXSA-0046-0000 G-TOU-PA-P 2020 Vintage
USCA-XXSA-0047-0000 G-TOU-PA-P 2021 Vintage
USCA-XXSA-0048-0000 G-TOU-PA-P 2022 Vintage
USCA-XXSA-0049-0000 G-TOU-PA-P Over 20kW-2020
Vintage
USCA-XXSA-0050-0000 G-TOU-PA-P Over 20kW-2021
Vintage
USCA-XXSA-0051-0000 G-TOU-PA-P Over 20kW-2022
Vintage
USCA-XXSA-0052-0000 G-TOU-PA-S 2020 Vintage
USCA-XXSA-0053-0000 G-TOU-PA-S 2021 Vintage
USCA-XXSA-0054-0000 G-TOU-PA-S 2022 Vintage
USCA-XXSA-0055-0000 G-TOU-PA-S Over 20kW-2020
Vintage
USCA-XXSA-0056-0000 G-TOU-PA-S Over 20kW-2021
Vintage
USCA-XXSA-0057-0000 G-TOU-PA-S Over 20kW-2022
Vintage
USCA-XXSA-0150-0000 A6-TOU-P 2020 Vintage
USCA-XXSA-0151-0000 A6-TOU-P 2021 Vintage
USCA-XXSA-0152-0000 A6-TOU-P 2022 Vintage
USCA-XXSA-0153-0000 A6-TOU-T 2020 Vintage
USCA-XXSA-0154-0000 A6-TOU-T 2021 Vintage
USCA-XXSA-0155-0000 A6-TOU-T 2022 Vintage
USCA-XXSA-0156-0000 AL-TOU-2-P 2020 Vintage
USCA-XXSA-0157-0000 AL-TOU-2-P 2021 Vintage
USCA-XXSA-0158-0000 AL-TOU-2-P 2022 Vintage
USCA-XXSA-0159-0000 AL-TOU-2-S 2020 Vintage
USCA-XXSA-0160-0000 AL-TOU-2-S 2021 Vintage
USCA-XXSA-0161-0000 AL-TOU-2-S 2022 Vintage
USCA-XXSA-0162-0000 AL-TOU-2-T 2020 Vintage
USCA-XXSA-0163-0000 AL-TOU-2-T 2021 Vintage
USCA-XXSA-0164-0000 AL-TOU-2-T 2022 Vintage
USCA-XXSA-0165-0000 AL-TOU-P 2020 Vintage
USCA-XXSA-0166-0000 AL-TOU-P 2021 Vintage
42 RIN Rate Permutation
USCA-XXSA-0167-0000 AL-TOU-P 2022 Vintage
USCA-XXSA-0168-0000 AL-TOU-S 2020 Vintage
USCA-XXSA-0169-0000 AL-TOU-S 2021 Vintage
USCA-XXSA-0170-0000 AL-TOU-S 2022 Vintage
USCA-XXSA-0171-0000 AL-TOU-T 2020 Vintage
USCA-XXSA-0172-0000 AL-TOU-T 2021 Vintage
USCA-XXSA-0173-0000 AL-TOU-T 2022 Vintage
USCA-XXSA-0174-0000 DG-R-P 2020 Vintage
USCA-XXSA-0175-0000 DG-R-P 2021 Vintage
USCA-XXSA-0176-0000 DG-R-P 2022 Vintage
USCA-XXSA-0177-0000 DG-R-S 2020 Vintage
USCA-XXSA-0178-0000 DG-R-S 2021 Vintage
USCA-XXSA-0179-0000 DG-R-S 2022 Vintage
USCA-XXSA-0180-0000 DG-R-T 2020 Vintage
USCA-XXSA-0181-0000 DG-R-T 2021 Vintage
