Silicon Valley Clean Energy Authority
Report to the Board of Directors
March 13, 2024
Item 3
PRESENTATION
PISENTI & BRINKER up
Certified Public Accountants & Advisors
Introduction
• Kellin Gilbert, CPA
• Audit Partner
• 17 years in public accounting and performing audits
of government entities
• Currently working with several CCA’s throughout
California
• Aliandra Schaffer
• Engagement Supervisor
• 4 years in public accounting and performing audits of governments (CCA’s)
Item 3
PRESENTATION
Anindependently ownedmember
RSM US Alliance
RSM PISENTI & BRINKER llp
Certified Public Accountants & Advisors
Results of current year audit:
• The audit is complete. We have reported the following:
• SVCE received a “clean” audit opinion.
• Unmodified opinion – Based on our audit, the financial statements are materially accurate.
• In addition, at the request of management, we have provided a separate letter stating that we did not identify any significant deficiencies in internal controls.
Item 3
PRESENTATION
Anindependently ownedmember
RSM US Alliance
RSM PISENTI & BRINKER llp
Certified Public Accountants & Advisors
Audit of the years ended September 30, 2023
and 2022 Financial Statements
Relative Roles & Responsibilities
• Management is responsible for preparing the Financial Statements and establishing a system of internal control
• Auditor is responsible for auditing the Financial Statements • Considering risks of material misstatement in the Financial Statements
• Considering internal controls relevant to the Financial Statements • Performing tests of year-end balances based on risk assessment • Evaluating adequacy of disclosures
Item 3
PRESENTATION
Anindependently ownedmember
RSM US Alliance
RSM PISENTI & BRINKER llp
Certified Public Accountants & Advisors
Audit Procedures
Significant areas of focus
• Review policies and procedures for various types of financial transactions • Revenue recognition
• Accounts receivable and revenue
• Test a sample of customer billings
• Relate total cash received during the year to revenue • Look at cash received subsequent to year-end and relate to A/R • Review revenue recognition through year-end and the method for determining (accrued revenue)
• Cash
• Confirmations sent to financial institutions
Item 3
PRESENTATION
Anindependently ownedmember
RSM US Alliance
RSM PISENTI & BRINKER llp
Certified Public Accountants & Advisors
Audit Procedures
Significant areas of focus
• Accrued Cost of Electricity
• Review subsequent bills from electricity providers and cash payments • Other Liabilities
• Reviewed contracts and other support to determine completeness of amounts recorded
• Financial Statement Note Disclosures – Complete and without bias Item 3
PRESENTATION
Anindependently ownedmember
RSM US Alliance
RSM PISENTI & BRINKER llp
Certified Public Accountants & Advisors
Required Board Communications
• There were no material changes
to SVCE’s accounting policies or
significant new policies adopted
during the year.
• We did not identify any
significant or unusual
transactions or applications of
accounting principles where a
lack of authoritative guidance
exists.
Item 3
PRESENTATION
Anindependently ownedmember
RSM US Alliance
RSM PISENTI & BRINKER llp
Certified Public Accountants & Advisors
Required Board Communications (continued)
• We did not propose any material
adjustments to the financial statements.
Other required communications with those charged with governance:
• We did not identify any instances of
fraud within the financial statements.
Item 3
PRESENTATION
Anindependently ownedmember
RSM US Alliance
RSM PISENTI & BRINKER llp
Certified Public Accountants & Advisors
Required Board Communications (continued)
• There were no disagreements with
management concerning the scope of
our audit, the application of
accounting principles, or the basis for
management’s judgements on any
significant matters.
• We did not encounter any difficulties in
dealing with management during the
performance of our audit.
Other required communications with those charged with governance:
Item 3
PRESENTATION
Anindependently ownedmember
RSM US Alliance
RSM PISENTI & BRINKER llp
Certified Public Accountants & Advisors
Kellin Gilbert: 707-577-1511
Questions?
