Presentations — Silicon Valley Clean Energy Board of Directors, June 8, 2022

• Subtitle
New SV Clean Energy
PowerPoint Template
Item 3

PRESENTATION
• On May 11, 2022, the SVCE Board unanimously approved delegating authority to the CEO to participate in VAMO for up to SVCE’s full allocation representing ~25% of SVCE’s annual retail sales. • Since the May 2022 Board meeting, the CPUC & PG&E have extended the election deadline to July 9, 2022, to allow participants more time to incorporate VAMO allocations in their RPS Plans should they elect to take them, as well as issuing a proposed decision to allow PCC0 classifications to be retained during the transfer. • Staff has also received interest from third-parties in purchasing a portion SVCE’s VAMO share. • Staff is requesting the ability to transact excess shares of VAMO such that the transactions mirror the product mix and term of the underlying VAMO contract.
• SVCE will only engage in pricing structures tied to the market price benchmark and must have an executed third-party contract prior to accepting additional shares of VAMO beyond SVCE’s internal needs.

Item 3

PRESENTATION
VAMO Schedule Update and Amendment to
Allow Resales
rA, s1L1coN VALLEY ~ CLEAN ENERGY 2
• Amend the previous authorization for SVCE’s Chief Executive Officer (CEO) to participate in Pacific Gas and Electric’s (PG&E) Voluntary Allocation Market Offer (VAMO) for SVCE’s portion of its load ratio share and execute necessary agreements including the Voluntary Allocation Confirmation under Pacific Gas and Electric (PG&E) and SVCE Master Power Purchase and Sale Agreement and resell quantities not necessary to meet SVCE’s internal needs.
• The CEO will only exercise the delegated authority should he deem it necessary to meet long-term procurement directives, or for any resales of the allocation, and will report back to the Board in a timely fashion.

Item 3

PRESENTATION
rA, s1L1coN VALLEY ~ CLEAN ENERGY 3
• Subtitle
New SV Clean Energy
PowerPoint Template
Item 4

PRESENTATION
•
•
•
•
•
•
Item 4

PRESENTATION
Request: Delegate authority to CEO to execute necessary agreements with California Community Power for two new Geothermal Projects to meet SVCE's Mid-term Reliability Procurement Obligations for Firm Clean Resources:

1. Ormat Nevada Inc. (Ormat) Portfolio of Geothermal Proiects Expected Participation Share: 13.4% or 16.75 MW with quantity not to exceed 20.94 MW Delivery term: 20 years starting on or about June 1, 2024 Dollar authority: not to exceed $256,000,000

2. Open Mountain Energy LLC., Fish Lake Geothermal COME) Expected Participation Share: 14.0% or 1.82 MW and quantity not to exceed 2.28 MW Delivery term: 20 years starting on or about April 1, 2024 Dollar authority: not to exceed $30,000,000
2 •
•
•
Item 4

PRESENTATION
Cumulative Additions (NQC)
12,000 237 250
■
10,000 196
165
8 8,000 z
"i
~ 6,000
E
(l)
....,
Vl 4,000 >
V)
2,000
50 -
0 0
2023 2024 2025 2026
Axis Title
■ Non-Specific RA Capapacity ■ Zero-Emitting Peak Resources* ■ Long-Duration Storage ■ Firm Resources (e .g. Geothe rrnal) ■ SVCE Share
*Zero-emitting resources must be on line by 2025, however for illustrative purposes we assume 1/3 will come online in 2024 as they can be used to meet an LSEs 2024 obligations. They are expected to be largely comprised of 5-hr batteries, which meet the definition of being zero-emitting and available for delivery 4-9pm daily.

11.5 GW required to come online over
the 2023 - 2026 timeframe
Capacity is shown is on Net Qualifying
Capacity ("NQC"), actual nameplate will
be higher but is dependent on exact
resource types procured.

Long-duration storage and firm clean
resources (FCR) are considered "long-lead time" and are all expected in 2026. LSEs may request extension to
2028.

LDS & FCR Procurement through CC
Power
3 •
•
•
•
Item 4

PRESENTATION
© MTR Procurement Efforts for New Capacity
CC Power RFO
MTR Requirement No 4 - Long Duration Storage (by 2026) - new storage with 8-hour minimum discharge duration
MTR Requirement No 3. - Firm Clean Resources (by 2026) - new geothermal - discuss today
Joint RFO - SVCE, Sonoma Clean Power & Central Coast Community Energy MTR Requirement No. 1- Non-specific Clean Capacity (by 2023) - new demand response, stand alone batteries as RA-only or full toll MTR Requirement No. 2- "Diablo Canyon Replacement" Zero Emitting Resources (by 2025) - new renewables paired with storage (5-hours) 4 •
•
•
•
•
•
•
•
•
Item 4

PRESENTATION
CC Power issued RFO in October 2021 (SJCE administered) Offers due December 13, 2021
6 bidders, 16 projects all but one for geothermal
Projects located in Nevada and California
CA projects located in CAISO were priced substantially higher Project Oversight Committee evaluated offers & recommended shortlist:

Portfolio of projects from Ormat Nevada, Inc. (Ormat)
Open Mountain Energy LLC (OME) Fish Lake Geothermal
CC Power Board approved three resolutions on May 31, 2022:

1. Resolution 22-05-02 Waiver of 60-day Notice of Intent for the Fish Lake Geothermal and Ormat Geothermal Portfolio Projects.

2. Resolution 22-05-03 Approval of Fish Lake Geothermal Project and Authorization to Execute Associated Agreements.

3. Resolution 22-05-04 Approval of Ormat Geothermal Portfolio Project and Authorization to Execute Associated Agreements.
5 Counterparty Project Name Term
Nameplate
MW
NQC
MW
Open Mountain
Energy, LLC Fish Lake Geothermal LLC
4/2024 to
4/2044 13 10.9
Ormat Nevada, Inc. Truckhaven
6/2025 to
6/2045 25 20.5
Ormat Nevada, Inc. Baltazor
6/2024 to
6/2044 20 17.1
Ormat Nevada, Inc. Lone Mountain
2/2026 to
2/2046 20 16.4
Ormat Nevada, Inc. Crescent Valley
10/2025 to
10/2045 20 12.9
Ormat Nevada, Inc. Gerlach
6/2025 to
6/2045 20 16
Ormat Nevada, Inc. Coyote Canyon
8/2024 to
8/2044 25 19
Ormat Nevada, Inc. Dixie Comstock
6/2025 to
6/2045 20 16
SVCE Share of CC Power FCR Portfolio = 14% OME and 13.4% Ormat Item 4

PRESENTATION
FCR Portfoio • CC Power
l.ls!edit-.s«cnts• 0
9-·Ba.:aza
9--eo,o,,ca,,ai
9 C>mat·im<>!lll'alley
9 Dme<llms<o<t-C>mat o--()TT\at.LoneJ.bmll
9 0m-at-1""""'"'1
Qoi,.,""'1""fnogJL1C-l.-.i..-pr,j<cts
Base map
.....

Gcrgie My Maps
All projects are outside of the CAISO, therefore need import capability into California to count as Resource Adequacy, a requirement for the FCR procurement mandate 6
• Seller
– Ormat Nevada Inc.
• Buyer– CC Power
• Developer – Ormat Nevada Inc.
• Technology – Incremental Geothermal
• Project – portfolio of facilities in NV and CA with
a min of 64 MW and a max of 125 MW
• Product– Energy, PCC1, full capacity rights
• Location – Various locations in Nevada and
California
• Expected COD – Varies with project, as early as
2024
• Price – Fixed $/MWh, no escalation
• Term – 20 years
Item 4

PRESENTATION
7 • Ormat to offer Facilities as they become available
• Minimum 65 MW - ~485 GWh/year
• Maximum 125 MW - ~952 GWh/year
• SVCE’s share of Portfolio is 13.4%
• Minimum 8.58 MW - ~65 GWh/year
• Maximum 16.75 MW - ~127 GWh/year
• Participating CC Power members may accept or reject within 3 months • Lack of import capability
• Volume not needed
• Facilities that are accepted become part of the portfolio • If a Facility is rejected the min required offer amount is reduced by a commensurate volume
Item 4

PRESENTATION
8 Open Mountain Energy Fish Lake Project
• Seller – Fish Lake Geothermal, LLC
• Buyer - Developer – Open Mountain Energy, LLC
• Technology – Incremental Geothermal
• Project size – 13 MW, ~107 GWh/year
• Product – Energy, PCC1, full capacity rights
• Location – Esmeralda County, Nevada
• Expected COD – June 1, 2024
• Price – Fixed $/MWh, no escalation
• Term – 20 years
SVCE’s share: 1.82 MW - ~15 GWh/year
Item 4

PRESENTATION
FCR Participating Members
Item 4

PRESENTATION
CleanPowerSF
Central Coast
Community
Energy
Participant
Central Coast Community Energy
Clean Power San Francisco
Peninsula Clean Energy
Redwood Coast Energy Authority
San Jose Clean Energy
Silicon Valley Clean Energy
Sonoma Clean Power Authority
Valley Clean Energy
/:\ PENINSULA ~ CLEAN ENERGY -

