Board of
Directors
Regular Meeting
October 24, 2024
Welcome
and
Call to
Order
Roll
Call
4 Land
Acknowledgement
6 Warm Welcome!
Marissa Van Sant
Senior Program Manager
Items to
be Added,
Withdrawn
or
Reordered
on the
Agenda
Public
Comment
for Items
not
on the
Agenda
9 Consent
Agenda
1. Approve September 26, 2024, Meeting Minutes
2. Receive and File Treasurer’s Report for Period Ending July 31, 2024
3. Receive and File Update on Programs
4. Receive and File Update on Power Resources
5. Receive and File Update on Human Resources
6. Receive and File Update on Marketing, Public Relations, and Local Government Affairs
7. Receive and File Update on Community Advisory Committee
8. Receive and File Update on Regulatory and Legislative Affairs
9. Receive and File Update on IT and Data Analytics
10. Approve a contract with Precision NRG with a not-to-exceed amount of $575,870 through March 2026 for Refrigeration Equipment Supplier Services and authorize execution by the Chief Executive Officer
11. Approve Amendment to the Revolving Credit Agreement with JP Morgan to Increase the Credit Facility from $150,000,000 to $250,000,000
Public
Comment
for
Consent
Agenda
11 Regular
Agenda
12. Community Advisory Committee Quarterly Report
13. Adoption of Resolution No. 2024-08, Authorizing
Execution of an Energy Prepayment Transaction,
Related Documents, and ‘Form of’ Documents
Subject to Maximum Issuance Amount, Limitation
on Fees, and Minimum Required Savings
14. Fiscal Year End 2023-24 Financial Audit Progress
Report Presentation
15. Update on Customer Operations
16. Update on Flexible Load Strategy
12 Item No. 12
Recommendation:
Receive and File Community Advisory Committee Quarterly Report.
Presenter:
Matthew Vasilakis, Community Advisory Committee Chair
Community Advisory Committee Quarterly
Report
13 Quarterly Report on Community Advisory Committee
July through September 2024 (Q1)
Topics Discussed
• Ralph M. Brown Act Training
• Conflict of Interest and Ethical Conduct Policy Training • Communications Training
• Solar Battery Savings Contractor Training
• Regulatory and Legislative Affairs Update
• Community Clean Energy Grant Program
• San Diego Community Power Network
2024-2025 Officers
Chair: Matt Vasilakis (City of San Diego)
Vice-Chair: Lawrence Emerson (National City)
Secretary: Aida Castañeda (Secretary)
New CAC Member Luis Montero-Adams (City of
San Diego) being sworn in.
14 Public
Comment
for Item
No. 12
16 Item No. 13
Presenter:
Dr. Eric Washington, CFO
Adoption of Resolution No. 2024-08, Authorizing Execution of an Energy Prepayment Transaction, Related Documents, and ‘Form of’ Documents Subject to Maximum Issuance Amount, Limitation on Fees, and Minimum Required Savings
Recommendation:
Adoption of Resolution No. 2024-08, approving parameters under which an energy prepayment transaction can be completed; authorizing and approving documents or “form of” documents supporting the prepay transaction; and directing California Community Choice Financing Authority (CCCFA) to make payments to service providers for issuance costs from prepay bond proceeds. 17 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- Used since the 1990s largely for natural gas transactions • Codified in the U.S. tax law
• Over 100 transactions totaling over $75 billion completed in the U.S. – mostly for gas • Twelve energy prepayment transactions totaling $11.3 billion completed over the last few years for six California Community Choice Aggregators:
Ava Community Energy Pioneer Community Energy
Silicon Valley Clean Energy Clean Power Alliance
Marin Clean Energy Central Coast Community Energy
18 Prepayments That Have Been Completed by
Public 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
5/2024 592,270 So. Ca Pub Power Auth (Energy Prepay) Elec Anaheim Total $6,561,780
SCPPA/APU transaction in May saved over 15% on old/expensive PPAs Prepayments That Have Been Completed
by CCAs in California
Prepayment Transaction
All transactions to date have achieved @9.5% savings or better.
