New SV Clean Energy
PowerPoint Template
Subtitle
Item 3
PRESENTATION
Item 3
Purpose
PRESENTATION
Adopt Fiscal Year FY2024-25 Operating
Budget, Staff Benefits Upgrades, and
Revised Reserves Policy.
Main Areas of Discussion
1. Recap of Budget Process and
Timeline
2. Recap of Key Messages
3. Recommended Budget
Item 3
PRESENTATION
FY24-25 Budget Development Timeline
May 13 June 12 August 6 August 14
September 11 November (tbd)
Present the draft
budget to the BOD
Discuss the high-level
budget framework with
the Finance and Admin
Committee
Review the draft
budget with the
Finance & Admin
Committee
Discuss the high-level
budget framework with
the BOD
December 11 February (tbd) March 12, 2025
Present the
recommended budget
to the BOD for approval
Review adjustments to the
budget to reflect updates
to PCIA and PG&E gen
rate assumptions with the
Finance and Admin
Present the Review the mid¬ Present the mid¬
adjusted budget year budget with
to the BOD for the Finance and
approval Admin Committee
year budget to the
BOD for approval
Committee 3
1. Positive financial year with upside for a very
favorable year; results highly uncertain
• Forecast year-over-year (YOY) revenues decrease
~$112 million
• Results highly dependent on CPUC’s adoption of Market Price Benchmarks (MPBs) in the fall
• Staff estimates for MPB updates indicate results could improve by about $145 million if CPUC’s prices align with staff estimates • Modest increase in Power Supply Costs of about 6%
• Increase driven by higher cost of clean resources, RA products, and higher load partially offset by lower energy forward prices. • Contribution to reserves remains positive at $14 million
2. Customer Discount
Continue 4% discount with an additional 1% directed to
low-income customers as bill credits
• Revisit in December once there’s more certainty on
PG&E rates
3. Other Changes
• Adjustment of employee compensation for the cost of
living and merit (~6%)
• Staff benefits update now includes a floating holiday • Target reserves increase from 300 to 350 days of cash on hand (DCOH) and upper target from 490 to 500
DCOH
Item 3
PRESENTATION
® Key Highlights of the Draft Budget
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SILICON VALLEY CLEAN ENERGY
FY 2024-25 OPERATING BUDGET
($ in thousands)
FY 2023-24 FY 2024-25
MID-YEAR
ADJUSTED PROPOSED
DESCRIPTION BUDGET BUDGET $ %
Energy Revenues 552,864 441,050 (111,814) -20.2%
Power Supply Expense 365,617 387,145 21,528 5.9%
Operating Margin 187,247 53,905 (133,342) -71.2%
Operating Expenses 32,116 36,433 4,318 13.4%
Non-Operating Revenue (Expense) 12,864 16,275 3,411 26.5% Annual Transfers and Other Expenses
Capital Outlay 50 1,002 952 1904.0%
Building Fund 20,000 (20,000)
Program Fund 28,874 8,821 (20,053) -69.5%
Nuclear Allocation 2,188 3,708 1,520 69.5%
Customer Bill Relief 4,300 4,411 111 2.6%
Hanford Emissions Mitigation Fund 1,800 1,800
BALANCE AVAILABLE FOR RESERVES 112,584 14,005 (98,579) -87.6% Change
Item 3
PRESENTATION
Recommended FY 25 vs. FY 24 Mid-Year Adjusted Budget
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Summary -Positive Year But
Results are Highly Uncertain
Biggest risks include late-year adjustments to PCIA
/ PG&E Gen Rate and significant price volatility for
RA and clean energy resources
Keep the current customer discount rate of 4% and
an additional 1% towards bill credits for low-income
customers
Revisit once there’s more certainty on PG&E and
PCIA rates
Delay decisions on additional expenditures
In the near term, pursue office building leasing
options and revisit purchasing the building around
2028
Many Risks can Deplete Reserves
Market Prices
Reduced Revenues
via Higher PCIA and
Lower PG&E Rates;
IncreasedPower
Supply Expense
SUPPLY
Project delays;
PPAs Default or
Renegotiate for
Higher Pnces
L&R ISSUES
IRP. RPS. RA
Reform/Penalties,
PCIA, POLR
PAYMENTS LOAD LOSS CYBER-RISK
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
6 Adopt resolution 2024-13 approving the fiscal year (FY) 2024-25 Recommended Operating Budget (“Recommended Budget”), which includes at a high level the following:
1. Projects depositing $14.0 million into the reserves;
2. Updates SVCE’s staff benefits;
3. Maintains a four percent (4%) discount to PG&E’s rates; and
4. Updates the Reserve Policy increasing the Target for Days Cash on Hand (DCOH) from 300 to 350 and the Maximum DCOH from 490 to 500.
