1 • Subtitle
New SV Clean Energy
PowerPoint Template
2024 Policy Platform and
Legislative Ad Hoc
Committee
Bena Chang, Director of Government and Legislative Affairs November 8, 2023
Item 3
PRESENTATION
SILICON VALLEY
CLEAN ENERGY
2 Objectives
Requesting SVCE Board approval of:
1. SVCE’s 2024 Legislative Policy Platform; and
2. Creation of the Ad Hoc Committee of the Board to Address Legislative Response to Industry Transition (“Legislative Ad Hoc Committee”).
Item 3
PRESENTATION
3 2024 Policy Platform
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PRESENTATION
4 Recap of 2023 Legislative Year + Forecast
Active state work, federal work focused on implementation of funding. 2023 Review
- Reliability focus – Central Procurement Entity and capacity payments for Resource Adequacy shortfalls
- Interconnection legislation – both transmission and distribution - State Budget Deficit – delay or trimming of previous multi-year climate program commitments
2024 Forecast
- State Budget shortfall likely. Potential for November Climate Bond. - Reliability and affordability.
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PRESENTATION
5 2024 Legislative Policy Platform
No proposed changes to main guiding principles
• Affordability and Rates
• Climate Change Mitigation/Fuel Switching
• Clean, Reliable Grid
• Competitive Equity/Do No Harm
• Health Impact/Safety
• Equity
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PRESENTATION
6 2024 Legislative Policy Platform - Updates
Includes feedback from Ad Hoc Committee
• Refinements on program needs and opportunities.
Continued focus on interconnection challenges.
• Support energy conservation and efficiency.
• Support and fair treatment of carbon-free resources,
including nuclear, wind, and geothermal.
• Climate Bond – support for investments in
decarbonizing electricity, transportation, and housing.
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PRESENTATION
7 Legislative Ad Hoc Committee
Purpose:
• Increase engagement between SVCE Board
and staff on legislative issues
Request Board approval to establish Legislative Ad Hoc Committee.
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PRESENTATION
8 Recommendations
1. Approve SVCE’s 2024 Legislative Policy Platform;
and
2. Create the 2024 Legislative Ad Hoc Committee
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PRESENTATION
1 • Subtitle
New SV Clean Energy
PowerPoint Template
GreenStart and GreenPrime
Evaluating and Confirming Changes for 2024
Board of Directors Meeting
November 8, 2023
Item 4
PRESENTATION
2 What we will discuss today
• Long-term pathways to achieving our mission and offer customer valued clean energy products
• Overview of SVCE standard product offerings
• Challenges with carbon-free energy procurement in 2024 • Short-term options to achieve 100% clean or alternatives • GreenStart
• GreenPrime
Item 4
PRESENTATION
3 SVCE must balance all mission goals
SVCE & State
Goals
Ambitious decarbonization
and climate goals are
increasing costs in the short-term until barriers to scaling supply are addressed.
Mission: Reduce dependence on fossil fuels by providing carbon-free, affordable, and reliable electricity and innovative programs for the SVCE community Item 4
PRESENTATION
4 Long-term picture
New build required by 2045 estimated to exceed
180,000 MWs
SB100 means
SVCE’s current
clean goal will
become all LSEs
compliance
obligation.
What is SVCE’s
long-term value
proposition?
Item 4
PRESENTATION
Decarbonizing the Grid by 2045
Renewables targets:
60% by 2030
90% by 2035
95% by 2040
100% by 2045
^vACARB
New electricity resources needed
180,000
160,000
140,000
120,000
5*100,000
u
<u
80,000
u
I
60,000
z
40,000
20,000
0 Demand Response
Battery Storage
Solar
Out-of-State Wind
Geothermal
Hydrogen Combustion Turbine
Pumped Storage
Customer Solar
Offshore Wind
Wind
Biomass
2023 2030 2045
5 Opportunity to set a new course
SVCE’s mission is durable. Shifting market and policy conditions will necessitate a deeper look at how SVCE balances "clean", "affordable" and "innovative programs“. • Clean Energy Pathways
• 100% RPS
• 24/7 carbon-free
• Google CFE for full portfolio
• Shift focus to incremental clean projects
• Carbon abatement policy to achieve sustainable reductions • Programs to expedite the energy transition
• Load modification to help ensure affordability and feasibility of carbon neutral economy
• Alignment and/or enhancements to clean product offerings Item 4
PRESENTATION
6 SVCE Product Offerings
GreenStart –
100% Clean
Standard offer
~50% from Renewables
~50% Carbon-free (large
hydro and nuclear*)
GreenPrime –
100%
Renewable
Opt-up premium
product
100% Renewable and Green-e
Certified
$0.008 premium
*currently only PG&E allocations of Diablo Canyon
GreenPrime Direct – Available to only certain commercial industrial customers Item 4
PRESENTATION
7 Product Mix
GreenStart GreenPrime
Clean Energy
Standard
100% Clean Energy measured annually 100% Renewable Energy or RPS measured annually
Product Content RPS above California’s RPS or ~50% via
Power Purchase Agreements (PPA) and Short-term PCC1 RECs +
Balance from Carbon/GHG-free non-RPS
resources
100% RPS and Green-e Certified via PPA and
Short-term PCC1 RECs. PCC3 RECs only used
if necessary to meet increased participation
requirements.
