Board of
Directors
Regular Meeting
February 22, 2024
Welcome
&
Call to
Order
Roll
Call
4 Land
Acknowledgement
Items to
be Added,
Withdrawn
or
Reordered
on the
Agenda
Public
Comment
for Items
NOT
on the
Agenda
8 Consent
Agenda
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
12. Approve Community Clean Energy Grant Program Policy
13. Approve Ascend Analytics Pilot Extension Agreement for PowerSIMM Pilot Support Services through July 31, 2024
Public
Comment
for
Consent
Agenda
10 Regular
Meeting
Agenda
14. Appoint Members to the Finance and Risk Management
Committee
15. Approve Fiscal Year 2023-24 Operating Budget Amendment
16. Presentation on Clean Energy Prepayment Financing
17. Quarterly Report on Community Advisory Committee
18. Approve Load Management Standards Compliance Plan
19. Receive and File Presentation on Regional Grid Developments
20. Approve Pilot Project Agreement with GRID Alternatives
21. Approve Nobel Solar, LLC Power Purchase Agreement
11 Item 14
Appoint Members to the Finance and Risk
Management Committee
Recommendation:
Appoint Members to the Finance and Risk
Management Committee.
Presenter:
Joe LaCava, Chair
Public
Comment
for Item 14
13 Item 14
Appoint Members to the Finance and Risk
Management Committee
Recommendation:
Appoint Members to the Finance and Risk
Management Committee.
Presenter:
Joe LaCava, Chair
14 Item 15
Fiscal Year 2023-2024 Operating Budget
Amendment
Recommendation:
Approve Fiscal Year 2023-2024 Operating Budget
Amendment
Presenter:
Eric Washington, Chief Financial Officer
15 Budget Development Timeline
The adopted schedule for budget development is the
following.
Develop Operating
Revenue Estimate
Develop Operating
Expense Estimate
Develop financial
plan for credit rating
February March-April
Strategic planning
sessions with SDCP
Board
Staff develop
operating budgets
Baseline budget is
developed
May
FRMC Preview and
Recommend
SDCP Board Preview
and feedback
June
SDCP Board Approval July 1st Budget
Implemented
Mid-year budget
review (February)
Budget amendments
as necessary
16 Proposed FY 2023-24 Amended Budget
Net Operating Revenue
FY 2024
$1,292.5 m
Total Expenses
$1,002.3 m
Net Position
+$290.4 m
Net Operating Revenue
$1,304.3 m
FY 2024 Amended
Total Expenses
$1,071.6 m
Net Position
+$232.7 m
17 Proposed FY 2023-24 Amended Budget
Net Operating Revenue
FY 2024
$1,292.5 m
Total Expenses
$1,002.3 m
Net Position
+$290.4 m
Net Operating Revenue
$1,304.3 m
FY 2024 Amended
Total Expenses
$1,071.6 m
Net Position
+$232.7 m
+$11.8 million
Approved rate change,
effective February 1, 2024
+$69.3 million
Higher energy costs,
reduced non-energy costs
-$57.8 million
Decrease in net position
over adopted budget
18 Budget Amendment Context
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
19 Proposed FY 2023-24 Budget - Changes
Budget Changes by Category
Revenue
Cost of Energy
Board approved rate change, effective 2/1/24 which increased projected revenue.
Increased market power costs affecting all participants and in cost of market power supply.
Adopted
$1,292 m
Adopted
$948.5m
Professional
Services
Personnel
Marketing and
Outreach
General and
Administrative
Amended
$1,304 m
Amended
$1,020 m
Less than expected usage of
Professional Services
Adopted
$22.9m
Amended
$22.3m
Longer than expected lead
times to hire new positions.
Adopted
$13.2m
Amended
$11.6m
Marketing and Outreach are
slightly below budget.
Adopted
$2.9m
Amended
$2.9m
Decrease in all general and
administrative costs.
Adopted
$7.9m
Amended
$6.8m
Net Position
-$57.8 m
Programs Decrease due to
recategorization to CIP.
Adopted
$0.3m
Amended
$0.1m
Adopted Amended
Public
Comment
for Item 15
21 Item 15
Fiscal Year 2023-2024 Operating Budget
Amendment
Recommendation:
Approve Fiscal Year 2023-2024 Operating Budget
Amendment
Presenter:
Eric Washington, Chief Financial Officer
22 Item 16
Presentation on Clean Energy Prepayment
Financing
Recommendation:
Receive and file Presentation on Clean Energy
Prepayment Financing.