REDWOOD COAST
Energy Authority
Ormat
Entitlement
Share%

17.90%

13.90%

17.10%

3.20%
SANJOSE ,' 11/

CLEAN ENERGY
A Program of the City of San Jose
~ Sonoma ~ Clean Power
Ormat
Entitlement
Share MW

22.38 17.38

21.38 4.00
OME Entitlement
Share%

18.60%

14.50%

17.80%

2.80%
f'/j' SILICON VALLEY ~ CLEAN ENERGY
OME
Entitlement
Share MW

2.42 1.89

2.31 0.36
Total
Entitlement
MW

24.80 19.27

23.69 4.36 - -- -- -- -
-

19.60%

13.40%

11.20%

3.70%
100%
--

24.50 16.75

14.00 4.63
125.00
--

17.40%

14.00%

11.70%

3.20%
100%
--

2.26 1.82

1.52 0.42

13.00 26.76

18.57 15.52

5.05 138.02
-
10 Mid-term Reliability Procurement Order
• D.21-06-035 adopted by
CPUC on June 24, 2021 to
address mid-term reliability
needs
• 1,000 MW of FCR by June
2026
• Minimum 10-year term
• Adjusted for Effective Load
Carrying Capacity (ELCC)
• Each Participating Member
seeking authority to cover:
• Contingency should not all
CCA's gain board authority
for OME; and
• 25% step-up for both
CCA NQC MW Obligation
Central Coast Community Energy 25.5
CleanPowerSF 15.5
Peninsula Clean Energy 19.0
Redwood Coast Energy 3.5
San José Clean Energy 21.5
Silicon Valley Clean Energy 20.5
Sonoma Clean Power 12.5
Valley Clean Energy 4.0
Total 122
If all Ormat capacity is provided, Ormat and OME contracts meet 100% of Participating Members FCR Obligation adjusted for ELCC Item 4

PRESENTATION
11 Item 4

PRESENTATION
SVCE will meet it's MTR obligation for firm clean resources MTR
FCR/Geotherma I
Requirement NQC
MW

20.5 SVCE Executed
Remaining Need
Geothermal

NQCMW PPA

6.51 13.99
SVCE's Share of
CC Power FCR
Procurement
NQCMW

18.6 Net Open
Position
+Surplus/(-)
Deficit NQC MW

4.61 12
Item 4

PRESENTATION
Ormat and OME Geothermal contribute towards RPS & S8350 Requirements

1. State Mandated RPS per Compliance Period - % of Retail Sales

2. State Mandated % of Mandated RPS (Row #1) to be
Contracted Under RPS Long-term Contracts

3. State Mandated % of Retail Sales with RPS Long-term
Contracts Row 2* Row 1

4. SVCE: Current Compliance with Row #3: Existing RPS
Achieved with Long-term Contracts (per Table 2)*

5. SVCE: RPS Achieved with Ormat Geothermal Portfolio

6. SVCE: RPS Achieved with Ormat and OME
Open Position relative to State Mandate (Row #3) +Above/ (-) Short
CP#4 2021-2024
40%
65%
26%

37.6%

37.8%

37.9%
+11.9%
CP#S 2025-2027
50%
65%
33%

60.6%

63.9%

64.2%
+32.1%
CP#6 2028-2030
57%
65%
37%

57.7%

60.9%

61.3%
+24.03%
13 •
•
•
•
•
• Workforce: PLA, or comply with CA prevailing wage with audit if no PLA, and; encourage use of local labor (Nevada special conditions)
• Environmental: meet permitting requirement; state preference that projects avoid sensitive habitats • Environmental Justice: Attest to not using forced labor, identify benefits to local communities Item 4

PRESENTATION
Contracting structure is the same as used for Long Duration Storage with minimal changes Development and Performance Deposits
Buyer's Liability Pass Through Agreement (BLPTA) - guaranty performance by each Participating Member to CC Power & Ormat and OME
Provided in substantively final form
120 days from execution (May 31, 2022) for Participating CCAs to approve agreements
Meets CC Power Board specified labor environmental, and environmental justice preferences
14 Project Participation Share Agreement
•
•
•
•
•
•
•
•
•
•
Item 4

PRESENTATION
CC Power and Participating Members
Agreement to fund Project obligations - deposits & payments Sharing of Project revenue and benefits
Step-up provision - capped at 125% of Entitlement Share per Participating Member
Liability and insurance
Governance & Voting structure for operating PPSA:

Key requirements require CC Power board vote
Each Participating Member gets one vote
Non-participating members abstain
Other requirements require Project Operating Committee vote, or are delegated to GM 15 Project Benefits beyond MTR Compliance
•
•
•
•
•
•
•
Item 4

PRESENTATION
Geothermal resources provide a reliable source of clean energy Provides RPS PCC1
Reduced portfolio risk
Enhances grid reliability
Ancillary Services
Resource Adequacy
Reduces GHG emissions
Helps achieve 2045 Carbon Neutral and 24x7 goals
16 Approval Process
CC Power Approves
Projects
CC Power & OME/Ormat
Execute Agreements
Participating CCAs
Receive Approval of
Participation Agreements
Item 4

PRESENTATION
Step 1: CC Power Board waives 60-day notice and approves Agreements Step 2: CC Power General Manager and counterparties execute agreements - "effective date" Step 3: Participating Members seek respective Board Approvals of PPSA and BLPT A within 120 Days May 31, 2022 May 31, 2022 Jun-Sep 2022
17 Project Oversight Committee
Role of POC: solicit, evaluate, direct negotiations, and recommend projects.

CCA POC Member Other Staff
Central Coast Community Energy Dennis Dyc-O'Neal Jeremy Clark CleanPowerSF Michael Hyams Erin Mulberg
Peninsula Clean Energy Siobhan Doherty Chelsea Keys
Redwood Coast Energy Richard Engel Jocelyn Gwynn
San José Clean Energy Jeanne Solé Kelly Morris
Silicon Valley Clean Energy Monica Padilla Oren Weiner & Charles Grinstead
Sonoma Clean Power Deb Emerson Ryan Tracey
Valley Clean Energy Gordon Samuel
Item 4

PRESENTATION
CleanPowerSF (j) PENINSULA
= CLEAN ENERGY - i) Central Coast
Community REDWOOD COAST
Energy Authority Energy
PPA Negotiation & Analytics Team:

Deb Emerson, SCP
Ryan Tracey, SCP
Kevin Fox, Keyes & Fox
Budget, RFP Process and POC Coordination:

Jeanne Sole, SJCE
Kelly Morris, SJCE
PPSA & Other Legal Support:

BBSW - Tony Braun, Justin Wynne, Brittany lies,
Kris Kirkegaard

SANJOSE ,,
1 I_,... © SILICON VALLEY

CLEAN ENERGY CLEAN ENERGY
A Program of the City of San Jose
~ Sonoma VALLEY ~ Clean Power CLEAN ENERGY 18
•
•
•
•
•
•
Item 4

PRESENTATION
Delegate authority to CEO to execute necessary Project Participation Share Agreements (PPSA) and Buyer's Liability Pass Through Agreements (BLPT A) with California Community Power and Participating Memebers for two new Geothermal Projects:

PRESENTATION
,, .... ~ .
......
.
.
•
•
•
•
Item 4

PRESENTATION
60,000
50,000
- ~ - I I I I :
i.;___________ ------...-,-- - - I------------I - - - --- --- ---~- I : : : : I : I I I I :
1-------------: I I I I I I I I

11.5 GW
need
,----------.,.. ---------r -,- -~----- }
1 ____________ ,1 I I I I
'--~ - -----
~40,000
~
u
a z3o,ooo
0 V,
-
<C
U20,ooo
10,000
2022
Surplus
- Specified Imports
- Hybrids
- Biomass
- lin2 Managed Peak
2023
1:.:.:.: Shortfall
- Demand Response
- solar
- Geothermal
- - RA Requirement
·-- - - - - - - - - - - ., I_ - - - - - - - - - - - .,
2024 2025
,: : : : Generic for D.19-11-016
- Pumped Hydro Storage
- w ind
Nuclear
- 2026
Unspecified Imports
- Energy Storage
- Hydro
- Thermal
... Existing
resources
CPUC conducted
resource stack analysis
found N11.5GW of need
Due to nature of retiring
assets (DCPP), CPUC
required subset to be
met with firm clean
resources and 5-hr
batteries (4.5 GW)
D.21-06-035 adopted by
CPUC on June 24, 2021
to address mid-term
reliability needs
SVCE given load share
proportion: 237 MW 21
• Subtitle
New SV Clean Energy
PowerPoint Template
Item 5

PRESENTATION
May
Board starts CEO
evaluation
May-Aug
Strategic Plan Input
& Updates
September
Approve Budget,
Strategic Focus
Areas
Sep-Oct
CEO evaluation&
Priorities (Sep)
Present detailed
work plan and
measures (Oct)
Oct-May
Implementation
Strategic Plan & Budget Timeline
❑
❑
❑
❑
❑
❑
❑
❑
Item 5

