Board of
Directors
Regular Meeting
March 28, 2024
Welcome
&
Call to
Order
Roll Call
4 This Photo by Unknown Author is licensed under CC BY-SA Land
Acknowledgement
Warm Welcome to our New Hires!
Linda Robertson
IT Manager
Items to
be Added,
Withdrawn
or
Reordered
on the
Agenda
Public
Comment
for Items
NOT
on the
Agenda
9 Consent
Agenda
1. Approve February 22, 2024 Meeting Minutes
2. Receive and File Treasurer’s Report for Period Ending January 31, 2024
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 Community Advisory Committee Monthly Report
9. Receive and File Update on Regulatory and Legislative Affairs
10. Approve Proposed Election to Participate in State Disability Insurance
Public
Comment
for
Consent
Agenda
11 Regular
Meeting
Agenda
11.Update on Residential Solar + Storage
Program
12.Approve Amendments to SDCP Legislative &
Regulatory Policy Platform
13.Approve Resource Adequacy (RA) Agreement
with 90FI 8me LLC
12 Item 11
Update on Residential Solar + Storage Program
Recommendation:
Receive and file the update on SDCP’s Residential
Solar and Storage Program.
Presenter:
Emily Fisher, Senior Program Manager
14 Background: Analysis of Net Billing Tariff
Anticipated costs in millions
• Staff conducted an in-depth analysis and
forecast of solar growth to determine options.
• Staff determined that adopting NBT could save
all SDCP customers over $20.7 million over
three years.
• These savings will be passed onto customers
through rate savings, adders, and customer
programs, such as battery incentives.
$32
$8.5
$2.8
$0
$5
$10
$15
$20
$25
$30
$35
Extend NEM Adopt NBT
Millions
Costs over 3 Years ($ MM)
Adder
NBT provides greater economic value for installing solar + storage, than stand-alone solar.
15 Flexible Load Strategy & VPPs
SDCP’s flexible load strategy will:
• Enable customer load optimization
• Deliver direct bill savings to participants
• Reduce procurement risks and costs
• Enable lower rates for the broader community.
The flexible load resources will provide grid
services that can be considered a virtual power
plant (VPP) and enable more clean energy.
16 Power/Energy Agreements ($)
Flexible Load Strategy & VPPs
Typically, the Power Services Department has long-term agreements for energy with large developers for the power our customers use. SDCP receives energy and resource adequacy in return.
Resource Adequacy (RA) and Energy
17 Flexible Load Strategy & VPPs
Resource Adequacy (RA) and Energy
This Program will compensate our customers for the energy and resource adequacy savings SDCP will receive – keeping it local and providing value back to our customers.
Power/Energy Agreements ($)
18 Program Goals
Install solar + storage in single-family homes throughout SDCP territory (50% of incentives to Communities of Concern) Support clean energy and reliability by leveraging batteries on a daily basis during peak periods
Leverage non-SDCP incentives to support customers in
overcoming system costs
Build strong relationships with the industry and SDCP customers 19 Research for Program Development
SDCP Staff has engaged in the following tasks to develop the program:
Research on
national and
statewide programs
Discussions with
other CA CCAs
about existing or
planned programs
Engagement with
CALSSA and other
industry orgs
Interviews, feedback
and workshop with
industry
20 Program Summary
Market Rate CARE/FERA & Communities
of Concern
Solar Upfront Incentive N/A Up to $450/kW-AC1
(~15%)
Storage Upfront Incentive
$350/kWh
Useable nameplate capacity
(~20%)
Up to $500/kWh2
Useable nameplate capacity
(~30%)
Storage Performance Payment
(based on seasonally enrolled capacity)
$0.10/kWh
Based on actual performance over the dispatch period during on-peak periods. 1Up to based on if customer is eligible for other solar incentives, i.e., DAC-SASH and City of San Diego Solar Equity Program 2Up to based on if customer is eligible for other upfront storage incentives, i.e., SGIP *Percentage of estimated total cost covered by the upfront incentive 21 Example
Customer
This provides two
examples of
customer incentive
methodology,
although there are
an array of ways
incentives could be
leveraged for our
customers.