Presenter:
Eric Washington, Chief Financial Officer
© PFM 23
Energy Prepayment Discussion
PFM Financial Advisors LLC 555 W. 5th Street
Suite 3500
Los Angeles, CA 90013
213.489.4075
February 22, 2024
© PFM 24
Prepayment Transaction Overview
Goal – Reduce cost of power purchases by 8% or more
How – Leverage use of tax-exempt bonding capacity to secure long-term supply Background
Codified in the U.S. tax law
Used since the 1990s largely for natural gas transactions Over 100 transactions totaling over $70 billion completed in the U.S. – mostly for gas Eleven energy prepayment transactions totaling $9.8 billion completed last few years for six California Community Choice Aggregators:
East Bay Community Energy Pioneer Community Energy
Silicon Valley Clean Energy Clean Power Alliance
Marin Clean Energy Central Coast Community Energy
© PFM 25
Prepayments That Have Been Completed by CCAs in California Date Amt. ($000) Issuer Description Beneficiary
09/2021 1,234,720 California Community Choice Fin Auth Elec (Green) SVCE, EBCE 11/2021 602,655 California Community Choice Fin Auth Elec (Green) MCE 06/2022 931,120 California Community Choice Fin Auth Elec (Green) EBCE 12/2022 459,640 California Community Choice Fin Auth Elec (Green) Pioneer 01/2023 841,550 California Community Choice Fin Auth Elec (Green) SVCE 02/2023 998,780 California Community Choice Fin Auth Elec (Green) CPA 06/2023 958,290 California Community Choice Fin Auth Elec (Green) CPA 08/2023 997,895 California Community Choice Fin Auth Elec (Green) EBCE 10/2023 647,750 California Community Choice Fin Auth Elec (Green) CCCE 12/2023 1,038,285 California Community Choice Fin Auth Elec (Green) MCE 01/2024 1,101,625 California Community Choice Fin Auth Elec (Green) SVCE Total $9,812,310
All transactions to date have achieved @9.5% savings or better.
Most recent transactions have been over 12%
© PFM 26
Prepayments That Have Been Completed by Municipal Utilities in California Date Amt. ($000) Issuer Description Beneficiary
06/2006 230,845 Vernon Nat. Gas Fin Auth Nat Gas City of Vernon Elec 01/2007 209,350 Roseville Natural Gas Fin Auth Nat. Gas City of Roseville Elec 05/2007 757,055 Northern Ca Gas Auth No. 1 Nat. Gas SMUD 09/2007 887,360 Long Beach Bond Fin Auth Nat. Gas City of Long Beach 10/2007 504,445 So. Ca. Pub. Power Auth Nat. Gas Multiple MOUs 10/2007 251,695 Long Beach Bond Fin. Auth Nat. Gas City of Long Beach 08/2009 901,620 M-S-R Energy Authority Nat. Gas MID/Redding/SVP 10/2009 514,160 So. Ca Pub Power Auth (Windy Flats) Elec (Wind) LADWP, Mult. MOUs 04/2010 778,665 Cal. Statewide Comm Dev Auth Nat. Gas SMUD 2010/11 394,700 So. Ca Pub Power Auth (Milford 1 & 2) Elec (Wind) LADWP, Mult. MOUs 12/2018 539,615 Northern Ca Energy Auth Gas/Elec SMUD
Total $5,969,510
© PFM 27
Entities Involved in an Energy Prepayment Transaction
SDCP – Has existing Power Purchase Agreement(s) for clean energy Prepay Counterparty – Typically a financial institution with a commodity presence or a financial institution partnered with a commodity market participant Issuer – Bond issuing entity formed for sole purpose of selling the prepayment bonds, typically a Joint Powers Authority (“JPA”). All other CCAs have used California Community Choice Financing Authority (CCCFA)
Existing Power Supply Counterparty – Agrees to limited assignment of the existing PPA Bond Investors – Purchase the non-recourse tax-exempt prepayment bonds © PFM 28
1) SDCP limited assigns PPA to
Counterparty
2) The Counterparty delivers power
to CCCFA via a Master Power
Supply Agreement
3) SDCP and CCCFA execute a
Clean Energy Purchase Contract
4) CCCFA delivers power to SDCP
5) CCCFA issues non-recourse tax-
exempt bonds
6) CCCFA makes a prepayment to
the Counterparty for power
supply
7) SDCP makes payments to
CCCFA net of >8% savings
8) CCCFA makes debt payments
with payments from SDCP
Summary of Energy Prepayment Structure Mechanics
PPA to be
“Partially
Assigned” 1
Non-
Recourse
Tax-
exempt
Debt Debt
Service
Bond
Proceeds
SDCP
Counterparty
MWhs
Prepayment $$$
PPA Price
less Discount
MWhs
CCCFA
Clean
Energy
Purchase
Contract
2 3
4 5
6 7
8 © PFM 29
How are the Savings Generated?