USCA-XXSA-0182-0000 DG-R-T 2022 Vintage
USCA-XXSA-0183-0000 DR-SES 2020 Vintage
USCA-XXSA-0184-0000 DR-SES 2021 Vintage
USCA-XXSA-0185-0000 DR-SES 2022 Vintage
USCA-XXSA-0186-0000 EV-HP-P 2020 Vintage
USCA-XXSA-0187-0000 EV-HP-P 2021 Vintage
USCA-XXSA-0188-0000 EV-HP-P 2022 Vintage
USCA-XXSA-0189-0000 EV-HP-S 2020 Vintage
USCA-XXSA-0190-0000 EV-HP-S 2021 Vintage
USCA-XXSA-0191-0000 EV-HP-S 2022 Vintage
USCA-XXSA-0192-0000 EV-TOU 2020 Vintage
USCA-XXSA-0193-0000 EV-TOU 2021 Vintage
USCA-XXSA-0194-0000 EV-TOU 2022 Vintage
USCA-XXSA-0195-0000 EV-TOU-2 2020 Vintage
USCA-XXSA-0196-0000 EV-TOU-2 2021 Vintage
USCA-XXSA-0197-0000 EV-TOU-2 2022 Vintage
USCA-XXSA-0198-0000 EV-TOU-5 2020 Vintage
USCA-XXSA-0199-0000 EV-TOU-5 2021 Vintage
USCA-XXSA-0200-0000 EV-TOU-5 2022 Vintage
USCA-XXSA-0201-0000 LS-2-AD 2020 Vintage
USCA-XXSA-0202-0000 LS-2-AD 2021 Vintage
USCA-XXSA-0203-0000 LS-2-AD 2022 Vintage
USCA-XXSA-0204-0000 OL-TOU 2020 Vintage
USCA-XXSA-0205-0000 OL-TOU 2021 Vintage
USCA-XXSA-0206-0000 OL-TOU 2022 Vintage
USCA-XXSA-0207-0000 PA-T-1-P 2020 Vintage
USCA-XXSA-0208-0000 PA-T-1-P 2021 Vintage
43 RIN Rate Permutation
USCA-XXSA-0209-0000 PA-T-1-P 2022 Vintage
USCA-XXSA-0210-0000 PA-T-1-S 2020 Vintage
USCA-XXSA-0211-0000 PA-T-1-S 2021 Vintage
USCA-XXSA-0212-0000 PA-T-1-S 2022 Vintage
USCA-XXSA-0213-0000 PA-T-1-T 2020 Vintage
USCA-XXSA-0214-0000 PA-T-1-T 2021 Vintage
USCA-XXSA-0215-0000 PA-T-1-T 2022 Vintage
USCA-XXSA-0216-0000 TOU-A-2-P 2020 Vintage
USCA-XXSA-0217-0000 TOU-A-2-P 2021 Vintage
USCA-XXSA-0218-0000 TOU-A-2-P 2022 Vintage
USCA-XXSA-0219-0000 TOU-A-2-S 2020 Vintage
USCA-XXSA-0220-0000 TOU-A-2-S 2021 Vintage
USCA-XXSA-0221-0000 TOU-A-2-S 2022 Vintage
USCA-XXSA-0222-0000 TOU-A-3-P 2020 Vintage
USCA-XXSA-0223-0000 TOU-A-3-P 2021 Vintage
USCA-XXSA-0224-0000 TOU-A-3-P 2022 Vintage
USCA-XXSA-0225-0000 TOU-A-3-S 2020 Vintage
USCA-XXSA-0226-0000 TOU-A-3-S 2021 Vintage
USCA-XXSA-0227-0000 TOU-A-3-S 2022 Vintage
USCA-XXSA-0228-0000 TOU-DR 2020 Vintage