PRESENTATION
April & May & Q3 - Staff input
v May 27 - Executive Committee (strategic plan)
June 8 - Board (strategic plan)
June 24 - Executive Committee (strategic plan & budget) August? - Finance Committee (budget)
August 10 - Board (budget)
September 7 - Strategic Focus Areas and Budget Approval October 12 - SVCE Work Plan presented to Board
2 Item 5

PRESENTATION
Mission
[Goru] [Goal] [Goal] [Goal] [Goal]
g [Goal] g ~ [Goal]
G;J [GoaiJ G;J ~ [Goal]
[Go~]
[Goal] Q [Goal] [Goal]
®®®®®®®®®®®®
®®®®®®®®®®®®
®®®®®®®®®®®®
®®®®®®®®®®®®
®®®®®®®®®®®®
Focus
Area
Focus
Area
Focus
Area
Focus
Area
Focus
Area
Item 5

PRESENTATION

STRATEGIC PLAN GOALS

1. Build and m ain tain a high- perform ing team

2. Maintain an enjoyable and rew ard ing w orkplace

3. Get g reat at prioritizing, and rebalancing to align work plan with higher level goals

4. Plan for resources to m eet SVCE's m ission while balancing m u ltiple stakeholder o b jectives

5. A cquire clean and reliab le electricity in a cost effective. equitable a nd sustainable m a nner

6. Manage- and optim ize pow er supply re:source-s to m eet affordabilit y, GHG reduc tion and reliability objectives

7. W o rk w ith t he commun it y to p la n a nd track achiev ing energy and transportatio n GHG red uctio ns o f 30% from the 2015 baseline by 20 21, 40% by 2025, and 50% by 20 30 8 . Coord ina te deve lo pment o f decarbon iza tion and resilience strategy. lead design of local polic y a nd program s. and su pport p rogra m deployme nt
9_ Use DA ISY to enable d ata-d riven d ec ision-m aking across the organizatio n

10. Em p o wer customers w ith the aw areness. knowledge and resources needed to m ake effec t ive clean energy cho ices

11. Engage a full r ange o f pub lic. p rivate. and no n -profit stakeho lder s to leverage o ur decarb onization effo rts

12. Enact com petit ive service offerings and program s that deliver m easurable environm ental an d economic benefits

13. Commit to m ain taining a strong finandal p o sitio n 14 . Avo id failures in m anage-m emt of market. credit. liq uid ity. operat ional and e-nte-rprise risks

15. A d vocate for p o licie-s that protect CCA cu sto m er investm ent s and fur ther s d ec.arbon ization, g rid reliability. affordability, and social i,quity with fedi,ral and stati, elec ted o ffic ials and regulators

16. Engage regulators. legislators. and local elected officials in representing SVCE priorities

17. Develo p and enhance in ternal processes related to Su pplier Diver sity. St affin g and Com pliance 18 . Encourage the deve lopm ent o f regulations t hat p roactive ly support the changing, evo lv ing energ y market a nd facilitate grid innovatio n

19. Drivi, SVCE's local policy objectives by leveraging key stakeho lders 20 _ Ensure SVCE's Information Techno log y infrastructure is secure. reliable. and d isaster resilient to provide 24/ 7/ 365 online access

21. Enable- data-d riven d ec ision-m aking across t he o rganizatio n: auto m at@. int@g rate-. and str@a mline:
b usin@ss processes to m inimize operatio nal risk an d m ove o rganization toward industry b est practices from it s star tup p hase
Each Goal
associated
with
Measures
B. POWER
SUPPLY
SVCE's Power Resource Team 1s responsible for planning, acquiring, and m anaging power suppty resources to meet the community's clean energy goals and state-mandated p ower and reliability requirements. This 1s done through a balanced approach which considers cost. nsk. long-term value. and best fit in meeting community goals. This requires sustainable planning, innovative thinking. prudent risk management and the constant search for the best solutions. Going forward. to be successful SVCE must adapt to new cl imate and social challenges: customer specific needs:
support region -wide decarbonization and electnf1cation goals: integrate d1stnbuted energy resources; collaborate and leverage opportunities for joint procurement: and become technology and data driven.

GOAL MEASURES
ptan for r•sources to
m••t SVCE's mission
whll• balancing
multiple stakeholder
obfectlVH

1. Integrated Resource
affordable, reliable. and
2030 and beyond (204
.. The successful planning and acquisition of clean and reliable energy serves as the foundation of SVCE's mission. Moving forward. we aspire to strengthen and diversify our portfolio with new cost-effective and Innovative resources such as long -duration storage ...

Acqulre dean and reliable electrklty
In a cost effutlve,
equltable and
sustainable manner

2. Develop a platform t
distributed energy reso
operations

3. Implement process a
and policy integration t
PohcyTeams

1. Achieve SVCE 100% C
RPS mandate of 65%; n
procurement mandates

2. Meet SVCE's standar
(I.e .. GreenPrime and G1
development of sustain
GreenPrime Direct and
custom product offerm

3. Pursue joint procure,
resource adequacy and
through CC Power and
power partners
Monica Padilla Director of Power Resources

GOAL MEASURES
M•nag• •nd optlmlH powu supply ,..,ourc:•s
to mNt •fford•bUity,
GHG t.ciuc:Uon •nd
r•llablllty objectives

1. Manage Power Supply Portfolio and Energy Risk

2. Implement and Operate Power Purchase Agreement s
to enhance value to SVCE

3. Ensure SVCE adopt s the appropriate tools, systems,
and resources to support portfolio optimization,
risk management, load forecasting, compliance, and
settlements
Item 5

PRESENTATION
Hakone Gardens, April 29th;
Virtual retreat all managers,
May 5th;
Further synthesis, all
Directors
Item 5

PRESENTATION
Board supports
keeping the
Mission and the
Overall Measure
the same?
MISSION:

Reduce dependence on fossil fuels by providing
carbon free, affordable, and reliable electricity and
innovative programs for the SVCE community
MEASURE:

SVCE, working with SVCE member agencies, aspires to achieve energy and transportation GHG reductions of 30% from the 2015 baseline by 2021, 40% by 2025, and 50% by 2030
6 Item 5

PRESENTATION
© Summary of Future 5 Year Goals
From Hakone retreat April 29th; refined May 5th staff meeting; additional meetings

9. Expand focus on C&I
decarb/industrial load

2. Supplier of Choice
(electrification, rates,
DA customers, 24x7
CFE ... )

6. Operationalize
resources and
portfolio/asset
management in the
wholesale market to
achieve objectives

10. Expand/scale digital
and in-person
electrification
awareness and
education

3. Leverage Balance
Sheet for Structured
Financing

7. Ensure state and
federal policy
landscape preserve
CCA autonomy+
program policies

11. Execute on planned
programs to
demonstrate impacts
and influence policy

4. Efficient and
Effective I nterna I
Operations

8. Work electrification
into SVCE's value
proposition to
customers

12. Operationalize
equity into programs
7 Item 5

PRESENTATION
All are
important
Shining a
spotlight on
incremental
areas
Workplan will
include the
details on how
we will address
these and
other
areas/goals
(internal
document)
I

1. Employer of Choice
I

5. 24x7 clean energy
delivery

9. Expand focus on C&I
decarb/industrial load

2. Supplier of Choice
(electrification, rates,
DA customers, 24x7
CFE ... )

6. Operationalize
resources and
portfolio/asset
management in the
wholesale market to
achieve objectives

10. Expand/scale digital
and in-person
electrification
awareness and
education

3. Leverage Balance
Sheet for Structured
Financing

7. Ensure state and
federal policy
landscape preserve
CCA autonomy +
program policies

11. Execute on planned
programs to
demonstrate impacts
and influence policy

4. Efficient and
Effective Internal
Operations

8. Work electrification
into SVCE's value
proposition to
customers

12. Operationalize
equity into programs
8 •
•
•
•
Item 5

PRESENTATION
Keep Mission and overall measure unchanged
24x7 Clean Energy Delivery: aspiration for the future, longer-term goal
Keep diversity/equity focus and continue incorporating in work; use examples as how it will be put into practice across supporting measures
Public Comment
Frame the strategic plan from the customer viewpoint and how customers benefit from the work that SVCE is undertaking 9 ❑
❑
❑
❑
❑
❑
❑
❑
May
Board starts CEO
evaluation
May-Aug
Strategic Plan
Input & Updates
September
Approve Budget,
Strategic Focus
Areas
Sep-Oct
CEO evaluation&
Priorities (Sep)
Present detailed
work plan and
measures (Oct)
Oct-May
Implementation
Item 5

PRESENTATION
April & May & Q3 - Staff input
v' May 27 - Executive Committee (strategic plan)
June 8 - Board (strategic plan)
June 24 - Executive Committee (strategic plan & budget) August? - Finance Committee (budget)
August 10 - Board (budget)
September 7 - Strat Focus Areas and Budget Approval
October 12 - SVCE Work Plan presented to Board
• •
•• •
•
SVCE Strategic Focus Arease
&
• SVCE Work Plan
••
Staff Input & Discussion
Board Input and Discussion
10 •
•
Item 5