Item 3
PRESENTATION
PISENTI & BRINKER up
Certified Public Accountants & Advisors
New SV Clean Energy
PowerPoint Template
Subtitle
Item 4
PRESENTATION
MY 23-24 Adjusted
Operating Budget
SILICON VALLEY
CLEAN ENERGY
Amrit Singh
Board of Directors Meeting
March 13, 2024
•
•
•
•
•
•
Item 4
PRESENTATION
Purpose
Action: Adopt Resolution
Approving Mid-Year 2023-2024
(MY 24) Adjusted Operating Budget
Review the Budget Timeline
Highlight Changes Since the
Adoption of the Adjusted Budget in
December
Compare Mid-year and Adjusted
Budget Key Line Items
Review 5-yr Reserve Projections
Provide Staffing Update
Adopt Resolution
Item 4
PRESENTATION
Mid Year FY23-24 Budget Approval Timeline
May May/June August August
BOD adopts the budget and
agrees to revisit additional
expenditures later in the
year when there would be
more certainty on PG&E
rates
Executive Committee and Finance
and Admin Committee review the
updated budget based on the
revised PG&E rate filing and
provide feedback on any
additional expenditures
BOD reviews and adopts
amendments to the budget
incorporating any additional
expenditures
Mid-Year Budget
Review / Adjustment
3 Excellent FY24 But Softening Margins over 5-yr Outlook • Healthy contribution to reserves of $112.6 million
• An Increase of ~ $38.8 Million from $73.8 Million at adjusted budget (approved in December 2023)
• Revenue forecast mostly remains unchanged
• A slight uptick in 2024 offset by weaker sales in Oct.- Dec. 2023 • Key Drivers of Increase:
• Drop in Forward Energy Prices
• Cal 24 prices dropped -13.6% since the adjusted budget • Power Supply cost for Oct-Dec 2023 was -$21.2M or -21% below the adjusted budget, plus an additional $12.7 million reduction projected for Jan-Sep 2024
• $6.4M higher Investment Income
• Operating expenses decreased slightly
• Savings from staffing vacancies offset additional headcount costs • Slight increases in professional services and marketing expenses An Increase of ~$38.8 Million vs Adjusted
Budget:
• Softening energy prices negatively impacts 5-
yr outlook
• Negative contributions to reserves forecasted for FY
25 and 26.
Item 4
PRESENTATION
Mid-Year Budget Highlights
Revenues - $1.8M
Power Supply Cost
- $33.9M
Other Operating Expenses -$0.2M
Investment Income +$6.4M
Reserve Balance +$38.8M
•
•
•
SILICON VALLEY CLEAN ENERGY
FY 2023-24 OPERATING BUDGET
($ in thousands)
FY 2023-24 FY 2023-24
ADJUSTED MID-YEAR
DESCRIPTION BUDGET BUDGET $ %
Energy Revenues 554,685 552,864 (1,820) -0.3%
Power Supply Expense 399,546 365,617 (33,929) -8.5%
Operating Margin 155,138 187,247 32,109 20.7%
Operating Expenses 32,361 32,118 (243) -0.8%
Non-Operating Revenue (Expense) 6,431 12,864 6,434 100.0% Annual Transfers and Other Expenses
Program Fund 28,874 28,874 0 0.0%
Nuclear Allocation 2,188 2,188 0 0.0%
Multi Family Direct Install Program 0 0 0 -
Electrification Discount Program 0 0 0 -
Customer Bill Relief 4,300 4,300 0 0.0%
Building Fund 20,000 20,000 0 -
Other 50 50 0 0.0%
BALANCE AVAILABLE FOR RESERVES $73,796 $112,582 $38,785 52.6% Change
Item 4
PRESENTATION
Annual Budget vs. Mid-Year Adjusted Budget
Power Supply Expense
decreased by 8.5%
Supports Overall
Customer Discount of
Higher non-operating
revenue (Investment
Income) due to higher
interest rates
•
•
•
•
•
Item 4
PRESENTATION
Reserve Projection
Projected End of FY Reserves:
$435 Million
367 Days of Cash on Hand
Includes Unspent Program
Funds and Building Fund
If all Approved Programs Dollars
and Building Fund were Spent :
$338 Million in Reserves
284 Days of Cash on Hand
Reserves Forecast
$800
$700
$600
$500
v>
c
o
= $400
c
$300
$200
$100
$0
FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28
Total Adjusted Ending Reserves Reserves Maximum Reserves Reserves Assumes $20 million Building Fund spent in FY 2025-26. 6 •
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Item 4
PRESENTATION
EXEC (2)
Staffing
Current Budgeted
Staffing
Currently being filled under the CEO personnel authority: General Counsel, Senior Program Specialist, and Board Clerk.
58 Full-time Employees (4 Vacancies)
3 Intern positions (2 Open)
4 Part-time Employees
General Counsel (1)* - to ensure adequate legal support both in complexity and volume as the agency grows and matures
Board Clerk/Executive Admin (1)* - to assist with Board meetings and provide additional administrative support to the organization
3 Climate Corps Fellows
1 Long-term Independent Consultants
DPP (1)
Senior Program Specialist (1)* - to further support the development of the agency's increasing Decarbonization Programs
Proposed Staffing
62 Full-time Employees (8 Vacancies)
3 intern positions (2 Open)
4 Part-time Employees (1 Open)
3 Climate Corps Fellows
1 Long-term Independent Consultants
The proposed budget requests approval for an additional position 4PRO (1)
Associate Power Analyst ( ) -to support the increasing complexity of managing the energy procurement portfolio
Timeline FTE
Authorized in the Annual Budget 58
Feb’24 CEO Personnel Authority +3
Midyear Budget Request +1
Total 62
•
•
•
•
•
•
Item 4
PRESENTATION
Summary - Despite ongoing
uncertainty, the overall financial
picture looks excellent for FY23-24
Next Steps
Staff will conduct financial stress test analyses and
recommend any updates to the reserve targets
Stress test results will be presented to the Finance
and Admin Committee and the Executive
Committee in May and to the Board in June
Staff will present the framework for developing the
next fiscal year’s budget to the Finance and Admin
Committee in May
Draft budget for FY24-25 will be presented to the
Finance and Admin Committee and the Board in
August
FY24-25 budget will be presented to the Board for
adoption in September
Many Risks can Deplete Reserves
Market Prices
Reduced Revenues
via Higher PCIA and
Lower PG&E Rates;
IncreasedPower
Supply Expense
SUPPLY
Project delays;
PPAs Defaulter
Renegotiate for
Higher Prices
L&R ISSUES PAYMENTS LOAD LOSS CYBER-RISK
IRP, RPS, RA
Reform/Penalties,
PCIA, POLR
Customer Defaults DirectAccess Hardware, Software,
and Potential for and Trainingto combat
Expansion Ransomware and
Phishing
Rate Increasesdue
to socialized wildfire
costs,Energy Price
Increaseswill
ultimately impact
usage and
electrification
8 Adopt Resolution 2024-05, Approving the Mid-year 2023-24 Adjusted Operating Budget that projects contributing $112.6 million to the
reserves.