The Counterparty values prepayment as an alternate source of capital funding at its higher cost of capital ~ 5%
PPA fixed price cash flows of ~$45MM annually over the life of the deal are discounted at that 5% rate to establish the upfront prepayment amount
CCCFA issues tax-exempt bonds to pay the upfront prepayment at a lower interest cost ~ 4.25% versus the counterparty’s funding rate of ~5%
CCCFA bond payments ~$40MM annually are lower than the existing ~$45MM PPA payments ~$5MM in cashflow savings are generated
Savings are quoted net of all upfront and annual transaction expenses Numbers are for illustration purposes only.
© PFM 30
How Does Limited Assignment of a Power Purchase Agreement Work? SDCP will limited assign certain rights and obligations, including the title and ownership of the energy, under the existing PPA to its Prepay Counterparty
Rights not assigned remain with SDCP. No other changes are made to the existing PPA Existing PPA Counterparty would then deliver energy to the Prepay Counterparty who has assumed responsibilities as energy purchaser under the PPA
Prepay Counterparty will then sell that energy to CCCFA. CCCFA has a separate agreement with SDCP to sell that energy to SDCP – at an 8% discount or higher SDCP will need to negotiate the limited assignment with its Existing PPA Counterparty • This will take place via a Limited Assignment Agreement © PFM 31
Favorable Risk Allocation – “Take-and-Pay” Structure
Prepay Counterparty default on energy
delivery
SDCP receives too much energy and is
unable to have Qualified Use and/or has to
meet new renewable mandates in the future
Debt obligation could obligate SDCP over
long-term
Rating agency treatment of prepay debt
Debt is non-recourse to SDCP, and SDCP’s
obligation is take and pay. Rating agencies do not
count prepay transactions as debt or fixed costs
of SDCP
Prepay Counterparty will remarket the energy to
qualified entities to ensure SDCP compliance with
Qualified Use
SDCP only pays for energy if/when Prepay
Counterparty delivers the energy
Prepay Counterparty assumes debt obligations in
the event of Prepay Counterparty default
Risk Mitigation
Guaranteed Investmnet Contract (GIC)
provider counterparty fails to perform
Documents allow for replacement of GIC provider;
Supplier is likely GIC provider (thus no additional
risk)
Key Risk – Transaction terminates and SDCP no longer receives expected savings © PFM 32
Public
Comment
for Item 16
34 Item 16
Presentation on Clean Energy Prepayment
Financing
Recommendation:
Receive and File Presentation on Clean Energy
Prepayment Financing.
Presenter:
Eric Washington, Chief Financial Officer
35 Item 17
Quarterly Report on Community Advisory
Committee
Recommendation:
Receive and File Quarterly Report on Community
Advisory Committee
Presenter:
Matthew Vasilakis, Community Advisory Committee Chair
36 Community Advisory Committee Report
November 2023 through January 2024
• Revised Scope of Work and Policies and Procedures
• Recommended Board approval of Conflict of Interest and Ethical Conduct Policy
• Approved the CAC 2024 Work Plan, which:
o Clarifies strategies to track outcomes
o Defines information-sharing protocols to activate advocacy o Adds Civic Engagement and Participation as focus area • Welcome new member Ilian Sandoval (City of Imperial Beach) Key Highlights
Community
Grant
Program
Power100
2024 CAC Ad-Hoc Committees
Public
Comment
for Item 17
38 Item 17
Quarterly Report on Community
Advisory Committee
Recommendation:
Receive and file Quarterly Report on
Community Advisory Committee.
Presenter:
Xiomalys Crespo, Community Engagement Manager
39 Item 18
Approve Load Management Standards
Compliance Plan
Recommendation:
Approve Load Management Standards
Compliance Plan
Presenter:
Aaron Lu, Senior Rates and Strategy Analyst
Stephen Gunther, Senior Regulatory Analyst
40 Load Management Standards (LMS)
Background
• Since 1974, the California Energy Commission (CEC)
has held authority over the Load Management
Standards (LMS), which focus on strategies to shape
electricity load.
• Last April, the CEC amended the existing LMS, adding
new requirements for utilities and large CCAs, including SDCP.