PRESENTATION
Questions
Comments
11 Item 5

PRESENTATION

APPENDIX
Item 5

PRESENTATION
© Summary of Future 5 Year Goals
From Hakone retreat April 29th; refined May 5th staff meeting; additional meetings

9. Expand focus on C&I
decarb/industrial load

6. Operationalize
resources and
portfolio/asset
management in the
wholesale market to
achieve objectives

10. Expand/scale digital
and in-person
electrification
awareness and
education

3. Leverage Balance
Sheet for Structured
Financing

7. Ensure state and
federal policy
landscape preserve
CCA autonomy+
program policies

11. Execute on planned
programs to
demonstrate impacts
and influence policy

4. Efficient and
Effective I nterna I
Operations

8. Work electrification
into SVCE's value
proposition to
customers

12. Operationalize
equity into programs
13 Item 5

PRESENTATION
- All are equally important
- Shining a spotlight on
incremental areas
- Workplan will include the
details on how we will
address these and other
areas/goals (internal
document)

1. Employer of Choice

2. Supplier of Choice

3. Leverage Balance Sheet for Structured Financing

4. 24x7 clean energy delivery

5. Work electrification into SVCE's value proposition to customers
14 Item 5

PRESENTATION
© More Context on the 5 Strategic Focus Areas
, ___________________________ _
FY23
Strategic
Focus
Areas with
more detail
Staff Recruitment,
Retention, Development
and Succession Planning ~ /
/
, '
~
/
'
Clean Power Supply &
Decarbonization
Programs
Legislative and
Regulatory Advocacy &
Policies
Internal Operations &
Business Process
Optimization
Rates & Financial Reserve
Management
'
/
'
'
/
• Assess staffing needs and skill gaps
• Recruit qualified and strong candidates
• Develop and implement staff development plans
• Develop succession and cross training plans
• Maintain & implement clean power resources
• Explore pathways to measure and achieve carbon free 24x7 • Implement customer offerings and demand side programs (VPP) • Pursue local building and transportation electrification policies •Ensure state and federal policy landscape preserve LLA autonomy, ' including rate setting/ financial planning, and clean energy procurement •Advocate for policies that advance SVCE's mission
•Advocate for operational rules and regulations that preserve the value of SVCE's oortfolio of assets ~
"
• Deploy trade capture and settlement systems
• Implement hybrid technology and workspace
• Develop business process mapping & documentation ~
' • Complete stress test analysis and recommend reserve targets • Assess impacts of hedging on net revenue projections
• Evaluate rate offerings, discount, clean offerings and trade-offs ~ 15 •
•
•
Employer of Choice –
maintain a culture of
innovation and growth
•
•
•
•
•
• retain DA customers
Supplier / Electric Provider
of Choice
•
•Strategically use / lean into our strong balance sheet to advance our mission •Develop partnerships with local member agencies, companies, and customers Structured Financing -
Provide innovative
financing solutions to
customers
Efficient and Effective
Internal Operations
•
•
•
•
•
•
•
Item 5

PRESENTATION
© More Context on the 5 Strategic Focus Areas
FY23
Strategic
Focus
Areas with
more detail
Shape External
Environment to Advance
SVCE Priorities
Differentiate ourselves as the "innovative" CCA
Attract the right "type" of employee - mission-driven and entrepreneurial Develop and retain employees - provide growth and learning opportunities
Re-launch (Define and communicate) our value proposition to our customers
Maintain Competitive Rates
Offer all-electric rates to advance beneficial electrification Carbon-free or RPS? Which path to 24/7?
Customer-Centric Technology- positive impact, negative, both? Attract and
Continue building Strong Financial Reserves
•Operationalize equity into programs (could expand to social justice, org-wide) •Business Process Optimization
°Cybersecurity / Business Continuity
•Process Improvements/ Productivity Tools
•Internal Controls/ Governance
•Effective Risk Management -- Re-visit Hedging Strategy/ Stress Testing nsure state an e era po icy an scape to preserve autonomy Monitor Municipalization efforts by others
PCIA Reform (going negative); NBCs
Leveraging available public funding
Diablo Extension (opportunities/ threats)
What if PG&E broken up/ no longer POLR / add'I bankruptcy New technoloqy disruptions - Supply-side
Item 5

PRESENTATION
© More Context on the 5 Strategic Focus Areas
FY23
Strategic
Focus
Areas with
more detail
r
\..
r
\..
r
\..
r
\..

SF1: Clearly integrate
electrification into SVCE's value
proposition to customers
SF2: Deliver new 24/7 clean
energy service, and evaluate
related growth opportunities with
strategic customers
SF3: Expand online decarb
resources and assess pilot
opportunities in the C&I sector
SF4: Continue to expand digital
& in-person electrification
awareness, education and
'
./
'
'
resources in the residential sector
'
SFS: Explore strategic decarb
product and service development
relationships with top tech
customers
• Move beyond cleaner electricity at competitive rates
• Explore concepts such as a discounted 'all electric' rate, and/or structured financing for decarb retrofits
• Successfully launch innovative 24/7 service with Cust Y • Explore related longer-term growth opportunities with top commercial customers in the area
• C&I represents N40% of SVCE gas use
• Complex, and highly concentrated with large customers • Add online resources, assess/launch targeted pilot(s) • 'Digital pivot' has shown strong results, big potential • Expand promotions, contractor & buying resources
• Couple with physical demonstration projects
• Decarb emerging as a strategic priority for top tech co's, integrating decarb into global product/platform dev
• Explore unique SVCE value-adds as innovation partner
"I
~
"I
~
"I
~
....
~
17 Item 5

PRESENTATION
© More Context on the 5 Strategic Focus Areas
FY23
Strategic
Focus
Areas with
more detail
r
'-
r
'-
,r
'-
,r
'-
,r
'-
Employer
Energy
Programs
Awareness
Affordability
'
'
./
'
J
'
'
• Attract, develop and retain talented workforce
• Grow teams and structure to meet needs
• Operationalize PPAs
• Explore 24x7, resource options and projected
procurement needs
• Meet obliqations and influence state policy
• Prioritize efforts; focus on big impacts, be bold and take smart risks (emphasize Double Down initiatives)
• Explore financing options, how to leverage SVCE balance sheet • Work with jurisdictions on local policies for existing buildings • Promote customer and contractor education
• Expand customer-facing tools and resources
• Develop decarbonization narrative
• Consider all-electric and other rates
• Include in SVCE's value proposition
• Ensure transition supports all customers
...,
...,
./
"'
./
"'
~
"'
./
18 Item 5

PRESENTATION
© Current (FY 21-22) Strategic Focus Areas
FY22
Strategic
Focus
Areas
r
'-.
r
'-.
/
' r
'-.
r
'-.
/
'
Additional Staffing to Maintain Capacity & Organization Succession Planning
Operations Mode with PPA's coming online
Procurement, Clean Energy Mix & Integration
Financial Stability & Trade-Offs
Internal Operations & Cyber Risk Management
Grow the organization to expand our strategic efforts on climate change and decarbonization
""
'
~
"'I
~
""
'
~
"'I
~
1::1
Item 5

PRESENTATION
FY 21-22
6 Focus Areas with a little more context
Additional Staffing to Maintain Capacity
• New positions to manage operational risk and support maturation • Organization succession planning
Operations Mode with PPA's coming online
• $1.6 billion in 13 PPA investments over last 3 years
• First PPA online December 2021
• Operations, optimization, settlement
Procurement, Clean Energy Mix & Integration
• Long-term RPS% Policy & Procurement
• Mandated procurement, emerging technologies, demand flexibility • CAISO involvement, Grid Integration
Financial Stability & Trade-Offs
• FY21 - SVCE in the red
• Power Prepay
• Energy Risk Management
• Trade-off's (RPS% policy, Clean Energy, Discount, etc.) Internal Operations
• Business Process Optimization
• Cyber & Physical Risk
• Post-COVID hybrid work for staff and Board
Grow the organization to expand our strategic efforts on climate change and decarbonization • Double-down decarbonization strategy
• Consider increasing resource allocation substantially • Focus on areas where SVCE can make incremental impact Additional Resources & Efficiencies
Enterprise-wide systems, metrics
& tools
Focus on Equity
Digital Pivot - Customer &
Community engagement
Community outreach and leverage
FY 20-21
Strategic
Focus Areas
Item 5

PRESENTATION
21 Item 5

PRESENTATION
·-
u,
u,
E
w
C)
:c
C)
,a
j
C
C
<(
500
400
300
200
100
Statewide GHG Emissions
(including electricity, natural gas, transportation, agriculture and industrial sectors) '-...__ ,-,,
...,_; --•• ••• 2020 T t arge ·--------------------------------------------· 2020: Back to 1990 levels ~ ,,..., -
-------- ~~ --------- ACHIEVED
-------------------' •••••♦ ~-
~
~. 2030 Target ·--------------------------· 2030: 40% below 1990 levels ~~~~-----------
♦♦♦♦♦♦♦♦ ~~------
~ 2045 Target ·--· 2045: Carbon Neutrality
2000 2010 2020 2030 2040 2050
Electricity makes up only 18% of allowable statewide emissions in 2030.