Eligible Resources RPS: CEC defined, solar, geothermal, biomass, small hydro, and wind
Carbon-free: Large Hydro and nuclear
allocations
Wind and Solar which meet Green-e
certification requirements.
Rate Set at discount to PG&E GreenStart rate + $0.008 premium Customers 90-95% of retail load 5% of retail load
Emissions Low to zero zero
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PRESENTATION
I
8 Market Conditions
Short-term, 2024,cost of clean energy products is unaffordable. • RPS Renewable Energy Credits (REC) and carbon-free attribute prices have increased 5x since 2021
• Meeting 100% Clean in 2024 may not be feasible, given the lack of clean products in the market
• If achievable, the incremental cost, relative to budget, to meet SVCE’s 100% Clean goal in 2024 could be as much as $30M Item 4
PRESENTATION
9 GreenStart: budget impact & opportunity cost
$30M could possibly fund:
• 11,000 incentive rebates for
heat pump water heaters, or
• 7.5% discount to customers,
relative to PG&E, or
• 4,500 L2 ports for EV’s
These measures would have
lasting results and further SVCE’s
mission!
Is achieving
100% Clean for
2024 the best
way to advance
SVCE’s mission?
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PRESENTATION
Annual HPWHs Needed to Replace all
Gas Water Heaters Over Next 11 Years
[EEEEEEEEEEEEEEEEEEEEMEEEEEEEEEEEEEEEEEEEM
10 GreenStart: Options for 2024
Option #1
Current Policy
Option #2
Buy Nuclear
Option #3
No Additional Purchases
Description Maintain 100% Carbon Free for
2024 – assumes SVCE can purchase
additional CF resources
Maintain 100% Carbon Free for
2024 with nuclear purchases
Stick with current Carbon Free
position (~78%-85% in 2024)
which assume PG&E Large Hydro
allocations.
Expected Reportable
Emissions on Power
Content Label
74 lbs of Co2* 74 lbs of Co2* ~170 lbs of Co2, includes grid emissions
Benefits Maintains SVCE’s historic product
offering
Same as Option #1, but at a lower
incremental cost
• Lower power supply cost, which
helps maintain SVCE reserves,
discount and/or program
funding
Drawbacks • May not be feasible
• Expensive, ~$30M above budget
• Limited emissions reductions for
grid
• May not be feasible
• Expensive
• Limited emissions reductions for
grid
• Requires board approval
• May create concern from
customers, especially
GreenStart customers with
Climate Action Plans
*emissions associated with Coso Geothermal renewable resources Item 4
PRESENTATION
11 GreenPrime Challenges
• Cost of short-term Renewable Energy products
• RPS REC prices are high and GreenPrime premium does not cover incremental cost
• Current premium is .8 cents per kWh; however incremental cost for 2024 is 2.5 cents per kWh
• Participation uncertainty, resource and cost allocation • Green-e Certification
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PRESENTATION
12 GreenPrime Participation
• GreenPrime customers and leadership motivations . . . • large C&I customers – 90 GWh
• voluntary programs, e.g., US EPA Green Power Partnership, USGBC LEED-Certified Buildings
• SVCE member agencies – 95 GWh
• community leadership and municipal GHG targets, US EPA GPP • ~2,000 residential customers – 5 GWh
Sales of GreenPrime currently total 190 GWh/year, ~5% of total SVCE volume.
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PRESENTATION
13 Green-e Certification
Cost of achieving Green-e certification is rising and not necessary • SVCE supplies GreenPrime by purchasing RECs annually from projects that are ‘Green-e Certified’
• independent audit verifies RECs meet strict standards, plus CARB emissions allowances
• considered a ‘gold standard’, recommended by EPA GPP, LEED • GreenPrime customers can continue to achieve EPA GPP and LEED status, if SVCE self-certifies
Item 4
PRESENTATION
14 GreenPrime: Competitive Considerations
PG&E offers 100% RE
via competing ‘Solar
Choice’ program, at a
1.1 to 2.3 cents per
kWh premium.