USCA-XXSA-0229-0000 TOU-DR 2021 Vintage
USCA-XXSA-0230-0000 TOU-DR 2022 Vintage
USCA-XXSA-0231-0000 TOU-DR-1 2020 Vintage
USCA-XXSA-0232-0000 TOU-DR-1 2021 Vintage
USCA-XXSA-0233-0000 TOU-DR-1 2022 Vintage
USCA-XXSA-0234-0000 TOU-ELEC 2020 Vintage
USCA-XXSA-0235-0000 TOU-ELEC 2021 Vintage
USCA-XXSA-0236-0000 TOU-ELEC 2022 Vintage
USCA-XXSA-0237-0000 TOU-M 2020 Vintage
USCA-XXSA-0238-0000 TOU-M 2021 Vintage
USCA-XXSA-0239-0000 TOU-M 2022 Vintage
USCA-XXSA-0240-0000 TOU-PA-2-P 2020 Vintage
USCA-XXSA-0241-0000 TOU-PA-2-P 2021 Vintage
USCA-XXSA-0242-0000 TOU-PA-2-P 2022 Vintage
USCA-XXSA-0243-0000 TOU-PA-2-S 2020 Vintage
USCA-XXSA-0244-0000 TOU-PA-2-S 2021 Vintage
USCA-XXSA-0245-0000 TOU-PA-2-S 2022 Vintage
USCA-XXSA-0246-0000 TOU-PA-3-P 2020 Vintage
USCA-XXSA-0247-0000 TOU-PA-3-P 2021 Vintage
USCA-XXSA-0248-0000 TOU-PA-3-P 2022 Vintage
USCA-XXSA-0249-0000 TOU-PA-3-P Over 20kW-2020
Vintage
44 RIN Rate Permutation
USCA-XXSA-0250-0000 TOU-PA-3-P Over 20kW-2021
Vintage
USCA-XXSA-0251-0000 TOU-PA-3-P Over 20kW-2022
Vintage
USCA-XXSA-0252-0000 TOU-PA-3-S 2020 Vintage
USCA-XXSA-0253-0000 TOU-PA-3-S 2021 Vintage
USCA-XXSA-0254-0000 TOU-PA-3-S 2022 Vintage
USCA-XXSA-0255-0000 TOU-PA-3-S Over 20kW-2020
Vintage
USCA-XXSA-0256-0000 TOU-PA-3-S Over 20kW-2021
Vintage
USCA-XXSA-0257-0000 TOU-PA-3-S Over 20kW-2022
Vintage
USCA-XXSA-0264-0000 TOU-A-P 2020 Vintage
USCA-XXSA-0265-0000 TOU-A-P 2021 Vintage
USCA-XXSA-0266-0000 TOU-A-P 2022 Vintage
USCA-XXSA-0268-0000 TOU-A-S 2020 Vintage
USCA-XXSA-0269-0000 TOU-A-S 2021 Vintage
USCA-XXSA-0270-0000 TOU-A-S 2022 Vintage
USCA-XXSA-0272-0000 TOU-DR-2 2020 Vintage
USCA-XXSA-0273-0000 TOU-DR-2 2021 Vintage
USCA-XXSA-0274-0000 TOU-PA-P 2020 Vintage
USCA-XXSA-0275-0000 TOU-PA-P 2021 Vintage
USCA-XXSA-0276-0000 TOU-PA-P 2022 Vintage
USCA-XXSA-0277-0000 TOU-DR-2 2022 Vintage
USCA-XXSA-0278-0000 TOU-PA-S 2020 Vintage
USCA-XXSA-0279-0000 TOU-PA-S 2021 Vintage
USCA-XXSA-0280-0000 TOU-PA-S 2022 Vintage