Most recent transactions have been over 12%
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 08/2024 1,524,180 California Community Choice Fin Auth Elec (Green) CPA Total $11,336,490
20 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. 21 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 approved
Sep 19, 2024: FRMC – Presentation and potential recommendation for Board approval of Resolution for Bond Issuer
Sep 26, 2024: Board – Presentation and potential approval of Resolution for Bond Issuer Oct 11, 2023: Bond Issuer admits SDCP Associate Member
Oct 17, 20224: FRMC – Presentation and potential recommendation for Board approval on Resolution to authorize transaction subject to parameters Oct 24, 2024: Board – Presentation and potential recommendation for Board approval on Resolution to authorize transaction subject to parameters Early Nov, 2024: Execute prepaid agreement
Early Nov, 2024: Closing date to be determined
Public
Comment
for Item
No. 13
23 Item No. 14
Recommendation:
Receive and File Financial Audit Progress Report Presentation.
Fiscal Year End 2023-24 Financial Audit
Progress Report Presentation
Presenters:
Dr. Eric Washington, CFO
Brett Bradford
Aliandra Schaffer
San Diego Community Power
Board of Directors
October 24, 2024
Introduction
• Brett Bradford, CPA
• Audit Partner
• 21 years in public accounting and performing audits of government entities
• Currently working with several CCA’s throughout California • Aliandra Schaffer
• Supervisor
• 5 years in public accounting and performing audits of governments (CCA’s)
Results of current year audit:
• The 2024 audit is near completion. We plan on reporting the following:
• Unmodified opinion – Based on our audit, the financial statements are materially accurate.
• No significant deficiencies or material weakness in
internal control noted.
Audits of the years ended June 30, 2024 and 2023
Financial Statements:
Relative Roles & Responsibilities
• Management is responsible for preparing the Financial Statements and establishing a system of internal control.
• Auditor is responsible for auditing the Financial Statements • Considering risks of material misstatement in the Financial Statements
• Considering internal controls relevant to the Financial Statements • Performing tests of year-end balances based on risk assessment • Evaluating adequacy of disclosures
Risk Assessment for the years ended
June 30, 2024 and 2023
Significant areas of focus
• Revenue recognition
• Accounts receivable and accrued revenue
• Test a sample of customer billings
• Relate total cash received during the year to revenue • Look at cash received subsequent to year-end and relate to A/R • Review revenue recognition through year-end and method for determining (accrued revenue)
• Cash and securities
• Confirmations sent to financial institutions
Risk Assessment for the years ended
June 30, 2024 and 2023
Significant areas of focus
• Accrued Cost of Electricity
• Review subsequent bills from electricity providers and cash payments • Financial Statement Note Disclosures – Complete and without bias Required Board Communications
• There were no new material
accounting policies adopted by
San Diego Community Power
throughout the period audited.
• No alternative treatments of
accounting principles for material
items in the financial statements
have been discussed with
management.
Required Board Communications
(continued)
• We have not identified any
significant or unusual
transactions or applications of
accounting principles where a
lack of authoritative guidance
exists.
• We are not expecting to propose any
adjustments to the financial
statements.
• There have been no disagreements with management concerning the scope of our audit, the application of accounting principles, or the basis for management’s judgments on any significant matters.
• We have not encountered any difficulties in dealing with management during the performance of our audit.
Required Board Communications
(continued)
Brett Bradford: 707-577-1582
Aliandra Schaffer: 707-577-1535
Questions?
Public
Comment
for Item
No. 14
35 Item No. 15
Recommendation:
Receive and File update on Customer Operations.
Presenter:
Ryan Hanke, Data Analytics Manager
Update on Customer Operations
36 Why Update Participation Tracking
• Community Power has new Service Options.
• Greater detail to see where customers are opting to and from. 37 Participation by Service Option
Changes:
- Split by Service Option
- Add Service Option Default
to see which option customers
started on by default
38 Opt Up/Down
Now captures the Service Option that a customer opted
into.
39 Opt Out
Now shows the Service Option that was opted from.
40 Opt Out Reason over Time
Now we can visualize opt out reason
trends over time.
41 Tracking Opt Outs vs Opt Downs
- More accounts have opted
down to PowerBase rather
than opting out.
- PowerBase has been valuable
in retaining customers.
Public
Comment
for Item
No. 15
43 Item No. 16
Recommendation:
Receive and File update on Flexible Load Strategy.
Presenter:
Tim Treadwell
Senior Program Manager
Update on Flexible Load Strategy
Flex Load
Strategy
Update
October 2024
45 Community Power’s Flex Load Strategy increases affordability by supporting the development of programs that:
• Reduce the use of high-cost, on-peak power by program participants and • Lower resource adequacy and energy procurement costs for all customers.
This update outlines the actions taken by Staff since January 2024 to implement the Board approved Strategy. Staff actions on implementation includes work in three areas:
• Developing Flexible Load as a Power Services resource, • Integrating Flexible Load Strategies into program design, and • Aligning programs with state policy initiatives.