Graph based on data from the California
Climate Change Scoping Plan:
https://ww3.arb.ca.gov/ cc/ scop,ngplan/
scoping plan 2017.pdf ..
22 Item 5

PRESENTATION
{!) SVCE has set aggressive carbon reduction goals
-(1)
N
0 u
t-
~
~
-Cl)
C
0 Cl)
Cl)
E
w
C)
:I:

C)
ttJ
:::,
C
C
<(
SVCE Emissions Reduction Goals
45 40
35 30
25 20
15 10
5 0
2000

HISTORICAL FORECAST
SVCE launched
service in 2017;
baseline data
starts in 2015
2010
---------------------------- --------------------------- 2021 GOAL: 30% BELOW 2015 LEVELS CALIFORNIA 2030 TARGET
•
2020 2030

CALIFORNIA
2045 TARGET
2040 2050
2025 GOAL: 40% BELOW 2015 LEVELS
2030 GOAL: 50% BELOW 2015 LEVELS
- ELECTRICITY (SVCE, PG&E, DIRECT ACCESS)

TRANSPORTATION
- NATURAL GAS
◊ SVCE GHG GOAL 23
Item 5

PRESENTATION
2020 emissions were 35% below 2015 due to COVID, exceeding 2021 target of 30% 4,500,000
4,000,000
3,500,000
w 3,000,000 N
0 u
1- 2,500,000 ::E
VI
§ 2,000,000 VI
VI
E
w 1,500,000
1,000,000
500,000
0 2015
Energy & Transportation Emissions by Subsector
2017
} 14%below
2015
2018
21% below
2015
2019
24% below
2015
2020 emissions: 2.6 million MT C02e
2020
35% below
2015
Off-Road
■ Non-Commercial On Road
■ Commercial On-Road
■ Non-Res. Natural Gas
■ Res. Natural Gas
~ Non-Res. Electricity DA
■ Non-Res. Electricity
■ Res. Electricity
SVCE GHG Reduction Targets
2021: 30% below 2015
2025: 40% below 2015
2030: 50% below 2015
24 1
• Subtitle
New SV Clean Energy
PowerPoint Template
Stress Test Analyses
Amrit Singh
Board of Directors Meeting
June 8, 2022
Item 6

PRESENTATION
2 Presentation
Highlights
• Construction of Stress Test
Cases
• Expectation vs Results • Risk Mitigations and Next
Steps
Purpose
Present findings of the
stress test analyses
Item 6

PRESENTATION
3 Stress Scenarios for CY 2023 to CY2027 (five-year horizon):

1. Significant drop in energy prices including REC
• Higher PCIA and lower PG&E Gen Rate

2. Insufficient financial liquidity
• Price collapse triggers credit downgrade
• Collateral calls from counterparties and CAISO
• Increase in POLR (Provider of Last Resort) funding (called FSR – Financial Security Requirement)

3. PPAs default, renegotiate for higher prices, and/or delay start • RPS non-compliance penalty
• Replacement at higher prices

4. Load loss due to direct access and distributed load

5. Threat to Public Services or Facilities
Stress Test Scenarios
Extreme but plausible scenarios that can deplete reserves and make SVCE uncompetitive. • Ensure adequacy of
reserves and
organizational resiliency
• Guide development of
strategic plan
• Shape FY 22-23 budget
and reserve targets
• Price uncertainty Drives
the first 4 scenarios
Item 6

PRESENTATION
4 Expectation versus Analyses Results
Revenue sensitivity to market prices via PCIA and PG&E Gen rate impacts dwarf other stress factors.

Stress Case Expectation Results from Analyses

1. Prices Collapse Significant reduction in revenues and large draw of reserves
Same as expected

2. Price Collapse leads to
insufficient liquidity
Large draw of reserves Price collapse does not trigger any significant liquidity needs. New POLR requirements require $35 million in
liquidity.

3. PPAs default/delay/renegotiate
for higher prices
Price increases result in higher
replacement cost and higher
compliance penalties
Price increases lead to substantial increases in
revenues which far exceed expected increase in
procurement costs.

4. Load Loss Price Collapse leads to stranded
assets
Load loss helps the bleeding from negative margins
caused by significant reduction in revenues. Results are better than stress case 1.

Assumes current rate setting methodology continues.

Item 6

PRESENTATION
5 Past, Current, and Stress Case Modeled Commodity Prices • Forward prices are at all time
high.
• Extreme case of runup in
prices
• Most of the increase occurred
in the last 12 months.
• Can’t predict future but price
trends could reverse, and
prices could drop equally or
more.
• Prices were trading at the
modeled stress test levels as
recently as 12 months ago.

Past Future
$/Mwhr
Item 6

PRESENTATION
6 Base Case versus Stress Scenario Two
Base Case
• High forward prices result in low PCIA and high PG&E
Gen rates resulting in healthy SVCE Margins
• If current forward prices are realized and other model assumptions prevail:
• Significant growth in reserves from forecast 2022 level of $227 to $322 at the end of 2023
• Continued strong growth in margins over the next 5 years • Caveats:
• PCIA and PG&E Gen Rate portfolio assumptions based on public data as best modeled by NewGen Consultants
• PG&E’s portfolio management strategy and portfolio contents may change from those modeled
• CPUC may moderate rate impacts
• Uncertainty increases further out in time
• Focus on delta of base case to stress test results
Stress Case
• Scenario Two is the most consequential
scenario
• Scenario two combines the impact of
price collapse ($178 million) with
additional requirement for POLR FSR
($35 million)
• If the modeled scenario were to occur,
reserves would be drawn down by $213
million by the end of 2024.
• Days Cash on Hand (DCOH) Projection:
2024: 137
2025: 92
2026: 43
2027: (5)
Item 6

PRESENTATION
7 Risk Mitigations
Best mitigation is to hold sufficient financial reserves.

Use results of these analyses to propose reserve target for next fiscal year’s budget • Example:
• Build reserves such that if scenario 2 were to occur, reserves do not fall below the minimum reserve threshold of holding 120 DCOH over the next 2 years and 60 days DCOH over years 3 to 5. • Level selected determines funds for additional customer discounts and decarbonization programs Other Risk Mitigation:
• Revisit current energy hedging strategy
• Allow for loss in revenues from price collapse to be mitigated by reduction in power supply costs • Challenges:
• Determining level of hedging given uncertainty in modeling PCIA and PG&E Generation Rates • Increased volatility in Power Supply Costs and Budget Item 6

PRESENTATION
8 Next Steps
June 24, 2022 August 2022
Staff presents FY 2022 - 2023 budget framework to
the Executive Committee; uses stress test analyses
to recommend holding higher reserve levels.

Staff presents preliminary
budget proposal to the Finance
and Administration Committee.

August 10, 2022 September 7, 2022
Board reviews and provides staff
feedback on the proposed budget.

Board approves FY 2022 – 2023 budget.

Item 6

PRESENTATION
9 Appendix
Item 6

PRESENTATION
10 Summary of Base Case Results
High forward prices result in low PCIA and high PG&E Gen Rates resulting in healthy SVCE Margins.

Current Reserve Targets:
• Minimum: 120 days
• Goal: 230 days
• Maximum: 320 days
$ millions
2023 2024 2025 2026 2027
Revenues $ 398 $ 410 $ 391 $ 374 $ 375
Power Supply Cost $ 271 $ 281 $ 279 $ 272 $ 272
Operating Margin $ 127 $ 129 $ 112 $ 102 $ 102
Other Costs $ 32 $ 32 $ 33 $ 33 $ 34
Net Contribution to Reserves $ 95 $ 97 $ 79 $ 69 $ 69
Projected Reserve Balance $ 322 $ 418 $ 497 $ 566 $ 635 Days Cash on Hand 388 487 582 677 758
Uncertain
Highly
Uncertain
Item 6