Item 4
PRESENTATION
Recommendation
9 Item 4
PRESENTATION
Thank you! / Questions?
10 SILICON VALLEY CLEAN ENERGY
FY 2023-24 OPERATING BUDGET
($ in thousands)
FY 2023-24
MID-YEAR
ADJUSTED
DESCRIPTION BUDGET
ENERGY REVENUES
Energy Sales 550,852
Green Prime 1,962
Other Income 50
TOTAL ENERGY REVENUES 552,864
ENERGY EXPENSES
Power Supply 365,617
OPERATING MARGIN 187,247
OPERATING EXPENSES
Data Management 3,413
PG&E Fees 1,470
Salaries and Retirement 14,818
Professional Services 8,210
Marketing & Promotions 1,250
Notifications 315
Lease 551
General & Administrative 2,091
TOTAL OPERATING EXPENSES 32,118
OPERATING INCOME (LOSS) 155,129
NON-OPERATING REVENUES
Interest Income 12,867
Grant Income 0
TOTAL NON-OPERATING REVENUES 12,867
NON-OPERATING EXPENSES
Financing 3
Interest 0
TOTAL NON-OPERATING EXPENSES 3
TOTAL NON-OPERATING INCOME
(EXPENSES) 12,864
CHANGE IN NET POSITION 167,994
CAPITAL EXPENDITURES, INTERFUND
TRANSFERS & OTHER
Capital Outlay 50
Building Fund 20,000
Transfer to CRCR Fund 0
Program Fund 28,874
Nuclear Allocation 2,188
Multi Family Direct Install Program 0
Electrification Discount Program 0
Customer Bill Relief 4,300
Other 0
TOTAL CAPITAL EXPENDITURES, INTERFUND
TRANSFERS & OTHER $55,412
BALANCE AVAILABLE FOR RESERVES $112,582
Item 4
PRESENTATION
2023-2024 Mid-Year
Adjusted Operating
Budget
($ in Thousands)
FY23-24 FY24-25 FY25-26 FY26-27 FY27-28
Operating Revenue (Budget) (Forecast) (Forecast) (Forecast) (Forecast) Electricity Sales, Net1
$ 550,852 $ 485,338 $ 494,921 $ 508,590 $ 515,415
GreenPrime Electricity Premium 1,962 2,236 2,248 2,264 2,283 Total Operating Revenues 552,814 487,574 497,169 510,854 517,698 Operating Expense
Power Supply $ 365,617 $ 417,018 $ 470,894 $ 474,812 $ 449,466 Operating Margin 187,197 70,556 26,275 36,041 68,232
Data Management 3,413 3,583 3,762 3,950 4,148
PG&E Service Fees 1,470 1,544 1,621 1,702 1,787
Staff Compensation 14,818 15,559 16,337 17,154 18,011
Consultants and other Professional Fees 8,210 8,703 9,225 9,779 10,366 Communications and Noticing 1,565 1,643 1,725 1,811 1,902 General and Administration 2,643 2,775 2,913 3,059 3,212 Transfers to Programs Fund 35,362 9,751 9,943 10,217 10,354 Total Operating Expenses 433,097 460,575 516,421 522,484 499,245 Operating Income 119,717 26,998 (19,252) (11,631) 18,453 Nonoperating Revenue (Expense)
Other Income 50 51 51 52 52
Investment Income 12,867 13,811 9,819 9,028 8,808
Capital Outlay & Financing Costs (20,053) (53) (53) (53) (53) Grant Income - - - - -
Total Non-Operating Revenue (Expense) (7,136) 13,808 9,817 9,026 8,807 Change in Net Position/Available for Reserves 112,582 40,807 (9,435) (2,604) 27,260 Begin, Net Position 324,536 463,208 493,784 454,236 443,240 Adjustment for Program Expenditure and Building Fund2
26,091 (10,231) (30,113) (8,392) (52)
End, Net Position $ 463,208 $ 493,784 $ 454,236 $ 443,240 $ 470,448
Days Cash On Hand (DCOH) at Year End $ 435,187 $ 465,763 $ 426,215 $ 415,219 $ 442,427 Days of cash on hand 367 369 301 290 323
Each year the Board transfers funds from the Operating Budget to the Decarboniztion Programs Fund as shown in the above forecast under line item Transfers to Programs Fund. The line item Adjustment for Program Expenditure accounts for the difference between forecasted spend for programs versus the amount transfered to the fund. This adjustment is needed because program spending to date has been less than the amount transferred to the programs fund. The $20 million in building Fund is assumed to be spent in FY25-26.