Item 3
PRESENTATION
Board Approval
7 Item 3
PRESENTATION
Thank you! / Questions?
8 Item 3
PRESENTATION
0 SVCE Planning & Budgeting Process
Budget
Comprehensive assessment of risks and
opportunities to optimally achieve mission
SVCE Mission: Reduce dependence on fossil fuels by
providing carbon-free, affordable, and reliable electricity and innovative programs for the SVCE community.
Funding in alignment with achieving
the strategic focus areas
Organization-wide priorities and
alignment toward achieving the mission
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Item 3
PRESENTATION
PG&E has reduced gen
rates for the 2nd half of
2024 (effective July 1st,
2024)
PG&E Gen Rate
decreased -11.3% vs first
half of 2024
PCIA was slightly
increased in March from
1.01 c/kWh to 1.05 C/kWh
SVCE margin decreased
"12%
PG&E proposed to use last
year’s RA MPBs for setting
2025 rates
Current market prices for RA
and RPS are significantly
above last year’s MPB levels
Using last year’s MPBs,
SVCE margin dropped -28%
Y-o-Y
Current 2024 Rate Projected 2025 Rate
Last Year RA/RPS*
Jul-Dec 2024
Rate***
PG&E Gen Rate:
Blended Jan-Dec Jan-Dec 2025 Rate*
2024 Rate
Jan-Jun 2024
Rate**
PG&E Gen Rate:
16.99 c/kWh
* Source: CaICCA NewGen Model analysis using market data as of 6/28/2024 and CPUC attribute benchmarks adopted for CY 2024 (Weighted for SVCE Portfolio Load) " PG&E Jan-Jun 2024 Average Rate, effective January 1, 2024 (Weighted for SVCE Portfolio Load) *** PG&E Jul-Dec 2024 Average Rate, effective July 1, 2024 (Weighted for SVCE Portfolio Load) Above margin analyses ignores minor reductions for franchise fees (0.09 <t/kWh) 10 Margins Highly Uncertain
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PRESENTATION
Current market prices for RA
and RPS are significantly
above last year’s MPB levels.
Staff’s estimate of 2025
forecast RPS MPB is ~95%
higher than 2024 MPB
Staff’s estimate for 2025
system RA MPB is "120%
above 2024 MPB
CPUC uses a historical
volume-weighted average of
all IOU, CCA, and ESP market
transactions executed in a
specific time frame to set next
year’s MPBs.
Current 2024 Rate** Projected 2025 Rate -
Last Year RA/RPS*
Projected 2025 Rate -
Estimated CPUC RA/RPS
MPBs***
Blended Jan-Dec
2024 Rate
Jan-Dec 2025 Rate* Jan-Dec 2025 Rate
•G&E Gen Rate:
PG&E Gen Rate:
16.00 c/kWh
4% SVCE discount
16.69 <r/kWh
PCIA 0.06 <t/kWh
>G&E Gen Rate:
13.76 <t/kWh
4% SVCE discount
4% SVCE discount
* Source: CaICCA NewGen Model analysis using market data as of 6/28/2024 and CPUC MPBs (Market Price Benchmark) adopted for CY 2024 (Weighted for SVCE Portfolio Load) " Blended PG&E Jan-Jun 2024 & Jul-Dec 2024 Average Rate (Weighted for SVCE Portfolio Load) CaICCA NewGen Model analysis using market data as of 6/28/2024 and estimated CPUC MPBs for CY 2025 (Weighted for SVCE Portfolio Load) Above margin analyses ignores minor reductions for franchise fees (0.09 <t/kWh) Item 3
PRESENTATION
Power Supply Costs
FY 2025 Cumulative Delta to FY2024 Mid-Year-Budget Over/(Under) Through September 30,2025 ($MM) $450.00
Increase Decrease Total FY 2024-25 Costs, forecasted at $387M, are estimated to be ^$22M higher than FY23-24
at Mid-Year Budget
This is primarily driven by increased
costs for clean resources and RA
products and a projected increase in
customer load of 1.6%, partially offset by
lower forward energy market prices.