• Regionally sourced solar
from dedicated projects
• Premium varies significantly
by rate class, averaging
~1.65 cents/kWh
• Green-e Energy certified
• Enrollment limited to 272 MW
• New subscriptions waitlisted
pending PfM ruling
Note: current SVCE
GreenPrime premium
is $0.008 / kWh
Item 4
PRESENTATION
RESERVATION
Sacramento
Santa Rosa
Tonopah
San Francisco
San Jose
Fresno
CALIFORNIA National Parks Death Valley'
National Park
ovisalia
Tulare
Sequoia &
Kings Canyon
Eldorado
National Forest
Sequoia
National Forest
Stanislaus
National Forest
Yosemite
National Park
Mammoth
Lakes
Sierra National Bis£op
Forest
Ridgecrest
San Luis Baku^^d Obispo
Solar Choice Premium
Residential $ 0.0233
Bl Small Comm $ 0.0204
BIO Med Comm $ 0.0108
B19 Large Comm $ 0.0163
B20S Industrial 0.0202
weighted avg: $ 0.0165
15 GreenPrime: CCA comparisons
100% Renewable Energy Programs at Local CCAs
SVCE PCE MCE CPSF EBCE SJCE
Product and
Sourcing
(2022 PCL)
GreenPrime:
- 100% wind
ECO100:
- 50% solar
- 50% wind
Deep Green:
- 50% solar
- 50% wind
SuperGreen:
- 50% solar
- 50% wind
Renewable
100
- 50% solar
- 50% wind
TotalGreen:
- 100% wind
Certification Green-e Green-e WREGIS
(No
certification)
Green-e WREGIS
(No
certification)
Green-e
Premium
cents per kWh
.8 1.0 1.0 1.0 .75 1.0
CCAs generally offer 100% Renewable Energy or RPS programs but are starting to move away from Green-e certification.
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PRESENTATION
16 GreenPrime: Options for 2024
Option #1
Status Quo
Option #2
Directional
Price Increase
Option #3
Price at Standard
Discount to PG&E
Option #4
Price at SVCE 2024
Cost Recovery Rate
Price Change/
GP Cost Premium
No change
.8 cents per kWh
50% increase for 2024
1.2 cents per kWh
100% increase for 2024
~1.6 cents per kWh (avg)
200% increase for 2024
~2.5 cents per kWh
Competitive
Positioning ~50% discount to PG&E ~25% discount to PG&E 1-4% discount to PG&E(std discount policy) 50% premium to PG&E Annual Bill Impact
Res (6000 kWh) /
C&I (10GWh)
N/A – no change +$24 / +$40,000 +$48 / +$80,000 +$102 / +$170,000 Impact to 2024 SVCE
Reserve Contribution < ~$3.2M > < ~$2.5M > < ~$1.7M > None (unless opt-outs) Pro’s - No customer disruption
- Affordable alternative if
GS no longer carbon-free
- Price signal to customers
- Possible alternative if GS
no longer carbon-free
- Unlikely to result in opt-outs
- Price still discounted to PG&E
- No impact to reserve
contribution
- No 2024 cross-subsidy
Con’s - $3.2M impact to 2024
reserve contribution, and
‘cross-subsidy’
- Some customer disruption,
opt-downs likely
- $2.5M impact to 2024
reserve contribution, and
cross-subsidy
- Major customer disruption,
opt-downs very likely
- High-priced alternative to GS
- $1.7M impact to 2024
reserve contribution, and
cross-subsidy
- Major customer
disruption; many opt-downs likely
- Opt-outs possible
- Unlikely alternative to GS
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PRESENTATION
17 Executive Committee Feedback
Staff presented GreenStart and GreenPrime options for 2024 to the EC on 10/27/2024 GreenStart
• Pursue Option#2 – allow the
purchase of nuclear carbon-free resources
• If Option #2 is not feasible,
maintain current clean position
– Option#3
GreenPrime
• Eliminate Green-e certification
• Need to provide a competitive
opt-up product that is 100%
clean
• Increase the premium to be
somewhere between Option
#2 and Option #3
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PRESENTATION
18 Staff's recommended path for GreenStart
2024:
1. Continue to seek carbon-free resources within budget parameters for calendar year 2024
2. Approve the procurement of nuclear carbon-free resources, provided:
1. Allocations from PG&E are not available
2. Sufficient volume is available to achieve 100% Clean below budget
3. If carbon-free resources are not available within budget, adjust 100% Clean goal for 2024 to current position of ~78% Clean Item 4
PRESENTATION
19 Staff's recommended path for GreenPrime
2024:
1. Discontinue Green-e Certification for 2024 for GreenPrime
2. Re-price GreenPrime premium for 2024 from .8 cents per kWh to
1.2 cents per $0.012/kWh, reflecting underlying cost increases but maintaining 100% RE/CF GreenPrime as a viable alternative to GreenStart for our GreenPrime customers.