Assumptions: 4% overall discount relative to comparable PG&E rates for FY 23-24, FY 24-25 and FY 25-26. FY 23-24 includes additional bill credit to low income customers totaling $4.3 million. 1% discount for FY26-27 and FY27-28.
Item 4
PRESENTATION
5-Year Forecast
For forecast years FY23-24 onward:
Revenues are based on SVCE’s load
forecast and CaICCA NewGen Model
for SVCE margin analysis using
market data as of 2/10/2024
The NewGen Model headroom output
was reduced by -5% to account for
the modeling error
Power Supply Costs are based on
updated portfolio positions and latest
market data
Operating Expenses are assumed to
grow 5% / year
12 •
•
•
•
•
Item 4
PRESENTATION
Relative to Assumptions
in the December
Adjusted Budget:
PG&E’s average
2024 generation rate
increased by about
5%
PCIA increased from
0.55d:/kWh to
I.OU/kWh
Relative to Adjusted
Budget, SVCE’s 2024
margin improved by
about 2%
The rate changes were
effective Jan 1, 2024.
Adjusted Budget 2024 Rate Current 2024 Rate
Jul-Dec 2024 Jul-Dec 2024
Rate*** Rate***
13 Final PG&E Rate Improved SVCE Margins
‘ Source: PG&E 2024 ERRA Forecast Update, released in October,2023 (Weighted for SVCE Portfolio Load) ** PG&E Jan-Jun 2024 Average Rate, effective January 1, 2024 (Weighted for SVCE Portfolio Load) *** Estimated rate, based on PG&E filings.
Above margin analyses ignores minor reductions for franchise fees (0.09 cf/kWh) Jan-Jun 2024
Rate**
PG&E Gen Rate:
Jan-Jun 2024
Rate
• Power Supply Variance
•
•
•
•
•
•
•
Item 4
PRESENTATION
Energy Prices are Extremely Volatile
(expanded slide in appendix)
ATC NP15 Historical and Simulated Monthly Prices
Sep-23 Sep-24 Sep-25 Sep-26
Current Curves 2/10/2023 Budget Curves 11/10/2023
Budget Curves 7/7/2023 Budget Curves 7/7/2023 Pl
Cost of load decreased with falling prices, and
reduced sales volume
Energy supply costs increase due to new ISTs
Renewable Energy Supplies: Settled PPA
volumes differ slightly from forecast
CAISO Costs: Settled costs include accrued
expenses from summer months and energy
buy-backs, exceeding ISO charge forecast
Environmental Products: Decreased VAMO
forecast; product flows vary monthly.
Resource Adequacy: Update to RA price
assumptions surrounding the BESS fleet
Revenue from Supplies: MTM of fixed-price
contracts fall as energy prices fall
Cumulative Delta to Budget Over/(Under) ThroughSeptember 30,2024($MM) (80.0)
Decrease of $33.9M since budget 14
$72.81 $74.41
$60.21 $70.39
Item 4
PRESENTATION
Power Market Price Volatility
Prices as of the mid-year budget run 2/10/2024 are decreasing from adjusted budget assumptions from 11/10/2023, with a 5-year average decrease of 7%.
NP15 ATC $/MWh FY2024 FY2025
Adjusted Budget
11/2023
MY Budget
2/2024
15 $72.81 $74.41
$60.21 $70.39
Item 4
PRESENTATION
$/MWh
Price
Power Market Price Volatility
Prices as of the mid-year budget run 2/10/2024 are decreasing from adjusted budget assumptions from 11/10/2023, with a 5-year average decrease of 7% Current Curves 2/10/2023
Budget Curves 7/7/2023
-Budget Curves 11/10/2023
Budget Curves 7/7/2023 Pl 16
•
•
•
•
•
•
•
Item 4
PRESENTATION
5-Year Forecast -Shifts in Power Supply Cost
FY Differences:
Energy costs continue to remain mostly flat due to fixed Power Purchase Agreements (PPA) coming online and forward energy prices staying flat FY2025-2026:
Environmental Products: Increase in Carbon Free (CF) costs ($8-'u$25/MWh) with increase in net open position (NOP)
Resource Adequacy (RA): Increase in RA NOP with high market prices FY 2027-2028:
Environmental products prices beginning to fall; increased PPA volumes increases RPS volumes and decreases CF volume needs
Resource Adequacy: Increase in RA NOP with High market prices 17 Item 4
PRESENTATION
Energy Risk Management Min/Max Bands
We hedge to manage market price risk. 95% of balance of Fiscal Year 24 load is hedged; 89% of balance of Calendar Year 24 is hedged.
