Board of
Directors
Regular Meeting
August 22, 2024
Welcome
&
Call to
Order
Roll
Call
4 Land
Acknowledgement
Eddie Price
Special Recognition
Outgoing CAC Member, City of San Diego
7 Warm Welcome!
Dr. Hanlu Huang
Data Scientist
Vincenzo Tarantino
Marketing Manager
Aja, Holmes
Senior Settlements Analyst
Jose Tapia
Information Technology System Engineer
Melissa Elder
Community Engagement Associate
Items to
be Added,
Withdrawn
or
Reordered
on the
Agenda
Public
Comment
for Items
NOT
on the
Agenda
10 Closed
Session
Agenda
1. PUBLIC EMPLOYEE PERFORMANCE EVALUATION
PURSUANT TO GOVERNMENT CODE SECTION
54957
Title: Chief Executive Officer
2. CONFERENCE WITH LABOR NEGOTIATORS
PURSUANT TO GOVERNMENT CODE SECTION
54957.6
Agency designated representative(s): General Counsel
Unrepresented employee: Chief Executive Officer
Public
Comment
on Closed
Session
CLOSED
SESSION
RECESS
13 Open Session GENERAL COUNSEL REPORT FROM
CLOSED SESSION
14 Consent
Agenda
1. Approve June 27, 2024, Meeting Minutes
2. Receive and File Treasurer’s Report for Period Ending May 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 Local Government Affairs
8. Receive and File Update on Community Advisory Committee
9. Receive and File Update on IT and Data Analytics
10.Receive and File Update on Regulatory and Legislative Affairs
11.Adoption of Resolution No. 2024-05, approving a revision to the SD Community Power’s Conflict of Interest Code
Public
Comment
for
Consent
Agenda
16 Regular
Meeting
Agenda
12. Approve Third Amendment to the Chief Executive Officer Employment Agreement
13. Approval of Community Advisory Committee (CAC)
Appointment for the City of San Diego
14. Quarterly Report on Community Advisory Committee
15. Approve Legal Counsel Agreement with Chapman and Cutler LLP
16. Approve contracts for vendors selected in the 2024 Request for Proposals (RFP) for Professional Services for Energy Trading Risk Management
17. Board Consideration of Establishing an Ad Hoc Committee to Review Existing San Diego Community Power Board and
Committee Compensation and Reimbursement Policy; and, if established, Chair Appointment of Members to the Committee 17 Item No. 12 Approve Third Amendment to the Chief
Executive Officer Employment Agreement
Recommendation:
Approve Third Amendment to Chief Executive
Officer Employment Agreement
Presenter:
Veera Tyagi, General Counsel
Public
Comment
for Item
No. 12
19 Item No. 13
Approval of Community Advisory Committee (CAC)
Appointment for the City of San Diego
Recommendation:
Approve the Appointment of Luis Montero-Adams
to the CAC for the City of San Diego
Presenter:
Xiomalys Crespo, Senior Community Engagement Manager
20 Membership Criteria & Selection Process
• The Community Advisory Committee (CAC) includes 2 members from each member agency.
• Appointments are to prioritize residents from diverse social, economic, and racial backgrounds that are representative of all residents within Community Power's service territory.
• Staff promoted the vacancy via social media, the Board of Directors, the CAC and directly engaging with member agency staff and the public in the City of San Diego; and worked with Director LaCava's staff to review applications, conduct interviews, and determine a nomination for appointment based on Membership Terms & Criteria.
• Director and Chair LaCava has nominated Luis Montero-Adams.