Market Rate CARE/FERA &
Communities of Concern
Solar Storage Solar Storage
Implementation Costs
System Size 7.3 kW-AC 6.8 kW / 13.6
kWh 7.3 kW-AC 6.8 kW / 13.6
kWh
Implementation Costs $25,550 $18,224 $25,550 $18,224
Unit Cost $3,500/kW $1,340/kWh $3,500/kW $1,340/kWh
Total Cost $43,774 $43,774
Incentives
Federal ITC (30%) ($7,665) ($5,467) ($0) ($0)
California SGIP ($0) ($0) ($22,630) ($14,960)
SGIP Incentive Value $0/kW $0/kWh $3,100/kW $1,100/kWh
SDCP Upfront
Incentive ($0) ($3,850) ($2,920) ($3,264)
Upfront Incentive value $0/kW $350/kWh $450/kW-AC $500/kWh Remaining Out-Of-Pocket Costs*
Total $26,792 $0
Assumptions:
• Avg. System Sizes
• Fully leverage ITC
• 60% battery participation
• Avg. System Sizes
• Unable to leverage ITC
• Eligible for SGIP
• 80% battery participation
* Performance payments will net ~$2K over 10 years for participating customers 22 Fiscal Impacts
By leveraging the batteries enrolled in
this program, the Power Services
Dept. will see savings in the RA
obligation – which will fund a portion of
the upfront incentive.
Departmental
Budget
Initial Budget FY 24-25
Upfront
Programs $0.5M $6.0M
Power – RA
Savings $0.4M $4.6M
Total Upfront Incentive Budget $0.9M $10.6M
(57% Cost Neutral)
Departmental
Budget
Initial Budget FY 24-25
Performance
Payment Power $0.4M $5.3M
(100% Cost Neutral)
The performance payment will come
from the Power Services Dept. budget
with $0.10/kWh being a reasonable
payment for energy – it’s equivalent to a
reallocated procurement expense.
200-250
customers
2,000-3,000
customers
23 Fiscal Impacts
Virtual Power Plant (VPP) Departmental
Budget
Initial Budget FY 24-25
Upfront
Programs $0.5M $6.0M
Power – RA
Savings $0.4M $4.6M
Total Upfront Incentive Budget $0.9M $10.6M
(57% Cost Neutral)
Departmental
Budget
Initial Budget FY 24-25
Performance
Payment Power $0.4M $5.3M
(100% Cost Neutral)
200-250
customers
2,000-3,000
customers
24 Next Steps
• IT Development
• Legal Review of Program Documentation
• Register contractors and battery manufacturers
• Complete program training with industry
• Program launch expected early summer
Thank You
26 Item 11
Update on Residential Solar + Storage Program
Recommendation:
Receive and file the update on SDCP’s Residential
Solar and Storage Program.
Presenter:
Emily Fisher, Senior Program Manager
27 Item 12
Approve Amendments to SDCP Legislative &
Regulatory Policy Platform
Recommendation:
Approve Amendment to SDCP Legislative &
Regulatory Platform.
Presenter:
Patrick Welch, Senior Legislative Manager
28 Legislative & Regulatory Policy Platform Amendments
First of Two Substantive Amendments
• Follows up on staff report from the February Board meeting informational presentation on regional grid developments. Regionalization is a policy discussion about better coordinating across the 38 grid operators in the West to reduce costs and enhance grid reliability. • Language allows SDCP to engage in regulatory and legislative discussions about regional grid development. The language does not prescribe a particular policy outcome but focuses on the key principles of reducing resource costs for SDCP and its customers, maintaining market transparency, and achieving renewable/clean energy goals in the quickest way possible while maintaining grid reliability. • Includes language developed in conjunction with stakeholders on in-state clean energy jobs. The amendment specifies that SDCP’s engagement to support regional grid development must maintain a commitment to an inclusive and sustainable workforce for the region, and keep jobs in California and preserve union work opportunities in California’s energy sector. 29 Legislative & Regulatory Policy Platform Amendments
Second Substantive Amendment & Clarifying Changes
• Allows SDCP to support legislative efforts that seek to facilitate the transparent use of remote public meetings. SDCP supported two Brown Act bills last year and this year has the opportunity to support AB 817 (Pacheco). It would streamline agenda disclosure requirements for remote participation in meetings of subsidiary bodies like the Community Advisory Committee.