Period Year ERM Min
Tolerance
ERM Max
Tolerance
SVCE Total
Hedge %
Balance of
Year 2024 80% 110% 89%
Year 2 -
2025 2025 70% 90% 71%
Year 3 -
2026 2026 55% 80% 62%
Year 4 -
2027 2027 50% 80% 69%
Year 5 -
2028 2028 50% 80% 73%
Net Open Position Tolerance and Positions
140%
120%
100%
40%
20%
DM
2024 Q2 2024 2025 2026 2027 2028
Bass Tolerance Range — Cemtraded
18 •
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Item 4
PRESENTATION
Operating Expenses
FY Budget
Updated
Costs
Data Management (Calpine)
$3.4MM
Billing (PG&E)
$1.5MM
G&A / Lease
$2.6MM
Staffing
$15.4MM
Professional Services
$8MM
Communications / Noticing
$1.3MM
MY Budget Changes
Unchanged
Unchanged
Slight increase of $25k for additional
membership fees
Decreased by $588k due to
Oct’23-Dec’23 vacancies savings of $1M
Additional 4 FTE expense offsetting
savings by -$412k
Increased by $126kfor additional professional
consulting services
Increased by $194kfor additional program
marketing materials and increased postage
19 • Subtitle
New SV Clean Energy
PowerPoint Template
Item 5
PRESENTATION
SILICON VALLEY
CLEAN ENERGY
Allocating Funding for
Decarbonization Programs
Board of Directors Meeting
March 13th, 2024
•
•
•
Item 5
PRESENTATION
Objective - seeking Board approval
on ~$34M recently
added to Programs Fund:
FY24 annual (~$9M)
December 2023
adjustment ($20M)
Existing, unallocated
program funds (~$5M)
SILICON VALLEY
CLEAN ENERGY
Ongoing
Oct-Dec
2023
Oct 2023 -
Today
Feb
2024
Mar 2024,
onwards
SVCE staff launching, revising programs
Board sets aside additional funding
SVCE staff review portfolio, feedback to date,
and align on new program concepts
Executive Committee feedback on allocations
Board approval; staff complete designs,
additional stakeholder input, and launch
programs
2 Item 5
PRESENTATION
Programs help build the support ecosystem to help policy succeed CD Recap: transforming the market, at scale
Incentives and lower
up-front costs
Awareness and
acceptance
Quality and available
equipment
Efficient processes
Available workforce
INDUCTION
COOKING
HEAT PUMP
HEATING AND
COOLING HEAT PUMP
WATER HEATER
3 •
•
•
•
•
•
Item 5
PRESENTATION
Recap: existing SVCE efforts
By end of FY23, have
20+ active programs with
"20% of funds spent and
another "65% “live” or
contracted
Have identified some
gaps and new tactics to
add
Case study -FutureFit Homes incentives
Rapidly increased uptake
Gathering cost data and supporting projects
BUT seeing limited pool of participant types
New areas:
Mechanism for those who are very busy -“turnkey”
Reach renters and low-income in single family homes
How can aggregating projects lower costs?
SILICON VALLEY
CLEAN ENERGY 4
Item 5
PRESENTATION
Team reviewed current portfolio, feedback/needs, stakeholder/customer interests Process recap: staff review
Residential Vehicles Commercial
Vehicles
Itlt
Gas in Residential
Buildings
Gas in Non-Residential
Buildings
Cross-Cutting (e.g.
load flexibility)
|[° 0 °|| Affordability
Awareness
Product Availability
Ease
Workforce
Looked at budget, objectives, direct impact, state of market today, size of market, SVCE priorities, review of program data and customer input 5 Item 5
PRESENTATION
Program summary
Planned allocations out of the $33.55M
Category Allocation
Bigger,
Expanded single family home electrification
(renters, lower costs) +$16.00M
u
liny
'p
Customer awareness
(experiential and marketing) +$11.50M
E-mobility incentives +S2.00M
Smaller,
Testing C&l projects +S2.00M
and
Pilotinn Workforce +$1.30M
Other +$0.75M
*— $33.55M
★Note "70%
going towards
Single Family
Install and
Decarb Grants
6 Item 5
PRESENTATION
Program summary
Planned allocations out of the $33.55M
Category Allocation
Bigger,
Scaling
Up
Expanded single family home electrification
(renters, lower costs) +$16.00M
Customer awareness
(experiential and marketing) +$11.50M
Smaller,
Testing
E-mobility incentives +$2.00M
C&l projects +S2.00M
and
Piloting Workforce +$1.30M
Other +$0.75M
Program
Single Family Installation*
Neighborhood Electrification
Portable Heat Pumps
Community Decarbonization Grants*
eHub
Programs Marketing Fund
Targeted EV Rebates and Education
E-Bikes
C&l Technical Support and Incentives
Workforce Development Partnerships
Virtual Power Plant
EM&V
$33.55M
*Note "70%
going towards
Single Family
Install and
Decarb Grants
7 •
•
•
•
Item 5
PRESENTATION
Expanded single family customer participation
in home electrification
Objectives
Easy participation pathways
Reach single family low-income
Reach renters
Aggregate projects to lower costs
Impacts
600 homes electrified (250 low income)
650 emergency water heaters
Neighborhood-level: 20+ homes
electrified, learn how this can scale
100 portable heat pumps installed
Bigger,
Scaling
Up
Program Element Planned
Allocation
No-cost install for low-income
“Turnkey” install, with co-payment +$14.OOM
Emergency water heater replacement
Neighborhood-scale electrification +$1.50M