12 Item 3
PRESENTATION
1 Operating Expenses and Transfers
Sources of Operating Expense, Capital Outlay, and Transfer Amount Changes Operating Expenses Change (000s)* Implications/Reasons
Personnel Costs*
Staffing
Annualized Positions
COLA
Merit
$2,570
$0
$1,845
$363
$363
0 additional FTE positions
Vacancy Savings from MY budget; Promotions/Position Upgrades 3% COLA
3% budgeted for merit increases (avg)
Other Expenses $1,745 Add’l Data Management, PG&E fees, Marketing, G&A, and Professional Services ★Amounts include 5% operating expense contingency
Capital Outlay Amount (000s) Implications/Reasons
Office Building Expenses $1,002 Estimated renovation and furniture cost for new office space, in preparation for potential office move when current office lease ends in Oct’25.
Transfers Amount (000s) Implications/Reasons
Programs Transfer $8,821 2% of projected revenues
Nuclear Allocation $3,708 2023 PG&E Carbon Free Allocation Customer Bill Credit $4,411 1% of projected revenues
Hanford Emissions Mitigation Fund $1,800 Jun’24 BOD approved new program fund 13 •
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Staff Recommendation:
Round upper target to 500
1 Review Reserve Targets
Upper Reserve Target stays above 90
DCOH over the next 5 fiscal years
Set reserve targets such that if the
stress scenario were to occur:
Ensure SVCE maintains sufficient
reserves to manage risks such as
those modeled in the Stress Test
analysis.
Target threshold stays above 120 Days
Cash On Hand (DCOH) for the next two
fiscal years
Higher implied targets are driven by conservative RA
and RPS price assumptions
Stress test analysis was updated to reflect power
portfolio positions and assumptions consistent with
those used to develop the proposed budget as well
for corrections for some modeling errors.
Increase target reserves to 350
Considerable market price uncertainty, especially for
Resource Adequacy (RA) and clean energy resources
Aligns with credit rating agency’s guidance that
DCOH in excess of 300 is credit positive
Reserve Targets (DCOH) Current Implied
Targets
Proposed
Minimum 120 120 120
Goal (Target) 300 342 350
Maximum (Upper Target) 490 713 500
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0 100
200
300
400
500
600
700
800
900
1,000
FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 $ in Millions Total Adjusted Ending Reserves Target Reserves Max Reserves Min Reserves 547 Days
of Cash
on Hand
365 Days
of Cash
on Hand
350 Days
120 Days
500 Days
Reserves Forecast
Item 3
PRESENTATION
O Reserve Projection
Projected End of FY Reserves:
$442 Million
365 Days of Cash on Hand
Includes Unspent Program
Funds and Building Fund
If all Approved Programs Dollars
and Building Fund were Spent:
$346 Million in Reserves
285 Days of Cash on Hand
Reserve Projection shown with updated proposed FY24-25 reserve targets 15 •
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Item 3
PRESENTATION
SVCE New Office Space Update
At the June 28, 2024, meeting the Executive Committee concurred with the following strategy:
Staff to continue to research office building leasing options, as follows:
3-to-5-year lease term, flexible lease terms
Will explore the option to opt out early
Staff to target office space around 11,000 to 14,000 to accommodate growing staff and Board/Community room Target Sunnyvale, Mountain View, Campbell and Cupertino Allow for reasonable initial capital expenditure cost on renovation and furniture Estimated capital expenditure has been incorporated into FY24-25 proposed budget May need to consider a temporary extension of the current lease to accommodate the new lease agreement Revisit office building purchase options in 2028
Likely to enter an office building purchase agreement in FY28-29 The Board allocated funds for purchasing a building will remain in the Building Fund.