• Clarifying changes are also proposed to the Platform. Examples include ensuring consistent terminology is used throughout and clarifying implied intent on deep decarbonization, environmental justice, and educational services.
Public
Comment
for Item 12
31 Item 12
Approve Amendments to SDCP Legislative &
Regulatory Policy Platform
Recommendation:
Approve Amendment to SDCP Legislative &
Regulatory Platform.
Presenter:
Patrick Welch, Senior Legislative Manager
32 Item 13
Approve Resource Adequacy (RA) Agreement with
90FI 8me LLC
Recommendation:
Approve the proposed 5-year Resource Adequacy
Agreement with 90FI 8me, LLC for up to 74 MW of (4-
hour) Battery Energy System Storage (BESS) capacity
and authorize the CEO to execute the agreement.
Presenter:
Byron Vosburg, Managing Director of Power Services
33 Big Rock 2: Project Summary
• Big Rock 2 is a project being developed by 90FI 8me LLC, a subsidiary of Avantus • The entire Big Rock 2 Project is expected to be 225 MW solar photovoltaic and 74/296 MWh (4-hour) lithium-ion battery
• SDCP is contracting for Resource Adequacy from the 74 MW battery • Location: Imperial County
34 Big Rock 2: Key Terms
• Product: Resource Adequacy
• Pricing: Fixed for a 5-year term
• Timeline: Guaranteed Commercial Operation Date is December 31, 2027 • Interconnection: CAISO
• Deliverability: Contract is contingent on Avantus obtaining delivery for the Big Rock 2 project via a deliverability transfer request with CAISO • SDCP would receive financial compensation in the event of seller’s failure to successfully achieve certain development milestones as well as seller’s failure to meet guaranteed resource adequacy guarantees once the project is operational. • SDCP would receive an option to contract with Avantus for a full Power Purchase Agreement for the Big Rock 2 project for deliveries beginning in 2028 should the project obtain deliverability via the transfer request with CAISO 35 Big Rock 2: Staff Analysis
• Project is in SDCP’s local territory and CAISO interconnected. • The project would contribute to SDCP’s local resource adequacy contracting goals. • Pricing is competitive with comparable product offerings received from SDCP’s recent RFPs. The long-term purchase of resource adequacy will provide SDCP with significant value and cost certainty over the term of this agreement. • Avantus is one of California’s top solar developers has developed, financed and constructed over 2,000 megawatts (MWdc) of solar in operation with more than 42,000 MW of solar photovoltaic (PV) and over 78,000 megawatt-hours (MWh) of energy storage currently under development.
36 Big Rock 2: Workforce Development and Community Benefits • The Big Rock 2 project will provide 500 peak construction jobs and 5 permanent jobs. • Avantus has signed 5-craft PLAs for all California projects, and BR2 will be no different. The project is committed to executing a Project Labor Agreement and will identify the unions involved when the agreement is negotiated.
Public
Comment
for Item 13
38 Item 13
Approve Resource Adequacy (RA) Agreement with
90FI 8me LLC
Recommendation:
Approve the proposed 5-year Resource Adequacy
Agreement with 90FI 8me, LLC for up to 74 MW of (4-
hour) Battery Energy System Storage (BESS) capacity
and authorize the CEO to execute the agreement.
Presenter:
Byron Vosburg, Managing Director of Power Services
Report by
Chief
Executive
Officer
Report by
General
Counsel
Director
Comments
Adjournment
Next Regular
Board of Directors Meeting
April 25, 2024