3. Communicate GreenPrime rate and process changes to customers in December 2023
Item 4
PRESENTATION
20 Staff's recommended path for beyond 2024:
• Return with recommended overall Clean target for CY 2025- 2030 as part of 2024 Integrated Resource Plan and 2045
Pathway to Carbon Neutral discussion
• Re-assess GreenStart and GreenPrime offerings holistically with consideration for findings from above analysis including product value proposition, cost allocation, hedging and price premium Item 4
PRESENTATION
21 Next steps and timeline
1. December Board:
1. Expected rate proposal for GreenStart and GreenPrime including discount to PG&E’s rate
2. Q1 2024: Clean energy futures paper
1. Pathway to 100% Carbon Neutral/Clean by 2045
2. Pathway to 24/7 - Strategic Focus Area
3. Q2 SVCE's 2024 Integrated Resource Plan Scenarios developed
1. Plan to achieve GHG reduction and reliability requirements Item 4
PRESENTATION
22 • Subtitle
New SV Clean Energy
PowerPoint Template
Questions & Discussion
Item 4
PRESENTATION
1 Item 5: Authorize the Chief Executive Officer to Execute a 15- Year Power Purchase Agreement with SunZia Wind PowerCo LLC for Renewable Wind Supply (PCC1) and Potential Replacement PPAs in Substantial Form and Any Necessary Ancillary
Agreements and Documents
SVCE Board Meeting
November 8, 2023
Item 5
PRESENTATION
2 Request
Authorize the Chief Executive Officer to Execute SunZia Wind agreement and potential Replacement PPAs for the procurement of renewable wind energy in substantial form and any necessary ancillary agreements and documents as follows:
1. SunZia Wind PowerCo LLC, Power Purchase Agreement (PPA) (“SunZia Wind”) a. 100 MW or approximately 316,000 MWh per year of Renewable Portfolio Standard (RPS) Portfolio Category Content One (“PCC1”) eligible resources b. 15-Year term PPA with expected commercial operation date (COD) and term from September 30th, 2026, through September 29th, 2041.
c. Total amount not-to-exceed $361,000,000.
Item 5
PRESENTATION
3 Executed Long-Term PPAs
• $3.0 Billion in executed
PPAs
• 19 PPAs
• 1,323 MW of
nameplate capacity
• 67.10 RPS in 2028
• 7 projects on-line and
operating ~32.7% RPS
in 2023
Significant progress made towards meeting long-term clean energy goals Seller Project Name Technology
Generation
MW
Storage
MW
Storage
MWh
Approximate % of
Annual load in 2025
Approximate % of
Annual load in 2028
Term
(years)
Lifetime Not to
Exceed
Authority
(MM$)
SVCE Board
Approval Status
1 MN8 Slate
Solar +
Storage 93 46.5 186 6.70% 6.60% 17 $198 Oct-18 Online
2 Ormat Casa Diablo Geothermal 7 1.40% 1.40% 10 $43 Feb-20 Online 3 Atlantica Coso Geothermal 43.8 9.60% 6.50% 15 $331 Mar-20 Online 4 Leeward Rabbitbrush
Solar +
Storage 40 8 20 3.00% 3.00% 15 $64 Apr-20 Online
5 NextEra Yellow Pine
Solar +
Storage 50 26 104 4.10% 4.00% 20 $128 May-20 Online
6 Avantus Aratina
Solar +
Storage 80 20 60 6.60% 6.60% 20 $174 Jun-20 Pre-construction 7 174 Power
Global Atlas Solar 50 3.80% 3.80% 10 $32 Jan-21 Pre-construction 8 SB Energy Angela
Solar +
Storage 20 10 40 1.40% 1.40% 15 $35 Mar-21 Pre-construction 9 AES Mountain View Wind 33.3 3% 3% 20 $128 Apr-21 Online 10 Origis San Luis West
Solar +
Storage 62.5 15.625 62.5 4% 4% 15 $74 Apr-21 Pre-construction 11 Clearway Victory Pass
Solar +
Storage 100 25 100 8% 8% 15 $173 May-21 Construction
12 Terra-Gen Cameron Crest Wind 77.7 5% 5% 15 $150 May-21 Online 13 Rev
Renewables Tumbleweed
Long Duration
Storage 15.9375 127.5 n/a 15 $100 Feb-22 Pre-construction 14 Onward Goal Line
Long Duration
Storage 14.2 113.6 n/a 15 $100 Mar-22 Pre-construction
15 Ormat
Geothermal
Portfolio Geothermal 16.75 3.30% 4.40% 20 $256 Jun-22 Pre-construction 16 OME Fish Lake Geothermal 1.82 0.40% 0.40% 20 $30 Jun-22 In-development 17 MRP Hanford
Thermal +
BESS 99.4 131.4 131.4 12 $280 Apr-23 In-development
18 NextEra Grace Solar 120 0 9% 15 $286 Aug-23 Pre-construction 19 NextEra Yellow Pine III Storage 0 115 460 15 $420 Aug-23 Pre-construction Total: 895 428 1405 60.30% 67.10% $3,002
Item 5
PRESENTATION
4 Fall 2022 Procurement Efforts
SVCE Procurement Goals:
• Renewable Portfolio Standard
(RPS)
• Integrated Resource Plan
(IRP) GHG Reductions
• Mid-term Reliability (MTR)
Procurement Order
• Portfolio Diversity
• Technology
• Geography
• Resource Adequacy
• Carbon Free Energy &