PRESENTATION
11 Summary of Stress Test Results
Stress Case 1 - Significant Drop in Energy Prices
2023 2024 2025 2026 2027
Revenues $ 398 $ 112 $ 240 $ 236 $ 236
Power Supply Cost $ 271 $ 257 $ 246 $ 240 $ 239
Operating Margin $ 127 $ (145) $ (5) $ (5) $ (3)
Other Costs $ 32 $ 33 $ 33 $ 34 $ 34
Net Contribution to Reserves $ 95 $ (178) $ (38) $ (38) $ (36) Projected Reserve Balance $ 322 $ 144 $ 106 $ 67 $ 31
Days Cash on Hand 388 181 138 90 41
Stress Case 2 - Insufficient Liquidty
2023 2024 2025 2026 2027
Revenues $ 398 $ 112 $ 240 $ 236 $ 236
Power Supply Cost $ 271 $ 257 $ 246 $ 240 $ 239
Operating Margin $ 127 $ (145) $ (5) $ (5) $ (3)
Other Costs $ 32 $ 33 $ 33 $ 34 $ 34
Net Contribution to Reserves $ 95 $ (178) $ (38) $ (38) $ (36) Projected Reserve Balance $ 322 $ 144 $ 106 $ 67 $ 31
After FSR Requirement $ 287 $ 109 $ 71 $ 32 $ (4)
Days Cash on Hand 346 137 92 43 (5)
Stress Case 3 - PPAs Default
2023 2024 2025 2026 2027
Revenues $ 398 $ 112 $ 240 $ 236 $ 236
Power Supply Cost $ 258 $ 239 $ 229 $ 227 $ 226
Operating Margin $ 139 $ (127) $ 11 $ 9 $ 11
Other Costs $ 32 $ 33 $ 33 $ 34 $ 34
Net Contribution to Reserves $ 107 $ (159) $ (22) $ (25) $ (23) Projected Reserve Balance $ 334 $ 175 $ 153 $ 128 $ 105 Days Cash on Hand 420 235 212 179 148
Stress Case 4 - Load Loss
2023 2024 2025 2026 2027
Revenues $ 398 $ 112 $ 216 $ 212 $ 189
Power Supply Cost $ 271 $ 257 $ 210 $ 204 $ 168
Operating Margin $ 127 $ (145) $ 7 $ 8 $ 21
Other Costs $ 32 $ 33 $ 33 $ 34 $ 34
Net Contribution to Reserves $ 95 $ (178) $ (26) $ (26) $ (13) Projected Reserve Balance $ 322 $ 144 $ 118 $ 92 $ 79
Days Cash on Hand 388 181 177 141 143
Item 6

PRESENTATION
12 Reserve Balances Under Each Scenario
Scenario Two is the most consequential scenario. If the modeled scenario were to occur, reserves would drawn down by about $213 million by end of 2024.

Projected Reserve Balance ($ millions) 2023 2024 2025 2026 2027

1. Prices Collapse $ 322 $ 144 $ 106 $ 67 $ 31

2. Price Collapse leads to insufficient liquidity $ 287 $ 109 $ 71 $ 32 $ (4)

3. PPAs default/delay/renegotiate for higher prices $ 334 $ 175 $ 153 $ 128 $ 105

4. Load loss $ 322 $ 144 $ 118 $ 92 $ 79
Corresponding Days Cash on Hand (DCOH) 2023 2024 2025 2026 2027

1. Prices Collapse 388 181 138 90 41

2. Price Collapse leads to insufficient liquidity 346 137 92 43 (5)

3. PPAs default/delay/renegotiate for higher prices 420 235 212 179 148

4. Load loss 388 181 177 141 143
Draw on Reserves
of $178 million.

Below minimum
target of 120 DCOH.

Add'l $35 million
for POLRFSR.

Item 6

PRESENTATION
13 PCIA and PG&E Gen Rate determine SVCE Rates and
therefore Revenues
Key Takeaways – Price Uncertainty Stress Scenarios (1-4) SVCE Gen Rate SVCE
discount
PG&E Gen Rate: PCIA
Biggest contributor to risk: PCIA and PG&E Generation Rate Uncertainty.

Revenues
PCIA
PCIA
Revenues
PG&E Rate
PG&E Rate
Revenues decline when prices decline
Item 6

PRESENTATION
14 • PCIA2023 = PCIA Balancing Account2022 + Forecast Balance • Balancing Account = (Prior Year’s Forecast Prices2022 - Actual Prices2022)* PCIA Portfolio • Forecast Balance = (Legacy Contract Costs – Forecast Prices2023)* PCIA Portfolio • PG&E Gen Rate Set Similarly
• PG&E Gen Rate = ERRA Balancing Account + Forecast Costs * Simplified representation of concepts
Key Takeaways – Price Uncertainty Stress Scenarios –
Cont’d
Big contributor to PCIA and PG&E Generation Rate Uncertainty is Market Prices.

Can’t fully bank current year’s margin
• Deviations between actual and forecast costs are tracked in balancing accounts and trued up next year • If prices drop, then there can be substantial draw from reserves Next Year’s PCIA
&
PG&E Gen Rate
Current Year’s actual
realized Prices
Forecast of Next
Year’s Market Prices
Item 6

PRESENTATION
15 Key Takeaways – Price Uncertainty Stress Scenarios – Cont’d
Price collapse poses biggest financial risk.
• Revenues drop significantly
• Loss of revenues far exceed
savings from lower power
procurement costs
• Power procurement savings
dampened by existing hedges
Item 6

PRESENTATION
16 Illustrative Methodology for Setting Target Reserves 2023 Required
Reserve Level
2023 Required
DCOH
Available for Add'l
Expenditure*
Next 5 years Reserves Remain Above 120 DCOH $380 million 460 $0 Next 4 years Reserves Remain Above 120 DCOH $345 million 415 $0 Next 3 years Reserves Remain Above 120 DCOH $310 million 370 12 Next 2 years Reserves Remain Above 120 DCOH $275 million 329 $47 * Based on current base case modeling.

Illustrative Methodology: Target reserves such that if scenario 2 were to occur, reserves do not fall below the minimum reserve threshold of holding 120 days of cash (DCOH) on hand over the next 2 years.

Base Case Reserve Projection: $322 million
Less Reserve Target: $275 million
Available for Add'l Expenditure: $47 million
Item 6

PRESENTATION
17 1. Significant Drop in Prices
Stress Scenario Construction*
• Energy: Statistical 1% low case prices
• RECs : 50% of current equilibrium curve
• RA : 50% of current RA cost
• Term : CY2023 to CY2027
• PCIA and PG&E gen-rate forecasts: NewGen
Model
• Price drops at once for all forward months and
stays at that level
• Hedges executed per ERM thresholds (hedge
to max targets)
• Current:
• Reserves to withstand the shocks
• Additional
• Additional reserves if needed
• Consider revising hedging strategy to
account for PCIA / gen-rate variability to
energy prices in the hedge plan
Mitigation Strategies
*Most stressful year modeled for term
Item 6

PRESENTATION

SILICON VALLEY

CLEAN ENERGY
18 2. Insufficient Financial Liquidity
Stress Scenario Construction
• Persistent price raise followed by a steep/quick price collapse
• e.g., 2006 to 2008 price raise followed by the credit crisis scenario happens in year 4.
• Take nat. gas forwards from 2006 to 2008 and replicate the % changes to current energy price levels.
• All new hedges to the generic counterparty - avg.
unsecured credit given to us.
• Ratable execution based on ERM thresholds
• Increase POLR funding/ FSR impact – is additional cash impact – ~$ 35M - depending on methodology adopted
• Current:
• Lockbox
• Reserves
• Additional
• Exploring more counterparties in lockbox
• Reframing of credit policy
• Additional reserves if needed
SVCE Mitigation Strategies
Item 6

PRESENTATION

SILICON VALLEY

CLEAN ENERGY
19 3. PPAs default and delay start
Stress Scenario Construction
• Some assets default and rest of them not online
yet will be delayed by ~6 months
• Valuation will include
• MTM of the defaulted assets and delays
(replacement at higher costs)
• SB350 penalties
• MTR penalties
• Current:
• Diversify technology
• Diversify counterparty
• Contractual language for delay damages
and default provisions
• Reserves to withstand the shocks
• Adding 10- year existing asset PPA to
exceed CP4 limits.
• Additional
• Additional reserves if needed
SVCE Mitigation Strategies
Item 6

PRESENTATION

SILICON VALLEY

CLEAN ENERGY
20 4. Load Loss Due to Direct Access and Distributed Load Stress Scenario Construction
• Load Loss of 10% in Year 3 and another 10% in
Year 5
• DER – replicate the IEPR scenarios delta from
baseline to high DER scenario
• Prices in years 3-5 collapse to one percentile
(load loss creates stranded asset risk)
• Current:
• Custom Pricing to lock Customers to 10
years
• DER - NEM reform
• Additional:
• Seek non-bypassable charges (NBC) from
CPUC. PG&E has it, we don't.
• Additional reserves if needed
SVCE Mitigation Strategies
Item 6

PRESENTATION

SILICON VALLEY

CLEAN ENERGY
21 • Operational Risks
• Modeling Errors
• Process Failures
• Governance and Risk Control Weaknesses
• Additional Risks from Regulatory and Legislative Actions • Additional Areas of Risks that can affect SVCE’s Services and Facilities
Other Potential Stress Test Scenarios
These could be considered in future analyses.