• The updates focus on using rates and price signals to encourage customers to shift energy usage.
41 Adoption of LMS Amendments
Requires all large utilities and 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 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.
42 Compliance Plan Requirements
All large utilities and CCAs must develop and submit a
compliance plan.
Aug. 2023
Uploaded existing
time-dependent rates
to MIDAS
April 1, 2024
Develop and submit
Compliance Plan for
Board approval
Oct. 1, 2024
CEC will implement a
statewide tool for authorized
rate data access
Oct. 1, 2024
Submit a list of
cost-effective load
flexibility programs
July 1, 2025
Submit at least one marginal
cost-based rate for Board
approval
July 1, 2027
Offer customers voluntary
participation in either a marginal
cost-based rate or cost-effective
load flexibility program
Compliance Timeline Highlights
Conduct a public information program to inform and educate customers 43 Compliance Plan Roadmap
In progress:
• Community Clean Energy Grants
Program
• 100 Percent Renewable Energy
Policy
• Time-Dependent Rates
• Customer Education and Outreach
Planned:
• Evaluate results and data of delayed
dynamic rate pilots
• Design and implement demand/load
flexibility programs, including distributed
paired solar and storage systems
• Evaluate program results for cost-effectiveness
• Reevaluate rate and program designs in
the next update of the Plan.
44 Next Steps
1. Submit Compliance Plan for Board review and approval on Feb. 22, 2024.
2. Submit Board-approved Plan to CEC by Apr. 1, 2024.
3. Submit annual reports to the CEC demonstrating Plan implementation starting on Apr. 1, 2025.
4. Review the Plan at least once every 3 years and submit a plan update to the Board if there is a material change.
Public
Comment
for Item 18
46 Item 18
Approve Load Management Standards
Compliance Plan
Recommendation:
Approve Load Management Standards
Compliance Plan
Presenter:
Aaron Lu, Senior Rates and Strategy Analyst
Stephen Gunther, Senior Regulatory Analyst
47 Item 19
Update on Regional Grid Developments
Recommendation:
Receive and File Presentation on Regional Grid
Developments.
Presenter:
Patrick Welch, Senior Legislative Manager
Stephen Gunther, Senior Regulatory Analyst
48 Grid regionalization
• The Western U.S. has over three dozen grid
operators today. There are 38 balancing authority
areas with their own market and resource adequacy
rules, and transmission planning processes.
• Regionalization is about better coordinating across
grid operators to lower power costs and increase
grid reliability. There are many forms of
regionalization and there isn’t a single prescribed
outcome.
What is it?
Source: https://www.wecc.org/Administrative/=INTRO_MOD_9- Grid%20Ops=rev2016.pdf
49 Grid regionalization
• California has already taken some steps to increase
regional coordination. The California Independent System Operator (CAISO) operates the Western Energy Imbalance
Market (WEIM) that 80% of the West uses to trade power in real-time.
• California has realized $862 million in power cost savings and avoided GHG emissions equal to over 194,000 cars
since 2014.
• Extended Day-Ahead Market (EDAM) would build on WEIM, but only one entity outside of California has indicated interest.
What steps has California already taken?
Source:
https://www.westerneim.com/Pages/About/default.aspx
50 Grid regionalization
• There is a shared clean energy vision across many
Western states. Most, but not all, states in the West have adopted a clean energy goal.
• Many 24/7 capable resources are being retired and huge amounts of variable resources are being added. Nearly
45 GWs – enough power for over 30 million homes – of 24/7 capable, fossil fuel power plant retirements plus the addition of 95 GWs of variable resources between 2013-2033.
• More electricity will be used at peak times. Energy and peak energy use will grow around 16% by 2033 and there
will be peak load timing changes.
• There are competing regional grid visions for the West.
Southwest Power Pool (SPP), based in Arkansas, has a
competing market vision and is in discussions with Western utilities and grid operators about joining.
Why is it being debated?
Source: https://www.spp.org/western-services/marketsplus/ 51 Grid regionalization
• 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 means that more renewables can be integrated into the grid, displacing fossil fuel generation.
• Enhanced coordinated transmission planning. If transmission is included a regional entity, it can reduce congestion and costs of operating reserve requirements.
***Actual benefits will be determined by many factors such as market design and participant profiles What are the potential benefits to SDCP & customers?
52 Grid regionalization
• Transmission costs. Californians could pay for transmission in other states. This is on the SDG&E side of the bill.