Standalone Storage Projects
• Term: minimum 10 years
November
2022
• Issued RFP – seeking diverse RPS
& MTR Resources
August
2023
• Executed two agreements per
RFO
April-May
• Bilateral offer from Pattern Energy
for new SunZia Wind project
Item 5
PRESENTATION
5 SunZia Wind
3,515 MW Wind park in New Mexico • Connects to the Pinal Central Substation using the SunZia
Transmission line
• From Pinal the resource will
connect with CAISO at Palo
Verde
• Several off-takers • PCE recently announced 200 MW • SVCE’s share is 100 MW Item 5
PRESENTATION
6 SunZia Wind PowerCo, LLC
• Meets 7 to 8% of SVCE’s
retail sales
• IRP GHG reduction target
• 75% RPS by 2030
• SB100 Clean Energy target
of 100% by 2045
• Meets long-term RPS
requirements
• Supports GreenStart and
GreenPrime
• Provides ~34 MW of MTR
capacity
• Provides Resource
Adequacy
• Pattern Energy, Inc. Developer /
Parent Company
• 100 MW New Solar
• 316 GWh, PCC1 Renewable Energy
•MTR and RA countable
Product &
Attributes
• SunZia Wind PowerCo LLC
• Torrance, Lincoln and San Miguel Counties in New Mexico Project Name &
Location
• 15-year, Mid-to-Late 2026 Expected Delivery
Term Start
• Fixed price ($/MWh) for Metered Energy. No Escalator. Contract Price Structure
Item 5
PRESENTATION
7 Annual RPS Progress
SunZia Wind will help
SVCE meet ongoing
SB100 RPS requirements
as well as SVCE’s Agency
RPS target that climbs to
75% in 2030
SB100 Carbon Neutral
targets per SB 1020
60% by 2030
90% by 2035
95% by 2040
100% by 2045
Item 5
PRESENTATION
Figure 1: SVCE RPS vs Load
4,500,000
4,000,000
3,500,000
3,000,000
|
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Calendar Year
^^bPG&E Nuclear Allocation ^^BGeothermal bbb Biomass
^^bSolar ^^bWind ^^bLarge Hydro
rams SunZia Wind 100% Clean Goal SB100 Target
— — — Agency RPS Target
8 Compliance with Long-Term RPS
Procurement Mandate
• SB350 requires 65% of
RPS to come from long-term (>=10 years)
contracts
• SunZia Wind adds to
Compliance Periods 5
and 6 obligations
Item 5
PRESENTATION
CP#4
2021-2024
CP#5
2025-2027
CP#6
2028-2030
1. State Mandated RPS per Compliance Period - % of
Retail Sales 40% 50% 57%
2. State Mandated % of Mandated RPS (Row #1) to be
Contracted Under RPS Long-term Contracts 65% 65% 65%
3. State Mandated % of Retail Sales with RPS Long¬
term Contracts (Row 2* Row 1) 26% 33% 37%
4. SVCE: Current Compliance with Row #3: Existing RPS
Achieved with Long-term Contracts 30.70% 66.00% 71.70%
5. SVCE: RPS Achieved with SunZia Wind 30.70% 69.30% 79.50% Open Position relative to State Mandate (Row #3)
+Above/ (-) Short 4.70% 36.30% 42.50%
9 Energy and Reliability Portfolio
SunZia Wind increases
Clean Energy from
Wind by 7-8%
SunZia Wind increases
Clean RA Capacity by
~3%
Sunzia Wind provides
34 MW of MTR eligible
capacity in 2027
SunZia Wind will
increase clean energy
and capacity
Item 5
PRESENTATION
Estimated for 2028
Annual Energy
(GWh)
Energy Source as a
Percent of Total
Retail Sales
Capacity Source as a
Percent of Total RA
Requirement
Biomass 0 0% 0%
Geothermal 503 12% 12%
Solar 1,820 45% 12%
Wind with SunZia 788 19% 6%
Large Hydroelectric 871 21% 0%
Battery Storage 0 0% 7%
Natural Gas RA-only 0 0% 47%
Hanford -Natural Gas 70 2% 17%
Total 4,052 100% 100%
10 Summary
SunZia Wind diversifies SVCEs portfolio while meeting clean objectives • Contributes 7-8% of RPS-eligible energy on an annual basis • Helps meet clean energy goals, SB 100, SB 350 and SB 1020 • Reduces GHG emissions
• Can provide Resource Adequacy capacity
• Can provide MTR attributes for 2027 and beyond
• Provides geographic and technology-based diversity to SVCE’s Portfolio
• Provides net positive portfolio value
Item 5
PRESENTATION
11 Request
Authorize the Chief Executive Officer to Execute SunZia Wind agreement and potential Replacement PPAs for the procurement of renewable wind energy in substantial form and any necessary ancillary agreements and documents as follows:
1. SunZia Wind PowerCo LLC, Power Purchase Agreement (PPA) (“SunZia Wind”) a. 100 MW or approximately 316,000 MWh per year of Renewable Portfolio Standard (RPS) Portfolio Category Content One (“PCC1”) eligible resources b. 15-Year term PPA with expected commercial operation date (COD) and term from September 30th, 2026, through September 29th, 2041.
c. Total amount not-to-exceed $361,000,000.