Overview
46 Defining “Flexibility”
Load Flexibility describes to the ability to adjust the power of a connected device to meet the operational needs of the grid and/or customers. Flexible Load technologies can shed usage during peak load periods or shift usage to times when the grid is less congested, prices are lower, or generation is cleaner.
Image credit: https://calflexhub.lbl.gov/
47 Flexible Load as a Resource
Resource Adequacy (RA) and Energy
Power Services executes long-term agreements with large developers for the power our customers use. SDCP receives energy and Resource Adequacy in return.
Power/Energy Agreements ($)
48 Flexible Load as a Resource
Resource Adequacy (RA) and Energy
Flex Load Programs compensate customers for the energy and Resource Adequacy they provide Community Power – keeping revenues local and providing value back to our customers Power/Energy Agreements ($)
49 Operationalizing Savings
RA
Savings
Energy
Savings
Program
Funding
Program Accounting
• RA savings based on modifications to peak demand, rules (e.g., slice of day), and capacity pricing. • Energy savings based on modifications to load profiles and energy pricing. • Combined savings are allocated to support program delivery (e.g., incentives, admin, contract support).
Reporting and Controls
• Estimated RA and energy savings are tracked and included in internal reporting. • Program performance will be evaluated periodically to ensure savings align with ex-ante projections. 50 Example - SBS Funding
Upfront
Incentive
Performance
Incentive
Programs $6.5M $0
Power $5M $0.9M
Total: $11.5M $0.9M
43% Cost Neutral 100% Cost Neutral
• Upfront incentive funded in part
by avoided RA payments
• Performance payment funded as
reallocated power procurement
expense
51 Load Flexibility
Integrating Flex Load Strategies
SDREN
• Contractor Training
• Codes & Standards
• Marketplace/Incentive
Design
• DER Installation and
Commissioning
• DER Optimization
Equitable Building Decarb
• Eligible Equipment
• Incentive Design
• DER Installation and
Commissioning
• DER Optimization
Managed Charging (V1G)
• Incentive Design
• DER Optimization
Residential SBS
• Eligible Equipment
• Incentive Design
• DER Optimization
52 DERMS Platform Implementation
DERMS platform platform’s features that enable Flex
Load Strategy goals:
• DER asset class and OEM integrations
• Ability to optimize dispatch from external source (e.g., CAISO and MIDAS)
• Program management capabilities (e.g., customer
validation and onboarding, event notification and
communication tools)
• Asset monitoring, aggregation, forecasting, and
dispatch capabilities
• IT security (e.g., hosting strategy, SSO capabilities, and permissions management)
CRM Load
Forecast
Weather Markets
DERMS
OEM OEM OEM OEM
Smart Thermostat HPWH Res Battery EV Telematics
53 • Mid 2024
SDREN/BE/BYOD Residential Battery Managed Charging
DERMS Architecture - Phase I
DERMS V1G
Pilot basic operation with
Programs and Power Services
Control batteries as standalone
asset through OEM cloud
Focus on leading OEMs while
integration market develops
Approved
Sep 2024
Planned
Nov 2024
Live as of
Jun 2024
54 • Early 2025
SDREN/BE/BYOD Residential Battery Managed Charging
DERMS Architecture - Phase II
DERMS V1G
Consolidate non-vehicle assets into a single platform to enable coordinated dispatch and rate optimization Incorporate additional OEMs as available 55 SDREN/BE/BYOD Residential Battery Managed Charging
DERMS Architecture - Phase III
DERMS
• Mid 2026
V1G
Full integration of existing Flex Load program assets into a single platform to enable coordinated dispatch and rate optimization
56 0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2024 2025 2026 2027
Cumulative Eligible Devices
Solar Battery Savings Bring Your Own Device Managed charging Equitable Building Decarb San Diego REN Flex Load Implementation and Scale
2024 2025 2026 2027
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
SD REN
EBD
SBS
BYOD
V1G
* Devices estimates based on current funding and anticipated customer reach in filings or applications
Program Launch DERMS Integration
57 Next Steps
Refine methodology for operational savings calculation and tracking Continue Strategy integration into new program design
Launch DERMS platform and begin operational testing
Complete Managed Charging (V1G) vendor selection, contracting, and launch Continue Flex Load Strategy and Policy alignment (LMS, TECH, Local Development) Questions? Questions
Public
Comment
for Item
No. 16
Report by
Chief
Executive
Officer
Next Regular
Board of Directors Meeting
November 21, 2024