Portable heat pumps +$0.50M
TOTAL +$16.00M
Programs expected to run 2024-2027
•
•
•
Item 5
PRESENTATION
Customer awareness (experiential and
marketing)
Objectives
Increase use of eHub services
Increase enrollment in programs
Assist member agencies on local
efforts to decarbonize their
communities
Impacts
Grants for all agencies, plus competitive
grants for decarb projects or programs
that promote customer awareness/action
1.5M email opens and 350K unique web
visits
Drive uptake in programs through
increased marketing
Program Element Planned
Allocation
Community Engagement Grants
-Community-specific projects or
programs
-Focus on engaging customers
-Open to member agencies and
other local organizations
+$10.OOM
eHub +$1.00M
Programs Marketing Fund +$0.50M
TOTAL +$11.50M
Programs expected to run 2024-2027
•
•
Item 5
PRESENTATION
E-mobility incentives
Objectives
Increase EV adoption (particularly
multifamily and low-to-moderate-income customers)
Build community awareness of EV
incentives and benefits
Impacts
450 EVs to targeted customers
10 events to build EV awareness
450 E-bikes for income-qualified
customers
Program Element Planned
Allocation
Targeted EV Rebates and Education +$1.50M
E-Bikes +$0.50M
TOTAL +$2.00M
Programs expected to run 2024-2026 10
•
•
•
Item 5
PRESENTATION
C&l projects
Objectives
Support innovative electrification of
large commercial and industrial (C&l)
Pilot approaches in nascent market
Provide additional value to non-res
customers
Impacts
Upgrade C&l equipment to electric at
several customer sites (depends on
project size)
Drive electric, therm, cost, and GHG
savings for customers
Program expected to run 2024-2026
Program Element Planned
Allocation
C&l Technical Support and Incentives +$2.00M
11 •
•
•
Item 5
PRESENTATION
Workforce
Objectives
Prepare workforce in SVCE territory
to electrify buildings at scale
Enhance existing regional
electrification workforce efforts
Invest in local workforce initiatives
Impacts
Engage with diverse set of contractors;
connect to customers and programs
Support workforce development
organizations
Training/education/analysis
Details TBD
Program expected to run 2024-2025
Program Element Planned
Allocation
Workforce Development Partnerships +$1.30M
12 •
•
Item 5
PRESENTATION
Other
Objectives
Advance SVCE’s load flexibility
capabilities to prepare for increasing
load due to electrification and real¬
time pricing rates
Third-party evaluation of program
impacts
Impacts
Prepare to scale up load flexibility efforts
and automate customer response to real¬
time pricing rates
Just the beginning of SVCE investment in
load flexibility, to create systems and
begin testing
Details TBD - solicitation upcoming
Programs expected to run 2024-2027
Program Element Planned
Allocation
Virtual Power Plant +$0.50M
EM&V +$0.25M
TOTAL +$0.75M
13 Item 5
PRESENTATION
Recap: program summary
Planned allocations out of the $33.55M
Bigger,
Scaling
Up
Smaller,
Testing
and
Piloting
Category Allocation Program
Expanded single family home electrification
— (renters, lower costs)
Single Family Installation*
+$16.00M Neighborhood Electrification
Portable Heat Pumps
Customer awareness
(experiential and marketing) +$11.50M
Community Decarbonization Grants*
eHub
Programs Marketing Fund
$33.55M
E-mobility incentives +$2.00M
E-Bikes
Targeted EV Rebates and Education
*Note ^70%
going towards
C&l projects +S2.00M C&l Technical Support and Incentives Single Family
Install and
Workforce +$1.30M Workforce Development Partnerships
Decarb Grants
Other +$0.75M
Virtual Power Plant
EM&V -J 14
•
•
•
•
•
Item 5
PRESENTATION
CD Plan for additional stakeholder input
Staff will refine
concepts through
additional input
Building on input
already received
and observed needs
Case study - Multifamily Direct Install program
Preliminary design completed based on known needs
Experienced vendor selected
Gathering more input
Held a focus group with affordable housing managers
Working to do the same with tenants rights groups, others Feedback loops built into program; plan to pivot
15 •
•
•
Item 5
PRESENTATION
Objective - seeking Board approval
Asking for input on
staff’s intended
program funding
assignment
Future contracts for
this work will still come
to Board for approval
if >$100k
Already shared with Executive Committee
for feedback
Staff will complete designs of programs and
launch
Continue to provide periodic updates on
program statuses and final design decisions
SILICON VALLEY
CLEAN ENERGY 16
Item 5
PRESENTATION
Discussion
17 Item 5
PRESENTATION
Appendix
18 Item 5
PRESENTATION
DETAIL: Expanded single family customer
participation in home electrification (+$16M)
Program Element Details Planned
Allocation
No-cost install for low-income Offer no-cost complete home electrification to income-qualified customers using SVCE-selected contractor. Complementary to upcoming multifamily no-cost offer.