SAN DIEGO COMMUNITY POWER
Staff Report – Item 19
-------------------------------------------------------------------------------------------------------------------- To: San Diego Community Power Board of Directors
From: Laura Fernandez, Director of Regulatory & Legislative Affairs Patrick Welch, Senior Legislative Manager
Stephen Gunther, Senior Regulatory Analyst
Via: Karin Burns, Chief Executive Officer
Subject: Update on Regional Grid Developments
Date: February 22, 2024
--------------------------------------------------------------------------------------------------------------------

RECOMMENDATIONS
Receive and file the update on regional grid developments.

BACKGROUND
Staff will present on efforts to increase coordination among grid operators throughout the Western U.S.

ANALYSIS AND DISCUSSION
There are 38 balancing authority areas (BAAs) in the Western United States. These are federally regulated organizations responsible for transmission planning, resource adequacy, power market operations and grid reliability in their respective regions. Each BAA has its own federally approved tariff that lays out the market rules and operations for that BAA. The California Independent System Operator (CAISO) is the main BAA in California. San Diego Community Power (SDCP) operates within the CAISO footprint and is subject to the rules of the CAISO tariff. The CAISO and every other BAA in the West can transfer power amongst each other, but they must do so in accordance with their own tariffs and market rules. This makes sharing power across the 38 balancing authorities challenging.

There has been a policy discussion for the past decade about how to reduce the barriers between BAAs so there is more efficient sharing of power. This discussion is commonly referred to as regionalization. Regionalization is not a single concept, but rather an array of ideas with many different variables. Grid regionalization can take many different forms.

It is being discussed and debated because eight out of 11 states in the West, and a major utility in a ninth state, have adopted requirements or goals to replace fossil fuel generation with renewable and carbon free generation. California is a leader in this regard, having adopted SB 100 (De Leon) in 2018 and SB 1020 (Laird) in 2022, which collectively put the state on track to have a 100% renewable and zero-carbon grid by 2045.

This shared vision across the West is driving fundamental changes in how electricity is delivered and managed, and how reliability of the grid is achieved. According to the Western Electricity Coordinating Council (WECC), which is tasked by the federal government with overseeing the 38 BAAs in the West, nearly 45 gigawatts (GWs) – enough to power 30 million homes – of 24/7 capable, fossil fuel power plants have, or will be retired, between 2013 and 2033. At the same time, at least 95 GWs of new resources, 80% of which are variable resources, such as wind and solar, will be added in the Western U.S. Additionally, due to electrification policies and the growth of data centers, annual energy use and peak demand will increase by 16% over the next 10 years, meaning utilities and grid operators will need more installed capacity to deliver power in the evenings when power is needed most.

The shift from a predominantly 24/7 capable generation fleet to one that is weather dependent and variable, combined with the increase in energy demand growth, means that grid operators – BAAs like CAISO – need new tools to better balance supply and demand to maintain reliability. Regionalization – in whatever form it takes – has emerged as a key tool to better manage a variable based grid because removing barriers between the 38 BAAs can make it easier and more economic to trade power between regions that have ample supply and those that don’t.

Under its existing authority, the CAISO has taken some steps to regionalize and break down barriers with other BAAs in the West. Since 2014, the CAISO has operated the Western Energy Imbalance Market (WEIM), which is a program that contains shared market rules and a shared software platform to facilitate real-time trading of energy across the West. So far, nearly 80% of BAAs in the West have elected to join the WEIM. The more efficient trading of power across a wider footprint has helped achieve power cost savings of over $5 billion, $862 million of which have been realized by the CAISO. The more efficient trading of power helps renewables displace fossil fuel generation and as a result, WEIM has helped avoid the release of greenhouse gas emissions equivalent to taking over 194,000 cars off the road. WEIM, however, only captures 5% of energy transactions.

The CAISO recently received Federal Energy Regulatory Commission (FERC) approval to offer an Extended Day Ahead Market (EDAM), which would capture a greater share of energy transactions. Both WEIM and EDAM represent a gradient of regionalization. They are both markets-only, meaning they involve the use of software and a shared tariff that governs market rules to facilitate trading. Neither of them involve other aspects that are part of the regionalization discussion, such as shared transmission planning and resource adequacy rules.

Interest from other Western BAAs in EDAM, which could go live as soon as 2026, has been tepid so far. That is largely because of CAISO governance. The CAISO is overseen by a five-member Board of Directors that is appointed by the Governor and confirmed by the State Senate (Public Utilities Code Section 337). This is a somewhat unique governance set up; many other BAAs are not governed by political appointees, but rather are governed by industry stakeholders. Without more independent governance, it may be difficult for other Western BAAs to elect to join a CAISO led EDAM.