Item 5
PRESENTATION
• Subtitle
New SV Clean Energy
PowerPoint Template
Item 6
PRESENTATION
Item 6
PRESENTATION
Presentation Objectives
1. Establish Background
2. Present Program Overview and Schedule
3. Obtain Executive Committee Input
Item 6
PRESENTATION
Significant Emission Sources
Most emissions in our region come from buildings and transportation Approximated emission proportions based on internal SVCE analysis Item 6
PRESENTATION
You took first critical step toward pollution-free and future¬ ready buildings with new construction reach codes.
$0 replacement cost
50,000 annual MT carbon
2022 State code With adopted reach codes
$85M savings at the
time of construction
0 MT carbon pollution
from new water heaters
^10,000 more families with
reliable home EV charging
$0 savings at the
time of construction
'$25M locked-in replacement
cost from gas to electric
~50k homes with heat pump
water heating
10,000 families without
access to home EV charging
'50k homes with gas water
heating
*lllustrative
example showing
the impact of
building RHNA
required housing.
Item 6
PRESENTATION
Now it is time to ramp up the transition in
existing buildings.
[EEEEEGEEEEEEEEEEEEEM[GEEEEEEEEEEEEEEEEEEM tGEEEEGEEEEEEEEEGEEEEB [eeeeeeeeeeeeeeeeeeem[geeeeeeEeeeeeeeeeeem [geeeeeeeeeeeeeegeeemiGEEEEEEEEEEEEEEEEEEEB tEEEEEEEEEEEEEEEEEEEM tGEEEEEEEEEGEEEEEEEEM iGEEEEEEEEEEEEEEEEEEM in
CM in
HPWH Installs Under Current
SVCE Programs (Annual)
Item 6
PRESENTATION
Member agencies have the power to
make it easier for communities to
upgrade to clean, healthy homes
by modernizing permitting processes
and implementing sensible policies.
Item 6
PRESENTATION
Good local policies can help us from 100s to
1,000s of upgrades a year.
=100 HPWHs/yr
HPWH Installs Under Current
SVCE Programs (Annual)
2022 2023
Annual HPWHs Needed to be
Installed Under BAAQMD Rule
Other
policy?
Electrification
at remodel
New AC is heat pump
illustrative
benefits of
policies
Per year, from
2027-2037
7 Item 6
PRESENTATION
SVCE and Member Agency Partnership
SVCE rebates and federal tax credits can reduce the financial cost of electrification. Local codes and permitting can increase adoption at the best time and with less friction.
SVCE is launching two complementary programs to provide our member agencies $4M in technical resources and grants to enable sensible local policies and smoother local permitting. 8 Item 6
PRESENTATION
Resources to Help Member Agencies Advance
Available
to All
Available
to
Leadership
Cohort
Resources Available Permit
Modernization
Policy
Experimentation
1:1 consultation w/SVCE staff (Board member & agency
staff) X X
Tailored action plan for each jurisdiction
X X
Technical, legal, and staff support resources
X X
Access to national-level climate change trainings
X X
Stipend for part-time, one-year fellow
X X
Expanded consultant support to implement leading-edge
initiatives X X
9 Item 6
PRESENTATION
Example Approaches
The leadership cohort must bring at least one leading practice to the council for a vote within 18 months to receive access to expanded resources
Foundational Improved Leading
Permit Modernization Streamlined
applications
Virtual inspections Contractor self¬
certification program
Policy Experimentation Time of sale disclosure
requirements
Electric readiness at
remodel
Incentives for
electrification at
remodel
A comprehensive list of approaches is available in the appendix; may be added to over time 10 Item 6
PRESENTATION
Implementation Path
Develop
communications
materials,
recommendations,
list of available
resources (Oct ‘23)
Meet 1:1 with agency
staff
(Nov ‘23)
Meet 1:1 with
Directors and
Alternates
(Nov ‘23)
Develop agency¬
specific plans
(Jan ‘24)
Work w/each agency
to take the steps
they want to take
(Feb ’23 and on)
For meetings with Board Members and some staff we will combine messaging on permit modernization and policy into one comprehensive package. 11 Item 6
PRESENTATION
Our team is here to support you all along the way.
Zoe Elizabeth
Deputy Director Decarb. Policy & Program
Tony Eulo
Snr. Manager Public Sector Services
Jessica Cornejo
Snr. Specialist
Peter Mustacich
Programs Lead
Bena Chang
Director of Gov. & Leg Affairs
Plus a bench of technical, legal, and engagement consultants 12 Item 6
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We can’t make this transition on our
own or all at once. But working
together, step-by-step, we will get
farther faster.