• Impact to California clean energy policy. In partnering with other states, California could lose some control over the grid.
Federal intervention is possible, but unlikely.
• Impacts to in-state jobs. Depending on the configuration, enhanced regional coordination could result in more renewable energy projects being built in other states because California’s renewable energy law relies on grid operator boundaries. o SDCP staff has discussed the concern with IBEW 569.
o SDCP has an Inclusive & Sustainable Workforce policy
and focuses on local project development.
What are the potential concerns?
Source: https://www.ibew.org/media-center/Articles/17Daily/1712/171207_TheElectronRevolution 53 Grid regionalization
• The Legislature. Legislation in 2018 and 2023 attempted to create a pathway for a regional grid. Both bills did not pass.
• The Legislature has also commissioned two studies.
• West-Wide Governance Pathways Initiative. The CEC
and CPUC, along with CalCCA, are participating in a
multi-state stakeholder process that is looking at a range of options for a West-wide fully organized market.
Where is it being discussed and debated?
54 Grid regionalization
• Phase 1 straw proposal is
expected mid-March.
• Stakeholders will have an
opportunity to comments.
• Phase 2 could require
legislation.
What is the status of the West-Wide Pathways process?
Phase 1
• Evaluate five proposals to establish a new regional
organization to run a market – like EDAM – with an
independent board, with services provided by CAISO.
Phase 2
• Based on outcomes from Phase 1, establish a new,
independent non-profit entity with a foundational board that is nominated by stakeholders.
Beyond
• Consider further market and policy changes that may
create additional economic and reliability benefits.
55 Grid regionalization
• CalCCA has adopted principles that support a regional entity that is contingent on preserving local autonomy for resource planning, generation preference, and transition to 100% renewable/zero-carbon.
• MCE supports regionalization in line with the CalCCA principles. • CPA supports expansion of a regional grid that accelerates decarbonization, improves transmission planning, reduces costs for ratepayers and maintains California’s ability to implement its own climate goals and protects in state jobs. • SDCP next steps: consider an amendment to SDCP’s Policy Platform at the March Board meeting SDCP can more fully participate in regional grid discussions.
CCA engagement and next steps
Public
Comment
for Item 19
57 Item 19
Update on Regional Grid Developments
Recommendation:
Receive and File Presentation on Regional Grid
Developments.
Presenter:
Patrick Welch, Senior Legislative Manager
Stephen Gunther, Senior Regulatory Analyst
58 Item 20
Approval of Pilot Project Agreement with GRID
Alternatives
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.
Presenter:
Colin Santulli, Director of Programs
59 DAC-SASH Readiness Pilot
Background
• DAC-SASH is a Statewide program funded by the California Public Utilities Commission (“CPUC”) and implemented by GRID Alternatives (“GRID”).
• The program aims to help lower the financial barriers to solar installations for low-income homeowners in Disadvantaged Communities (“DACs”) by providing a no-cost solar system installation.
• Low participation in DAC-SASH program in SDG&E territory. 60 DAC-SASH Readiness Pilot
Goal
• In implementing the program, GRID learned that some
eligible homes can’t participate due to the poor
condition of the roof not able to support a solar system for 20+ years.
• Pilot aims to overcome this barrier by providing no-cost roof repairs or replacements to DAC-SASH eligible
homes.
• Pilot seeks to increase participation in the DAC-SASH program in SDCP territory.
• Homes would be required to participate in DAC-SASH
and get a no-cost solar system.
61 DAC-SASH Readiness Pilot
Eligibility
• Staff proposes to utilize the same eligibility criteria of the DAC-SASH program:
• Own and occupy a single-family home as the primary
residence;
• Located in a Disadvantaged Community as identified by the CalEnviroScreen 4.0 map with a percentile score of 75% or higher;
• Total household income must not be more than the income limits of the CARE or FERA programs.
• Need to be an active SDCP customer or re-enroll in SDCP service.
• Sign up for DAC-SASH program and commit to installing the solar system.
62 DAC-SASH Readiness Pilot
Implementation
• GRID is the Statewide implementer of the DAC-SASH
program and is uniquely positioned to implement the
pilot. They would:
• Identify and outreach to eligible homes,
• Enroll them in the pilot and DAC-SASH program,
• Hire 2-3 licensed roofing companies to complete the
assessment and repair work, and
• Complete the solar system installation.
• Target outreach towards eligible homes located within the Transformative Climate Communities project area,
which encompasses San Diego’s central historic barrios. 63 DAC-SASH Readiness Pilot
Budget
• Total pilot budget of $550,000:
• $500,000 for incentives,
• $50,000 for GRID's administration of the pilot
• Currently budget expected to enable at least 25 homes to participate in the pilot.