At the same time the CAISO is leading discussions in the West to attract market participants to its’ EDAM offering, the Southwest Power Pool (SPP), based in Arkansas, is developing a product called Markets+, which would also be a day-ahead market-based mechanism to buy and sell power. Unlike CAISO, SPP is independently governed by non-political appointees. SPP has approached other Western BAAs about joining their Markets+ initiative and indeed some, like the Bonneville Power Administration, have even agreed to fund Phase 1 studies of Markets+. This is a key dynamic. If other Western BAAs are enticed to join SPP’s Markets+ over the CAISO led initiative, it could mean less benefits and efficiencies for California.

Two bills have been considered by the California Legislature to reform CAISO’s governance model and assist CAISO’s regional grid efforts. AB 813 (Holden) in 2018 and AB 538 (Holden) in 2023 both did not pass largely due to concerns expressed by some labor unions (more on this below). As a result of the failure of the two bills, a new administrative process was created called the West-Wide Governance Pathways Initiative, which is investigating the viability of five different options to make CAISO governance more amenable and facilitate participation in their regional grid efforts. The Pathways Initiative, which has participation by representatives from other Western states, is being co-led by CPUC President Alice Reynolds and CEC Vice Chair Siva Gunda.

CalCCA is participating in the Initiative. The outcome of the decision-making process in Pathways could result in state legislation in 2025.

Regionalization has been studied at great length. A summary of the studies is available in a CAISO paper that was requested by the Legislature. The main benefits of greater regional collaboration include:
• Energy resource cost savings. Studies consistently show savings from access to lower-cost resources because the market operates over a wider footprint. • Enhanced reliability & grid resilience. Grids run with predominantly variable resources are more reliable when there is a wider operating footprint. • Emission reductions. The ability to more cost-effectively share resources across a broader footprint means that more renewables can be integrated into the grid, displacing fossil fuel generation.
• Enhanced coordinated transmission planning. If transmission is coordinated by a regional entity, it can reduce congestion and costs of operating reserve requirements.

There are also some potential concerns:
• Transmission costs. Californians could pay for transmission in other states if a regional entity includes transmission development. Cost allocation could be changed in an unknown way. This would be on the SDG&E/delivery side of the bill. • Impact to California clean energy policy. In partnering with other states, California could lose some control over the future of grid operations. Much of the West, however, has a shared clean energy vision. Federal intervention is possible, but unlikely.
• Impacts to in-state jobs. Greater regional cooperation could result in more renewable/clean energy projects being built in other states. This would happen if CAISO were to regionalize via a Regional Transmission Organization (RTO), the most robust form of regionalization. If CAISO were to join or form an RTO it could impact the state’s Renewables Portfolio Standard (RPS), which requires all load-serving entities to procure 60% renewable energy by 2030 from eligible sources.

At least 75% of RPS contracts must come from resources either located in a California BAA like CAISO, or that are directly tethered to a California BAA by a powerline. While there are nuances to this requirement, it is largely viewed as an in-state resource build requirement, which was negotiated by labor unions when the RPS law was passed. It was, and continues to be, a priority of labor unions to ensure clean energy jobs are created in California.

If CAISO joins or forms an RTO, then the boundaries of the BAA could expand to include other states, which would then influence where RPS eligible resources may be built. Labor unions are concerned that the formation of an RTO could therefore result in job loss in California. It is not clear at the moment that there is a path forward to create an RTO. The development of an RTO would require state legislation and federal approval, all of which would take considerable time. Any RTO would be unlikely to start operation prior to 2030 when the 60% RPS requirement must be met. Nonetheless, jobs are a very important consideration and efforts should be made to ensure that any regional grid development supports clean energy job development in our state.

SDCP staff plans to bring a Policy Platform amendment to the Board in March for consideration on regional grid efforts, among other updates to the Platform. SDCP staff is interested in participating in regional grid development discussions to help ensure decisions made in the ongoing processes support SDCP’s goal of providing 100% renewable energy by 2035 while upholding the development of in-state clean energy jobs.