“Turnkey” install, with co-payment Provide a simple pathway for residents who want to electrify but don’t have time or knowledge. They still pay for the project themselves, after the SVCE rebates, and use the SVCE-selected contractor.
+$14M
Emergency water heater replacement Quick-response installer to help in emergency failures. Provide a temporary water heater if wiring upgrade work is needed for a permanent electric solution.
Neighborhood-scale electrification Aggregating projects in an area may lead to lower total costs.
Testing whether entire neighborhoods are willing to electrify at once is essential to future “gas system pruning” and scaling cost-effectively. +$1.5M
Portable heat pumps For renters and properties that aren’t good fits for more permanent heat pump solutions, these window unit heat pumps can provide electrification benefits.
+$0.5M
19 Item 5
PRESENTATION
Cm DETAIL: Customer awareness (experiential and
marketing) (+$11.5M)
Program Element Details Planned
Allocation
Community Decarbonization Grants Provide grants to enable localized, community-specific decarbonization efforts that demonstrate electrification, provide decarbonization benefits to the community, and/or increase community resilience. Focus on building customer awareness through local programs, installations, or demonstrations. Will open competitive portion of grants to other community
organizations.
+$10M
eHub Components of the SVCE website that help customers on their electrification journey. Presently includes Solar/Battery Assistant, Appliance Assistant, and EV Assistant. Solicitation is ongoing to determine vendors for the second version.
+$1M
Programs Marketing Fund Separate funding to focus on marketing efforts to increase program enrollments. Covers email, social media, tabling, events, and other marketing channels.
+$0.5M
20 Item 5
PRESENTATION
DETAIL: E-mobility incentives (+$2M)
Program Element Details Planned
Allocation
Targeted EV Rebates and Education The EV education programming may consist of: Community Ride & Drive events where they are
not already happening, and/or incentivizing short¬
term EV rentals for customers to test drive EVs
and see how they integrate into their
lifestyle. There would also be EV incentives for
income qualified customers.
+$1.5M
E-Bikes Point of sale and post-purchase e-bike incentive that is income qualified. +$0.5M
21 Item 5
PRESENTATION
(f) DETAIL: C&l projects (+$2M)
Program Element Details Planned
Allocation
C&l Technical Support and Incentives Support energy and sustainability goals of C&l customers while strengthening customer
relationships with SVCE. Facilitate the completion
of energy efficiency and carbon emissions
reduction projects, particularly upgrading to
electric equipment.
+$2M
22 Item 5
PRESENTATION
(f) DETAIL: Workforce (+$1.3M)
Program Element Details Planned
Allocation
Workforce Development Partnerships Prepare workforce in SVCE territory to electrify buildings at scale. Identify opportunities to
supercharge regional electrification workforce
efforts. Invest in local workforce initiatives. Could
include regional supplier diversity training,
apprenticeship scholarships, or support for
existing pipeline initiatives to widen early career
training.
+$1.3M
23 Item 5
PRESENTATION
(f) DETAIL: Other (+$0.75M)
Program Element Details Planned
Allocation
Virtual Power Plant Recruit, enroll, and encourage participation from customers in a demand flexibility service by
providing bill savings or incentives for customers
to earn, and minimal to no disruption in customer
convenience and comfort.
+$0.5M
EM&V Post-closing or mid-program evaluation and
measurement of a program’s impact, successes,
and challenges. Third-party validation of programs.
+$0.25M
24 $-
$20,000,000
$40,000,000
$60,000,000
$80,000,000
$100,000,000
$120,000,000
FY18 FY19 FY20 FY21 FY22 FY23 FY24
$ Fund Size $ Spent
Item 5
PRESENTATION
Fund Allocation
Programs Fund Allocation FY24 Summary
Future / Still Planning ($36M)
(Proposed allocation for new
programs comes from here)
Planned to Go Live in
Coming ~4 Months ($23M)
Live I Available Now to
Customers ($31M)
Customer-Reserved
Incentives ($10M)
Spent ($16M)
(partial
year)
25 Item 5
PRESENTATION
Recap: SVCE territory emissions decreased from 4 million MT CO2e in 2015 to 3.1 million MT CO2e in 2022
Source: SVCE 2022 GHG Inventory
Residential Buildings Natural Gas Residential
17% Buildings Electricity
Off-Road, Not Non-Residential
Non-Residential
Residential Vehicle
Gasoline
36%
Commercial
Vehicles Gasoline & Diesel
2022
Buildings Natural Gas
20%
Buildings Electricity
8%
Specified (CARB)
11%
7%
26 1
• Subtitle
New SV Clean Energy
PowerPoint Template
Single-family Home
Installation Program
Board of Directors Meeting
March 13th, 2024
Item 6
PRESENTATION
|
SILICON VALLEY
2 Today's action – approve consultant agreement
Approve 3-year contract with Franklin Energy for not-to-exceed amount of $14M To deploy the Single-family Home Installation Program:
• No-cost installation for low-income customers
• Turnkey installation for market-rate customers
• Emergency water heater loaner and upgrade
Item 6
PRESENTATION
3 Recap: SVCE portfolio of programs
This program is focused on the residential buildings sector Residential
Vehicles
Commercial
Vehicles
Gas in
Residential
Buildings
Gas in Non-Residential
Buildings
Cross-Cutting
(e.g. load
flexibility)
Affordability
Awareness Ease
Workforce
Product Availability
Item 6
PRESENTATION
4 Existing programs may help early adopters, but deeper assistance is needed to reach more single-family homes
eHub
Active
Online resource center for customers to
learn about electrification.