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Program Backgrounds
1. Both programs address member agency innovation and “readiness” to accommodate BAAQMD Regulations
2. Both relate to SVCE Strategic Plan Goal 10 to “Accelerate deployment of currently adopted decarbonization strategies and goals...”
3. Permit Modernization: ($3.2M budget, updated March 2022) “...simplify general electrification by providing free technical support, offering grants to cities to commit staff resources towards this effort and potentially offering an award for cities able to get their processes to meet certain outcomes (e.g., low fees, quick turnaround time). These efforts will enable future policy by reducing friction in customer electrification process and improving cost-effectiveness.”
4. Policy Experimentation: ($1.9M budget, updated March 2022) “support interested agencies in exploring policies targeting existing buildings through free technical analysis, an award for agencies who adopt innovative policy and potentially a tailored incentive program to pair with the policy if necessary...”
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Immediate Next Steps
September MAWG
October Executive Committee
Start Procurement Processes for Consultants
November Board Info Item
Active Implementation
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2021 % Emissions by Source % Total Emissions How many machines need to be electrified? O>We need to electrify ~400K heaters in
SVCE territory alone.
DRAFT ANALYSIS
Non-Residential
Buildings Natural
Gas
Residential
Buildings Natural
Gas
Residential Buildings
Non-Residential
Buildings Electricity
Electricity
Commercial On-Road Gasoline
Commercic
On-Road
Diesel
Off-Road Not
Specified
(CARB)
Non-Commercial
On-Road Gasoline
(?) cooking & other equipment
6.5k water heaters
7k furnaces
Covered under
BAAQMD Rules
Covered under
165k space heaters
230k water heaters BAAQMD Rules
125k stoves
80k dryers
15k fireplaces
10k spa/pool pumps
Switch 4% of accounts from DA/PG&E
100% carbon-free electricity sources
Electrify 100% Commercial VMT from MDHD Vehicles
Electrify 100% Commercial VMT from Diesel-Fueled MDHD Vehicles Electrify construction & mining equipment, agricultural equipment, lawn care tools, and other industrial equipment
400,000 light-duty vehicles
Source: SVCE 2021 GHG Inventory
17 What happens when the power goes out?
Heat Pump
Space Heating
Gas furnaces require
electric fans, but
fireplaces still work.
Heat Pump
Water Heating
Gas water heaters
require electronic
ignition or pumps
Induction
Cooking
Some gas stoves will
work without
electricity, but it’s
unsafe
Electric Clothes
Dryer
Gas dryers use electric
motors to run the
tumbler
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Appendix-Part 2
Permit Modernization Recommendations
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Supporting Recommendations
20 Description Problem to Solve Solution
Staff training Lack of familiarity with electrification technologies (especially HPWH and
EVI) delays plan reviews and
inspections. This lack of understanding
can result in unneeded panel
upgrades.
Provide both in-person (roadshow) and on-demand (pre-recorded) training sessions for City staff to become more familiar with
electric appliances and installs. Convene
specific trainings on EVI rules, technologies,
and best practices -particularly on
calculating load requirements.
Pre-application
support materials
Many jurisdictions lack some or most
pre-application support materials to
help prepare applicants and reduce
kickbacks for missing information
Develop a master template for different
permit types and work with one jurisdiction to
customize and integrate it into their
processes
Identify electrification
permitting
disincentives
Building electrification solutions can be
harder to permit than gas solutions -
commonly for water heaters
Work with all jurisdictions to ensure that
HPWH permits are as easy to obtain as gas
water heater permits
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Supporting Recommendations (pg. 2)
Description Problem to Solve Solution
Virtual inspections Inspections require contractors to wait onsite for inspectors to arrive. In-person
inspections can lead to other issues
getting flagged outside of the permit
scope.
Virtual inspections can be streamlined and
faster to schedule due to reduced City staff
efforts. They may also help reduce potential
of other issues getting flagged. (Note: best
suited for straightforward, residential permit
applications) Work with one jurisdiction to
pilot this project by providing training and
equipment
Free permit pilot Some customers view permit costs as a major disincentive to not get a permit
Fund free electrification permit pilot projects
in 1-3 jurisdictions
Permit concierge Some customers don’t know how to
prepare a permit application and view
getting a permit as too difficult
Fund 3rd party permit concierge to assist
customers in getting permits + offer 3rd
party support to permitting agencies to
expedite review
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Inflecting Recommendations
Description Problem to Solve Solution
Remove permit
requirements for
some appliances
Permits for some simple appliances
(cooktops, water heaters, etc.) do
not significantly enhance public
safety and consume valuable staff
bandwidth that could be redirected
to higher-value activities
Initiate a pilot project with one agency to
eliminate the need for permits under
certain circumstances. SVCE to work with a
law firm on liability-release language to
safeguard a City in removing permits (e.g.,
"we release the City from all liability...")
Distribute pre¬
approved permits
66 66 Instead of removing permit requirements
as above, initiate a pilot project to send
pre-approved permits to customers fitting
certain circumstances.