COMITTEE REVIEW
N/A

FISCAL IMPACT
N/A

ATTACHMENTS
N/A

SAN DIEGO COMMUNITY POWER
Staff Report – Item 20
-------------------------------------------------------------------------------------------------------------------- To: San Diego Community Power Board of Directors
From: Nelson Lomeli, Program Manager
Colin Santulli, Director of Programs
Via: Karin Burns, Chief Executive Officer
Subject: Approval of Pilot Project Agreement with GRID Alternatives Date: February 22, 2024
--------------------------------------------------------------------------------------------------------------------

RECOMMENDATION
Approve Pilot Project Agreement with GRID Alternatives (“GRID”) for Roof Replacements/Repairs in Connection with the Disadvantaged Communities – Single-Family Solar Homes (“DAC-SASH”) Program, in an amount not to exceed $550,000 & delegate authority to the Chief Executive Officer (“CEO”) to execute the Agreement.

BACKGROUND
At the May 25, 2023 Board of Directors (“Board”) meeting, Staff presented an update on initial pilot program concepts under exploration, including a DAC-SASH Roof Repair pilot.

DAC-SASH is a statewide program that was launched in September 2019. The program is funded by the California Public Utilities Commission (“CPUC”) and implemented statewide by GRID. The DAC-SASH program aims to overcome a common barrier of the lack of capital or credit needed to finance a solar installation. The program does this by providing a no-cost solar system installation to single-family low-income homeowners in Disadvantaged Communities (“DACs”) as identified by CalEnviroScreen 4.0.

Under the DAC-SASH program, however, roof repair or replacement work is not allowed, leaving eligible customers with roofs in poor condition behind. In discussions with GRID, Staff learned that a common barrier faced by eligible homeowners was the condition of their roofs. Many homes that would be eligible to receive a solar system were unable to proceed with the program due to the condition of their roof not being suitable to support a system and the lack of capital and funding for roof repairs/replacement.

Concurrently, Staff started engaging with the San Diego Foundation (“SDF”), the Environmental Health Coalition (“EHC”), and a coalition of other agencies on their Rooted in Comunidad, Cultivating Equity proposal to the Transformative Climate Communities (“TCC”) program. SDCP submitted a letter of support that committed leverage funding for their proposal; in the letter, SDCP noted the expectation to launch a pilot that will increase rooftop solar adoption for low-income homeowners in DACs in early 2024. In December 2023, SDF, EHC, and the coalition were notified that they were awarded $22 million for their TCC proposal.

DISCUSSION
Objective
With the DAC-SASH Readiness Pilot, Staff envisions providing no-cost roof repairs or replacement to homes that are eligible to participate in the DAC-SASH program. As a result, those homes would receive a no-cost solar system. By providing repairs or replacement of roofs, GRID would be able to enroll more homes in the DAC-SASH program and complete more solar system installations within SDCP’s service territory.

This would result in more statewide funding flowing into SDCP’s Communities of Concern and enable more low-income homeowners to access rooftop solar and its associated benefits such as lower electricity bills and clean energy.

The Readiness Pilot will also allow Staff to gather data and insights on the overall repair and/or upgrade costs of low-income homes adopting clean energy technologies. This data will better help SDCP offer holistic programs that address many potential barriers and reduce the barriers to adoption of clean energy technologies.

Incentive Levels
Recognizing that each home is unique and that some homes may require minor repair work while others may require complete roof replacements, Staff is proposing for the pilot to include an average incentive of $20,000 per home. The proposed incentive amount would allow GRID to spend more than $20,000 on homes that need more extensive work as long as the average across the entire pilot stays at or below $20,000 per home.

Budget
Because the Readiness Pilot is intended to gather data and inform future program design, a total of $500,000 has been allocated to complete roof repairs/re-roofing work. An additional $50,000 has been allocated to compensate GRID for the administration and implementation of the program. Based on incentive levels, Staff estimates that the budget would enable a maximum of twenty-five (25) homes to participate in the pilot and therefore in the DAC-SASH program.