64 DAC-SASH Readiness Pilot
Next Steps
• If the agreement is approved, Staff would execute
agreement with GRID and finalize Pilot Guidelines in
February.
• GRID would start identifying and outreaching to eligible homes starting in the Spring 2024 (late-March/early
April).
• Roofing work would likely commence shortly after
enrollment into Pilot and continue into the summer.
Public
Comment
for Item 20
66 Item 20
Approval of Pilot Project Agreement with GRID
Alternatives
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.
Presenter:
Colin Santulli, Director of Programs
67 Item 21
Approval of Noble Solar LLC Power
Purchase Agreement (PPA)
Recommendation: Approve a 20-year PPA with Noble
Solar LLC for a 400 MW solar photovoltaic electric
(PV) generation facility and a 400 MW (4-hour)
Battery Energy Storage System (BESS) facility
Presenter:
Karlee Mink, Portfolio Manager, Power Services
Andrea Torres, Sr. Portfolio Manager, Power Services
68 SDCP Long-Term Procurement
• Goal of 75% renewables by 2027, 100% renewables by 2035 • Long-term PPAs provide developers with a certain revenue stream against which they can finance up-front capital requirements, incentivizing new incremental renewable energy and storage buildout.
• Long-term PPAs provide power supply cost certainty in SDCP’s portfolio. • CPUC requires significant long-term purchase commitments for resource adequacy from new, incremental generation facilities that will achieve commercial operation during 2023 through 2028.
• This project came through a competitive solicitation SDCP issued in October 2022. The project was shortlisted by SDCP’s energy contract working group. 69 Purple Sage Energy Center: Project Summary
• 400 MW PV and 400 MW/1,600 MWh (4-hour) lithium-ion battery • Location: Clark County, Nevada
70 Purple Sage Energy Center: Key Terms
• Counterparty: Noble Solar LLC
• Product: RPS, capacity, energy and ancillary services • Pricing: Fixed for a 20-year term
• Timeline: Guaranteed Commercial Operation Date is June 30, 2027 • SDCP receives financial compensation for failure to meet certain performance requirements including but not limited to achieving certain development milestones and meeting guaranteed efficiency rates over the delivery term. 71 Purple Sage Energy Center: Staff Analysis
• The Purple Sage Energy Center project will contribute to SDCP’s 100% renewable by 2035 target, providing over 1,192,000 MWh of renewable energy per year, in addition to energy management and capacity benefits from battery energy storage. • With commercial operations commencing in 2027, Purple Sage Energy Center would help fulfill SDCP’s Mid-Term Reliability requirements under CPUC D.21-06-025. • Pricing is competitive with comparable product offerings received from SDCP’s recent RFPs. The long-term purchase of energy, RPS attributes, and capacity will provide SDCP with significant value and cost certainty over the term of this PPA. • Primergy Solar LLC is the developer for Noble Solar LLC and has a 19,000-MW development pipeline consisting of solar and solar + storage projects across the U.S. • Primergy Solar LLC is a developer that takes pride in their holistic approach to clean energy development, complete ecosystem management, collaborative partnerships and equitable stakeholder engagement.
72 Purple Sage Energy Center: Workforce Development and Community Benefits • The project will provide 520 construction jobs and 8 permanent jobs. • There will be Labor Agreements in the form of Work Site Agreements with:
• International Brotherhood of Electrical Workers (IBEW) • Laborers International Union of North America (LiUNA) • International Union of Operating Engineers (IUOE)
• Primergy’s Chief Operating Officer and Project Director at Purple Sage Energy Center are former IBEW workers and are now applying their craft to the Owner side of construction • The project has committed $100,000 annually to a community benefit fund to benefit SDCP customers.
Public
Comment
for Item
21 75
Item 21
Recommendation: Approve a 20-year PPA
with Noble Solar LLC for a 400 MW
solar photovoltaic electric (PV) generation facility
and a 400 MW (4-hour) Battery Energy Storage
System (BESS) facility
Approval of Noble Solar LLC
Power Purchase Agreement (PPA)
Presenter:
Karlee Mink, Portfolio Manager, Power Services
Andrea Torres, Sr. Portfolio Manager, Power Services
Report by
Chief
Executive
Officer
Report by
General
Counsel
Director
Comments
Adjournment
Next Regular
Board of Directors Meeting
March 28, 2024