Facilitate permits for
certified contractors
66 66 Pilot a contractor certification program in
which confirmed and vetted contractors
could complete work with a pre-approved
permit
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Inflecting Recommendations (pg. 2)
Description Problem to Solve Solution
Best practices in
planning for building
electrification
technologies (Note:
this element merges
with policy
experimentation)
Well-intentioned local regulations
(noise, aesthetics, etc.) may prevent
the efficient siting of electric
appliances.
Develop best practices guidance for
tangential issues (not health and safety)
like undergrounding requirements, noise
restrictions, etc. in order to support
agencies in considering the electrification
impacts of otherwise well-intended
regulations
Inspections with
blinders on
Inspectors coming for an electric
appliance may notice existing
unpermitted work and require
remedies, increasing customer
reluctance to obtain permits
Evaluate related legal issues and
potentially establish legal shield for
focused inspections without adding liability
to agencies. Initiate a pilot project with one
agency.
Provide added
home value
Getting permits adds complexity,
cost, and time for residents, with
very little added value
Provide a certificate of quality inspection
that can be listed on the Multiple Listing
Service during resale
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Monitoring Recommendation
Description Problem to Solve Solution
Agency benchmarks Information about the status of agency efforts is not published and made
available to local leaders.
Create a Red-Yellow-Green scoring system
for agencies on the implementation of permit
modernization for building electrification
performance, (very similar to Go Biz’s system
for EVI) Example measures to evaluate
include single permits for HPWH, reduced or
virtual inspections for HPs, over-the-counter
permitting, etc.
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Appendix-Part 3
Policy Experimentation Details
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Policy Experimentation
1. 13 separate projects - meet each member agency where they are to develop customized action plans
2. Start with idea “packages” for agencies to consider and adapt
3. Provide comprehensive resources for all member agencies - draft codes, regular meetings, educational events, etc.
4. Coordinate a leadership cohort of three jurisdictions willing to step forward and provide expanded resources to support
faster and deeper actions
26 Resources for Innovative Policy
Experimentation (RIPE)
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27 TRC will remain our technical consultant preparing ordinances customized with the particular regulations each agency desires. A community, for example, may want to mandate that rooftop package units be all-electric after a certain date and that home air conditioning units be exclusively heat pumps after a different effective date. In this instance, TRC would start with the agency’s existing municipal code and develop an ordinance that would specifically introduce these regulations as desired.
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TRC Code Development
28 As the 9th Circuit’s decision indicates, the road to decarb nirvana is lined with legal potholes. We have nearly completed hiring a law firm to provide specialized legal services addressing the many aspects and ramifications of policy issues that local agencies may want to explore.
The firm will be experts on local government law with experience on a range of relevant issues.
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Special Counsel Services
SVCE staff and consultants will provide comprehensive resources for ALL member agencies.
• Meet with Boardmember, Alternate, and (when desired by agency) Key Staff to gauge what each agency’s interests are in evaluating, developing and introducing innovative decarbonization policies. These meetings will pivot off of the agency’s climate action plan, BAAQMD rule implementation, and other policy guideposts • Develop a customized plan with each agency reflecting its wants, needs, political realities, and resources (what, when, how, who). While there will undeniably be commonalities, these will essentially be considered 13 separate initiatives • Work closely with each agency in implementing their plan by providing staff support, resources, data, and direct implementation assistance
• Create Leadership Cohort for agencies in the lead
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RIPE Planning
30 While the actual resources desired by each agency are still be determined, ideas for discussion include:
• High-level building stock information
• Standard messaging framework
• Active community engagement by contracted community engagement firm • Funding for temporary agency staff, intern, or fellow specifically dedicated to implementing work identified in the plan developed with the agency. • Consultant hours to assist with conducting specific research, drafting staff reports, and implementing innovative policies
Since program resources are not unlimited, all of these potential resource offers will be balanced with the agency’s aspirations and the overall value they represent to decarbonization.
What else should we offer?
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RIPE Resources
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Leadership Cohort Concept
SVCE will provide deeper levels of resources to an Agency Leadership Cohort of three agencies. The Leadership Cohort will demonstrate policy viability and pave the way for other agencies to follow in their footsteps.
To join, an agency must commit to pursuing three or more decarbonization or permit modernization initiatives. The City Manager (County Executive) must send a letter directing staff to participate and commit to bringing at least one policy to vote within 12 months.
In addition to being eligible for more of the RIPE resources listed on slide 14, Cohort agencies would be eligible for leadership training, conference scholarships, and recognition.
What else should we offer?
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Menu of Cohort Activities (Initial List)
New Deeper Reach Code
Required energy storage
Capturing additional remodels
Existing Building Ordinance
Replace on Burnout Early (pre-BAAQMD)
Commercial RTU heat pump requirements
BAAQMD Backstop
Neighborhood Upgrade Initiative
Induction Cooking Push
EVI Siting Facilitation
Permit Modernization Inflecting Actions
33