Eligibility
Since the Readiness Pilot is meant to directly enable the installation of a no-cost solar system paid by the DAC-SASH program, eligibility criteria for the pilot will be the same as the DAC-SASH program with a few changes articulated in bullet point two and three:
• Meet the eligibility requirements for the DAC-SASH program, which include:
o Receive electrical service from an investor-owned utility (CCA customers are allowed).
o Own and occupy a single-family home as the primary residence. o Be located in a Disadvantaged Community as identified by the CalEnviroScreen 4.0 map with a percentile score of 75% or higher. o Total household income must not be more than the income limits for the California Alternate Rates for Energy (“CARE”) or Family Electric Rate Assistance (“FERA”) programs.
• Have a home within SDCP’s service territory with an active SDCP account. o Must not have opted out of SDCP’s service or had their account terminated/pending termination.
 Customers that previously opted out and are eligible to return may re-enroll in SDCP service and qualify for the Pilot.
• Enroll in the DAC-SASH program and complete the installation of a solar system.

Implementation
Staff will enter into an agreement with GRID to implement the Readiness Pilot. Staff selected GRID to implement the Readiness Pilot for the following reasons:

1. They are the statewide implementer of the DAC-SASH program and were selected by the CPUC through a competitive bid process.

2. They are able to identify and contact eligible households. GRID would be tasked with identifying new and previously eligible homes to participate in the pilot.

3. They are able to ensure homes enroll and participate in the DAC-SASH program.

4. They are able to streamline work processes to ensure roofing work and installation of solar systems are coordinated properly with as minimal of an impact to the homeowner.

In addition, having GRID implement the Readiness Pilot would introduce administrative and outreach efficiency. They would be responsible for contracting with 2-3 licensed contractors to complete the roof repair/replacement work as well as contract with B-class licensed contractors to complete ancillary repairs and/or construction.

Allowable Work
The incentive would pay for the labor by licensed C-39 roofing contractors and materials needed to complete the repair or re-roofing work required to support the installation of a solar system. This can include, but is not limited to roof decking, flashing, underlayment, and/or shingle or tile replacement. The Readiness Pilot, however, would not allow for the payment of any costs covered by the DAC-SASH program such as the cost of the solar system itself and/or any costs associated with the mounting and electrical connection of solar systems or battery energy storage systems (“BESS”).

Ancillary Work and Battery Energy Storage Systems
While the Pilot does not allow for the incentive to pay for the installation of BESS, it does allow for minor work and/or construction that will enable the installation of a BESS alongside the installation of a solar system. For example, the construction of a minor structure to house the battery modules or other components may be included but the cost to install a BESS would need to be paid by other programs such as the Self-Generation Incentive Program (“SGIP”) or SDCP’s upcoming battery storage program.

Targeted Outreach
As part of SDCP’s support for SDF and EHC’s TCC project (Rooted in Comunidad, Cultivating Equity), Staff is proposing that 80% of the pilot’s funds be targeted towards homes that are within the TCC project area, which encompasses San Diego’s central historic barrios (i.e, Logan, Stockton, Grant Hill, Mt. Hope, Sherman, Southcrest, and Shelltown). Participation in the Pilot would not be exclusive to homes in the TCC project area but targeted outreach in these areas would be conducted by GRID.

NEXT STEPS
Pending Board approval of the pilot and contract, work with GRID would begin in late February 2024, with GRID starting to identify and enroll homes in Spring 2024. Roofing work would commence shortly thereafter.

FISCAL IMPACT
The Pilot includes $500,000 for repairs and re-roofing work from SDCP’s approved Capital Improvement Plan (“CIP”) and $50,000 for administrative services.

ATTACHMENTS
Pilot Project Agreement Between San Diego Community Power And Grid Alternatives, Inc.
55682.00001\41835333.2

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San Diego Community Power Board of DirectorsFebruary 22, 2024

San Diego Community Power Board of Directors
February 22, 2024