Item 6

PRESENTATION

SILICON VALLEY

CLEAN ENERGY
Digital Engagement &
Customer Awareness
Update & Takeaways
Don Bray, Director of Energy Services & Community Relations Pamela Leonard, Communications Manager
Item 7

PRESENTATION
'
4 ^
3*3
JTL
2 Purpose
Provide an update and key takeaways on digital engagement and customer awareness in relation to SVCE and electrification initiatives • Key digital engagement goals and metrics
• Website engagement
• Email outreach
• Online promotions
• Key takeaway and results of recent customer engagement survey Item 7

PRESENTATION
3 Background – The Digital Pivot
SVCE highlighted a ‘digital pivot’ - a shift to increase customer digital engagement, as a FY '20 - '21 Strategic Focus Area • Electronic communications are scalable, high-reach and low cost
• Digital Engagement Tools & Updates Implemented
o eHub – Online content, resources & services
o Granicus GovDelivery – Email marketing service
o Website redesign and content update
Homepage before redesign
Item 7

PRESENTATION
0 How it Works

SOURCE DELIVERY CUSTOMER
V V V

SVCE PG&E YOU
delivering energy,
reputinglines
servingcustomer!
benefiting from
cleaner energy,
localcontrol
building energy
SVCP works in parlrwrship with PRW Wo buy r.iwin olor.lricily dirocl ImmIbe Jtmrcn-lliti kind of market yiuw.li uml cuinpeliliun that results in i -iure lenewable
ewer energy generation rates PGiEdel sets tieelectricity 'aver existing power main the lines and provide si ling and custoner service as they always itremPGSC withSVCCs lower goncratior charges replacing
lines, continues to maint
have Your BiIcontinues
those from PGSfc
Click IwrnIDundent, ' your rtmngy Wl
4 Background – Goals of eHub
Educate
• Bring electrification
to customer’s minds
• Emails
• Advertising
• Messaging
• Website content
• Sweepstakes
• Promotions
Inspiration
&
Awareness
Provide knowledge to
customers of
electrification
benefits
• Online resources
• Website content &
digital collateral
• Emails
• Promotions
• Sweepstakes
Assist customers to take
action
• Rebates
• Purchasing portals
• Concierge services
• Connecting customers to
SVCE programs and
outside resources
• Have the information to
start the buy > install >
operate process
Action
Supporting customer’s electrification journeys
Strategic Goal 11:

Empower customers
with the awareness,
knowledge and
resources needed to
make effective clean
energy choices
Item 7

PRESENTATION
5 Education
through
Digital
Engagement
Item 7

PRESENTATION
Website Engagement Grows After Digital Pivot
Increased number of users to the SVCE website by 280% with the digital pivot • Website user comparison before and after ‘digital pivot’ o Before: 65,732 users - September 1, 2018 - April 30, 2020 o After: 249,852 users - September 1, 2020 - April 30, 2022 • Tactics used to increase engagement include
o Email marketing with online promotions and sweepstakes o Digital, in-language and out-of-home advertising
o Member community cross-marketing
o Social media
• Conducted user testing to continue to further improve and optimize the website for customer use and education
Digital display ad examples
Item 7

PRESENTATION
0 m
EVs - like your current car.

Minus the gas station.

And the oil changes.

And the repair bills.

Cleaner. Quicker.

And more reliable.

SIUCON VALLEY VI/CLEAN ENERGY
i
When you can boil water
in less then five minutes,
you’ll thank us.

Learn about
induction »
/
'

A'NSILICON VALLEY VI/CLEAN ENERGY
7 Customers are engaging with eHub resources and servicesFY 21 -22 Goal: Reach 200,000 unique users with eHub resources Surpassed FY 20
-21 goal of
reaching 20,000 unique users by reaching over 74,000 unique users to eHub resources Item 7

PRESENTATION
Cumulative Unique Users
NJ CAI
o o o
o o o
o o o
o o o
o o o o
v9
H 'b
O
QJ
O
c
C7
c
3 C v
O
c
t/>
CD 61
(A
>
t/>
3 cP
O
CD v9
b' 01
c
£ 3
O
V
3 v
>
w
c.C
4 /
*
y
8 Customers are spending time learning with the
eHub resources
The high average time on page shows how customers are engaging with the content and materials on the website
eHub Resource Unique Visits Average Time on Page
SVCE eHub Webpages 26,951 2 min 39 seconds
EV Assistant 17,633 2 min 15 seconds
Solar+Battery Assistant 9,425 1 min 34 seconds
Appliances Assistant 89,370 1 min 41 seconds
*54 seconds is the average time on page for all industries and between 2-3 mins is considered good. (Contentsquare’s 2021 Digital Experience Benchmark report)
Item 7

PRESENTATION
Inspiration &
Education
through Email
Campaigns
Item 7

PRESENTATION
•
*UJJM
10 Direct email campaigns produce a significant increase in electrification education and online engagement
FY 21-22 Goal: Deliver 2 million emails to customers with a 30% open rate Exceeded FY 20-
21 Goal of
sending 1 million
outbound emails
by delivering
over 2.1 million
emails
*SVCE's average open rate to date is 35%.

Industry-standard is about 22% (Enervee
Performance Benchmarks)
Item 7

PRESENTATION
5,000,000
\
4,148,055
4,000,000
3,000,000
2,000,000
1,449,314
1,000,000
0 ^ ^
&
^
VN ^
•$> &&&
B Cumulative emails delivered
B Cumulative emails opened*
11 Implementing learned best practices for email
content and design
• Crafting emails to provide education
on electrification with fun, easy to
digest language and calls-to-action
• Video content is an effective
educational tool within emails that
receive high engagement
• Creating an understanding of what
earns customers' attention through
A/B testing
• In-language email content increases
in-language website engagement
Item 7

PRESENTATION
0 SILICON VALLEY

CLEAN ENERGY
View this email in Espanol | rfrjt | Tieno Viet

SILICON VALLEY

CLEAN ENERGY
Learn about the benefits of driving
electric & shop the latest EVs
Last summer's weather brought extreme temperatures,power shutoffs and poor air quality from wildfires.

As a Silicon Valley Clean Energy customer, you can get $50 off electric products at the Appliances Assistant that help provide aid and increase resiliency during these conditions.

Happy Drive Electric Week! Whether you are In the market for a new car or curious to learn more about electric vehicles (EVs), Silicon Valley Clean Energy has resources to help you discover the benefits of driving electric.

EV Assistant - Explore cars, savings & incentives
Why should Iconsider an EV?
EVs are clean, increasingly affordable and provide great performance.

Gas vehicles are the largest source of harmful emissions in Silicon Valley. And, by switching to an electric vehicle, you can take significant action to help combat climate change and improve local air quality.

Evaporative coolers
are an efficient way to
Portable batteries
power and charge
Air purifiers can help
keep indoor air safe
norpccarv rtpvirPQ and rnnJarnnmanHran ivhpn t~hp m a i r 12 Inspiration &
Action with
eHub
Promotions
Item 7

PRESENTATION
13 Ran promotions to inspire action and build
electrification education and awareness
Expanding and evaluating promotions to implement lessons learned for future offers
• Through promotions,
customers received
money off a purchase of
eligible electric items up
to $50.
• 1,097 total rebates
claimed through the
Appliances Assistant
with SVCE promotions.

Item 7

PRESENTATION
0 I : light bu bs Smart light bulbs
Smart plugs
June 2021 - Aug. 2021
Air purifiers
Portable batteries
Evaporative coolers
July 2071 Oct. 2021
Portable induction cooktops Portable induction cooktops Nov.2071 March 7022 Smart power strips Nov 2021 Jure 2021 Nov.7070 Jan.7071
14 ‘Go Electric’ Earth Day Sweepstakes
Engaged customers through two online sweepstakes to share electrification resources and education on the benefits of all-electric homes Users
Actions
6,549
39,495
Sweepstakes Engagement • Sweepstakes incentivized learning about the benefits of induction cooking and an all-electric
home, and features eHub resources.
• Prizes included the choice of an e-bike, induction
hob and Le Creuset cookware set, all-electric yard
care equipment, bill credits or e-gift cards.
• Hosted sweepstakes in June 2021 and April 2022
Item 7

PRESENTATION
0 0 98390 Ended
Your Entries Total Entries
15 Providing 'concierge service' for customers
interested in home solar+battery storage
With the Solar+Battery Assistant, customers can identify their needs, have a system designed, and receive quotes from multiple local contractors Leads
Proposals
Sales
Sales that include a battery
387
189
36 20
Glossary:

Leads - customers who have created an account through the solar portal Proposals - leads that have completed a consultation call, provides necessary information, and received offers
Sales - leads that have selected an offer and signed a contract • Customers can get $1,000 off the
installation price of a main service panel
upgrade for a battery or solar+battery
installation.

Item 7

PRESENTATION
0 I can’
t remember the last
time I experienced such
good customer service.

Our solar system is up
and running and we
couldn’t be happier with
our decision."
- Michele B.
f
.
' , T
y \
y
. .