Public
Comment
for Item
No. 13
22 Item No. 14
Quarterly Report on Community Advisory Committee
Recommendation:
Receive and File Community Advisory Committee
Quarterly Report
Presenter:
Matthew Vasilakis, Community Advisory Committee Chair
23 Quarterly Report on Community Advisory Committee
April through June 2024
Topics Discussed
• Vehicle-Grid Integration Strategy Overview
• Power100 CAC Ad-Hoc Committee Updates
• Power100 Green+ Service Level
• PowerBase Service Level
• Update on Community Power's Strategic Plan
• FY 2024-25 Community Power Budget
• Regulatory and Legislative Affairs Update
• Solar Battery Savings Program
CAC Member David Harris (La Mesa)
volunteers at the Grossmont College
Sustainability Fair in April 2024
24 Quarterly Report on Community Advisory Committee
July 2024
2024 – 2025 Community Advisory Committee Officers
Chair: Matt Vasilakis (City of San Diego)
Vice-Chair: Lawrence Emerson (National City)
Secretary: Aida Castañeda (Secretary)
CAC Chair Matthew Vasilakis
(City of San Diego) throws the
first pitch at the San Diego
Padres game on July 10, 2024
CAC Members David Harris (La Mesa) and Aida
Castañeda (National City) attend the 2024 Pride Parade
Ken Hoyt (Imperial Beach)
attends Community Power July
Events
Public
Comment
for Item
No. 14
26 Item No. 15
Approve Legal Counsel Agreement with
Chapman and Cutler LLP
Recommendation:
Approve Legal Counsel Agreement with
Chapman and Cutler LLP
Presenter:
Eric W. Washington, Chief Financial Officer
Veera Tyagi, General Counsel
Michael Berwanger, with PFM Financial Advisors
27 Chapman and Cutler LLC
Scope
• Provides advice, counsel, and subject
matter expertise to SDCP’s selection of
transaction counterparties, the negotiation
and drafting of all agreements,
documentation associated with the
transaction, and to serve specifically in the
capacity of Disclosure Counsel to SDCP.
Background
• Extensive experience in the prepaid energy
market dating back to the mid-1990s
• Worked with a variety of prepaid suppliers,
underwriters, bond issuers, and muni
purchasers
• Experience with CCAs: MCE (2), AVA (3),
SVCE (3), Pioneer (1), CPA (2)
Not-to-exceed • $300,000 - fixed fee from bond proceeds, contingent upon completion
Energy Prepayment Discussion
PFM Financial Advisors LLC 555 W. 5th Street
Suite 3500
Los Angeles, CA 90013
213.489.4075
August 22, 2024
29 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
30 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 a 9.5% savings or better. • Most recent transactions have been over 12%
31 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
32 Entities Involved in a Prepayment
Transaction
• SD Community Power – 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 • Service Providers - Municipal financial advisor, bond, tax and disclosure counsel, to support the structuring and issuance of a prepayment transaction. 33 Prepayment Timeline
Nov 7, 2023: Request-for-Proposal (RFP) was issued for Municipal Financial Advisor (MFA) Dec 28, 2023: PFM Financial Advisors LLC (PFM) was selected as MFA Feb 15, 2024: Finance and Risk Management Committee (FRMC) Prepaid Financing Presentation Feb 22, 2024: Board Presentation Prepaid Financing Presentation Apr 19, 2024: RFP issued for underwriter and legal services (bond, tax, disclosure) Aug 22, 2024: Legal counsel agreement with Chapman & Cutler for disclosure services – Potential Board approval
Sep19, 2024: FRMC - Presentation and Underwriter and Bond Issuer – Potential recommendation for Board approval of Resolution for Bond Issuer Sep 26, 2024: Board Presentation and Underwriter and Bond Issuer – Potential Board approval for Board approval of Resolution for Bond Issuer Oct 17, 20224: FRMC Presentation and Update on authorizing documents Oct 24, 2024: Prepay Transaction – Potential Board approval Nov 21, 2024: Execute prepaid agreement
Dec 5, 2024: Closing
Public
Comment
for Item
No. 15
35 Item No. 16
Approve contracts for vendors selected in the 2024 Request for Proposals (RFP) for Professional Services for Energy Trading Risk Management Recommendation:
a. Approve a contract (Attachment A) with PCI Energy Solutions with a not-to-exceed amount of $4,354,549 over the initial term of five years, and a yearly automatic renewal after the initial term, until SDCP provides a notice of termination, for Energy Trading Risk Management Subscription Software, Update and Support Services, and Hosting Services, and authorize execution by the Chief Executive Officer. b. Approve a contract (Attachment B) with cQuant.IO Inc. with a not-to-exceed amount of $1,467,707 over three years and four months, and options for two one-year extensions, for an Energy Trading Risk Management analytics platform and associated implementation, training, and consulting, and authorize execution by the Chief Executive Officer.