Go Electric Advisor
Active
One-on-one assistance for residential
customers via phone or web.
FutureFit Homes
Active
Electrification incentives for single-family
and small multifamily properties
Single-family Installation
Coming Q3 2024
Electrification installation services provided
by a SVCE contractor.
Our programs address different customer needs and barriers Inspire Educate Act
Item 6
PRESENTATION
5 Single-family Home Installation Program
Target Market
Existing single-family properties (≤ 4 units)
3-year Budget
$14M
Goals
• Fully electrify 600 households, including 250 low-income households • Provide emergency replacements for 650 old water heater failures Program Elements
• No-cost installation for low-income customers
• Turnkey installation with cost-share contribution for market-rate customers
• Emergency water heater loaner and upgrade
Collaboration
Alignment with similar Peninsula Clean Energy will provide regional consistency and administrative cost-savings
No or low-cost
upgrades
Program
contractor
Rebate
assistance
Quality
equipment
*
Item 6
PRESENTATION
6 A well-rounded team to deliver comprehensive
services to customers
Includes local, experienced contractors who are paid prevailing wage Project management and incentive support
Subconsultants
Energy and bill
impact modeling
Local contractor Local contractor Local contractor
Item 6
PRESENTATION
^FRANKLIN ENERGY™
XeroHome™
FUSE SERVICE
J WB "VAC•ELECTRICAL
REFRIGERATION •PLUMBING
ELECTRIFY
MY HOME
7 An opportunity to support customers,
workforce, and future program possibilities
Excerpted program details
Eligible equipment/technology types*
Things we will learn
• Does a dedicated contractor improve customer satisfaction with the process? • What efficiencies can we gain by providing standardized services? • How does an emergency service increase conversions from gas to heat pump water heaters? Other Possibilities
• Enroll more customers in E-ELEC
• Install "smart" devices for future use cases (demand response, real-time pricing, virtual power plant) Electrification Load management Health & safety
• Heat pump water heater
• Heat pump HVAC
• Induction
• Electric washer & dryer
• 120V technologies
• Smart panels
• Circuit sharing and throttling
devices
• Pest, asbestos, and mold
remediation
• Remove knob & tube wiring
• Air quality
*This eligible equipment list is not exhaustive and only highlights some technologies.
Item 6
PRESENTATION
8 Program launch
for turnkey
installation
Aug ‘23 – Feb '24 Mar '24 Apr – Jul '24 Winter '24
Program design
Program launch
for low-income
customers and
emergency water
heater services
SVCE BOD
approval of
contract
Contract
executed
Nov '20 - Ongoing
PCE RFP
released
Consultant
selection
Contract
negotiations
PCE BOD
approval of
contract
Timeline and next steps
Jun ‘23 – Aug ‘23
BOD approves
expanded
electrification
incentives
FutureFit Homes
launches and
continues
adjustments
SFI program
scoping
Item 6
PRESENTATION
9 Authorize the Chief Executive Officer (CEO) to execute agreement with Franklin Energy Services, LLC with non-substantive changes approved by the CEO and subject to final review and approval by General Counsel. The agreement is for program design and implementation support services of a single-family residential installation program for a period of three years and a not-to-exceed amount of $14 million.
Today's action – approve consultant agreement
Item 6
PRESENTATION
10 • Subtitle
New SV Clean Energy
PowerPoint Template
Appendix
Item 6
PRESENTATION
|
SILICON VALLEY
11 Project Payment Approach
Fixed measure costs include prevailing wage labor, materials, and 1-year warranty on parts & labor SVCE
negotiates
fixed cost
per
measure
Franklin
performs
energy
assessment
If customer
approves
project scope,
work order
sent to
contractors
Low-income
Customers
No customer
payment
Market-rate
Customers
Customer pays
cost-share
(measure costs
less incentives)
Review &
renegotiate
annual costs
> 5% annual
increase
requires further
documentation
& approval
Franklin
invoices
SVCE
monthly
Franklin pays
Contractor
& applies for
third-party
rebates
Item 6
PRESENTATION