Explore the
Solar+Battery Assistant
16 Customer Awareness
Survey
Key Findings & Takeaways
Item 7

PRESENTATION
17 Background
SVCE has deployed two customer awareness surveys through third-party ADM Goal: Measure SVCE customer awareness and engagement
• First survey conducted September - October 2020
o Presented findings to the Board of Directors at Jan. 2021 meeting • Recent survey conducted March – April 2022
Item 7

PRESENTATION
18 Methodology – 2022 Survey
• Administered via phone and email
o Provided in English, Traditional Chinese, Spanish and Vietnamese • 481 survey respondents
• Survey responses received in equal numbers from customers in four census tract groupings - ‘SEVI Quartiles’
Item 7

PRESENTATION
Majority of customers stated that they heard of SVCE
• Unaided recall of SVCE was 10% of respondents
• Once prompted with the name SVCE 73% of respondents heard of SVCE o No statistically significant increase from 2020 survey • 38% of respondents were aware of programs offered by SVCE Key takeaway: Most customers think of PG&E first
as their power provider; SVCE awareness requires
differentiated branding and messaging, and continued
outreach and education efforts
Item 7

PRESENTATION
100%
90%
80%
T
I
70%
60%
50%
40% 70%
30% 73%
20%
10%
0%
Heard of Silicon Valley Clean Energy
before this survey
> 2020 2022
Error bars show the 90% confidence intervals
20 Survey showed a significant increase in SVCE website visits from 2022 compared to 2020
• 22% of respondents answered that they
had visited the SVCE website
• This is a statistically significant increase
from 14% in 2020
Key takeaway: Continue marketing efforts
to increase website visits and engagement
Item 7

PRESENTATION
50%
45%
40%
35%
30%
25% T
20%
I
15%
10% 22%
14% 5%
0%
Visited website
2020 2022
21 Cost and health and safety were the most important
in making purchasing decisions
• Costs were more important for individuals in SEVI 3 and 4 compared to SEVI 1 and 2
• Convenience and performance were more important for individuals in SEVI 1 Key takeaway: Increase education on cost savings and information on rebates to customers in SEVI 3 and 4, and health/safety messaging in overall marketing efforts
Item 7

PRESENTATION
Weighted
Average Average Rank SEVI 1 SEVI 2 SEVI 3 SEVI 4
Cost* 2.5 2.8 2.9 3.0 2.9
Health and safety
Conveniente/performante*
Environmental impacts
indicates statistically significant difference across all groups at the p < .05 level.

Note; Responses recoded so that factors ranked higher have larger values.

2.7 2.7 2.9 2.9 2.8

2.8 2.6 2.4 2.3 2.4

1.9 1.9 1.9 1.9 1.9
22 On average customers are moderately concerned
about their fossil fuel usage.
• Level of worry about fossil fuels use was lower in 2022 than 2020 Key takeaway: The 'current events' landscape in which the surveys were administered are different. Messaging can be flexed/tailored to lead with other benefits of going all-electric and include the reduction of fossil fuel as an additional benefit of all-electric technologies.

Item 7

PRESENTATION
2022
Weighted Weighted
Average Average
2020
Fossil Fuel Attitude
Extent to which feels personally responsible for climate change Extent to which has thought about their fossil fuel use Extent to which worried about our use of fossil fuels

7.0 6.8

6.0 6.2

6.7 5.9
23 Understanding customer interest and barriers to electric technologies inform messaging and program design.

Interest:
• Most respondents have some level of interest in electric vehicles • Few homeowners have a heat pump water heater or have heard of one Barriers:
• Cost is among the top 5 barriers to adoption for each electric technology • Technology-specific barriers:
o EVs – driving range & charging locations
o Heat pump water heaters - Not having enough information, need to upgrade electric system/panel, technology reliability
o Solar+battery – Not enough information, reliability of technology and “other” barriers such as economics, space, and residence restrictions
Key takeaway: When delivering content on specific all-electric technologies, it is important to directly address top customer concerns and provide relevant resources Item 7

PRESENTATION
• Subtitle
New SV Clean Energy
PowerPoint Template
Item 8

PRESENTATION
Item 8

PRESENTATION

1. Provide a quick status update

2. Answer the most important FAQs
Why is SVCE's 2022 model code all-electric?
rA, s1L1coN VALLEY ~ CLEAN ENERGY 2
•
•
•
•
•
x
x
x
Item 8
©

PRESENTATION
New Activities and Upcoming Priorities
New Activities:

SVCE supporting outreach in Initial SVCE 1:1 Technical oardmembe Council/ Board Los Altos and Los Gatos Jurisdiction and Staff Signed LOI Item Agendized upported Ou Consultation w Meetings reach Consultants
TRC providing support in
Gilroy, Los Altos, and Los Recommended Optional
Altos Hills Campbell X X
Cupertino X X
Gilroy X X X
Upcoming Priorities: Los Altos X X X X
Los Altos Hills X X
Conduct community Los Gatos X X I engagement Milpitas X X Hold council information Monte Sereno X X X
. Morgan Hill X X sessions
Mountain View X X X
Request SVCE meet with Santa Clara Co. X X
additional council members Saratoga X X
Sunnyvale X X X 3
Item 8
©

PRESENTATION
Three Reasons Our 2022 Model Code is
All-Electric

1. All-electric is required to exceed the 2022 California code.

2. Any gas appliances requires a leaky distribution system.

3. Gas appliances will soon become stranded assets.
4 •
•
Item 8

SVCE can provide
technical assistance and
outreach support
throughout the process.

Action
Attend first meeting w/SVCE staff
Identify your ideal level of reach
(your goal)
Confirm appropriate staff are
engaged and aware of your goals
Confirm council info sessions and
vote sessions are agendized
Confirm City Manager signed LOI
Vote
Suggested
Completion Done?
Date
2/1/2022
3/31/2022
3/31/2022
4/30/2022
4/30/2022
10/31/2022
5 Item 8

PRESENTATION
•
•
•
•
•
•
•
•
•
Item 8

New Construction Energy Code (Part 6)
Electric heat pumps are prescribed for:

Residential HVAC
Nonresidential - most include one or both of water heating and HVAC, depending on building type
Residential
Performance credit for all-electric buildings
Required higher ventilation rate for gas stoves
Pre-wiring required for residential dwellings
Energy storage readiness
Nonresidential - Solar PV and Battery Storage required
7 Item 8

PRESENTATION
A gas range is not just a gas range. It is the tailpipe of a complex system.

Source: The Gas Index, 2020
Gas Supply Chain Leaks
PAO~::

PLANT
.. J ~ ■
■
■
•
■
■

GAS TRANSMISSION

PIPELINES

DISTRIBUTION RESIDENTIAL

PIPELINES USERS
8 •
•
Item 8

PRESENTATION
Any natural gas appliances installed today becomes a costly stranded assets •
Illustrative example:

Assume 3500 new housing units are built per year for the next three years with gas cooking and gas water heating. A future incentive program to replace these appliances would cost:
$5.25M for cooktops ($500 incentive)
$21M for water heaters ($2000 incentive)
Plus: Building all-electric today can be less expensive than building mixed fuel. 9 Item 8

PRESENTATION
Type
Building
Electric
Preferred
Mostly-Electric
All-Electric
Gas Ban
No Reach
How it works
Allows mixed-fuel buildings with high energy
performance. Electrification-ready panel and wiring
in mixed-fuel buildings.

Water and space heating must be electric,
exemptions for other appliances. Electrification-ready panel and wiring in mixed-fuel buildings.

All appliances must be electric, with very limited
exemptions.

No gas hookup (via municipal ordinance). Limited
exceptions.

Meet state code minimum requirements.

SVCE Members
2 - Milpitas, Monte Sereno
4 - Campbell (res), Los Altos, Los Altos
Hills (res), Saratoga
5 - County of Santa Clara, Cupertino,
Los Gatos (res), Mountain View,
Sunnyvale
1 - Morgan Hill
1 - Gilroy
10 •
•
•
•
• •
Item 8

PRESENTATION
© 2022 Model Reach Codes - New Buildings
Code Approach
All-Electric Municipal
Ordinance
CALGreen - All-Electric amendment
Benefits
Avoids CEC review and
approval
Flexible (i.e., time-certain or
existing buildings policies can
be included)
Avoids triennial cycle
Avoids CEC review and
approval
Considerations
Must exceed future code updates to
stay relevant (i.e., most effective for
all-electric with limited exceptions)
Requires triennial update or more if
intervening cycle
Model code language for both approaches can be found at BayAreaReachCodes.org 11 •
•
•
Item 8

PRESENTATION
Our 2022 model code is all-electric to help our communities to prepare for an all-electric future.

Member jurisdictions can tailor the codes with exceptions as they deem appropriate.

The model code includes both an energy code amendment and the municipal ordinance option.

Your efforts matter. We look forward to supporting you. 12 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
LOI
Conduct Outreach
Effective
Vote
Potential CEC Submittals
Define Goals
Agendize
Engage Staff
Define Approach
Write Code Language
Council Info Sessions
Item 8

PRESENTATION
Orange text
indicates a
Boardmember task
Goals and Approach Defined
Reach Codes Agendized
City Manager LOI Signed
Staff Responsibilities Defined
Proposed Code language complete
Outreach conducted
Council informed
Final code language complete
Vote complete, same meeting as
state code adoption
Documentation done 13

Silicon Valley Clean Energy Board of DirectorsJune 8, 2022

Silicon Valley Clean Energy Board of Directors
June 8, 2022