Presenter:
Kenny Key, Director of Power Contracts
36 What is an Energy Trading Risk Management
(ETRM) system?
CONFIDENTIAL
Front Office Middle Office Back Office
Deal Capture and Reporting Risk Modeling (VaR) Settlements & Shadow Settlements
Forecasting Credit Risk Invoicing
REC Management P&L Modeling and Reporting AP/AR Integrations 37 ETRM: Why / What / How
CONFIDENTIAL
Why SDCP needs an ETRM system?
Critical to manage contracts and portfolio, settle invoices, report on positions, and to gauge and evaluate risk
What the new ETRM system will accomplish?
Power service strategic goal “Manage portfolio to manage risk, cost, and reliability objectives through risk management tools, sufficient staffing, and staff training” Allow SDCP to have direct access to its data, reporting, and risk models How the new ETRM system will reduce risk?
Advanced stochastic and simulation-based modeling at the project and portfolio level Reduce reliance on third party contractors
38 ETRM RFP: Scope
CONFIDENTIAL
39 ETRM RFP: Timeline
CONFIDENTIAL
• January 2024: Launched RFP
• March 2024: Submissions Due
• 13 total applicants (7 main scope, 6 submitted secondary scope only) • March 2024: Shortlisting for Pilot Proof of Concept Demonstrations • 4 were shortlisted and selected for in depth demonstrations • April to July 2024: Pilot Proof of Concept Demonstrations • July 2024: Final Vendor Selections
The two vendors selected fulfill all the primary scope of the ETRM RFP and some of the secondary scope – (1) PCI Energy Solutions and (2) cQuant.IO.
The vendors scored well throughout the RFP process and their offerings were cost-competitive while providing enhanced value to SDCP versus other applicants. 40 PCI Overview
41 PCI Overview
42 cQuant Overview
43 Energy50 2024
Complex Contracts
for RM
cQuant Overview
44 cQuant Overview
45 • Approve both contracts for vendors selected in the 2024 Request for Proposals (RFP) for Professional Services for Energy Trading Risk Management
• Budget Impacts:
• Combined Do Not Exceed limits: $5,822,256
• PCI Energy Solutions: $4,354,549
• cQuant.IO: $1,467,707
• The proposed costs for ETRM vendors are included in the FY 2024-25 operating budget reviewed by the Board on June 27, 2024.
• SDCP expects these contracts to be cost neutral to the approved operating budget based on the approved ETRM vendor budget and savings in other budget items that will result from bringing these services in-house.
Staff Recommendation
Public
Comment
for Item
No. 16
47 Item No. 17
Board Consideration of Establishing an Ad Hoc Committee to Review Existing San Diego Community Power Board and
Committee Compensation and Reimbursement Policy; and, if established, Chair Appointment of Members to the Committee Recommendation:
Board Consideration of Establishing an Ad Hoc Committee (Committee) Consisting of No More Than Three (3) Board Members, to Review and Recommend Possible Amendments to the Board and Committee Compensation and Reimbursement Policy; and Chair appointment of Members to such Committee.
Presenter:
Chair Joe LaCava
48 Ad Hoc Committee Formation To Review
Existing Board and Committee Compensation
and Reimbursement Policy; Appoint Members
Public
Comment
for Item
No. 17
Report by
Chief
Executive
Officer
51 52
53 54
55 56
57 Director
Comments
Adjournment
Next Regular
Board of Directors Meeting
September 26, 2024