Proposed FY24-25 Budget includes the above considerations Actual lease and terms will be brought to the Board for consideration and approval in a closed session before the end of 2024
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O FY24-25 Proposed Benefit Changes
Add a floating holiday to the Holiday Schedule
A floating holiday would enable employees to observe any day of their choosing, promoting more inclusive celebration Add Cesar Chavez Day to the Holiday Schedule
Majority of CCAs and half of our member agencies provide the holiday With this addition, SVCE holidays will remain competitive but not excessive in comparison Increase Paid Parental Leave to 240 hours from 120 (within the first year for eligible employees) Most CCAs of similar size had much stronger parental leave As our agency and our workforce matures, parental leave is important for retention Increase Bereavement to 5 days (state compliance)
State law requires us to give 5 days (3 must be paid) but almost all mature organizations pay 5 Allow staff to accrue the annual $600 fitness reimbursement up to $3,000 Without adding dollars, allows for larger purchases and potentially better retention over the years Hybrid work reimbursable: $500/one-time home office set up (previously approved during COVID, but not added as ongoing)
With ongoing hybrid/remote work being one of our employees’ favorite benefits, we want to continue to boost comfortability by supporting home office initial setup for new employees as we did for all during COVID 17 ($ in Thousands)
FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29
Operating Revenue (Budget) (Forecast) (Forecast) (Forecast) (Forecast) Electricity Sales, Net1 $438,837 $573,975 $608,968 $558,344 $537,314 GreenPrime Electricity Premium $2,213 $2,234 $2,260 $2,296 $2,340 Total Operating Revenues $441,050 $576,209 $611,228 $560,640 $539,654 Operating Expense
Power Supply $387,145 $436,863 $446,138 $434,784 $436,707 Operating Margin $53,905 $139,345 $165,090 $125,856 $102,947 Data Management $3,734 $3,920 $4,116 $4,322 $4,538
PG&E Service Fees $1,516 $1,592 $1,672 $1,755 $1,843
Salaries and Retirement $17,388 $18,258 $19,171 $20,129 $21,136 Professional Services $9,370 $9,838 $10,330 $10,846 $11,389 Marketing & Promotions $1,617 $1,698 $1,783 $1,872 $1,965 General and Administration $2,808 $3,844 $4,036 $4,238 $4,450 Transfers to Programs Fund $18,740 $11,524 $12,225 $11,213 $10,793 Total Operating Expenses $442,318 $487,538 $499,471 $489,161 $492,822 Operating Income $(1,268) $88,671 $111,757 $71,480 $46,832 Nonoperating Revenue
Investment Income $16,299 $14,651 $15,820 $15,440 $13,182 Total Non-Operating Revenues $16,299 $14,651 $15,820 $15,440 $13,182 Nonoperating Expense
Financing Cost $24 $24 $24 $24 $24
Capital Outlay $1,002 $50 $50 $50 $50
Total Non-Operating Expense $1,026 $74 $74 $74 $74
Non-Operating Income $15,273 $14,577 $15,746 $15,366 $13,108 Change in Net Position/Available for Reserves $14,005 $103,247 $127,503 $86,846 $59,940 Begin, Net Position $473,838 $469,996 $551,765 $658,068 $731,141 Adjustment for Program Expenditure and Building Fund2
$(17,847) $(21,478) $(21,201) $(13,773) $(24,600)
End, Net Position $469,996 $551,765 $658,068 $731,141 $766,481
Days Cash On Hand (DCOH) at Year End $441,975 $523,744 $630,047 $703,119 $738,460 Days of cash on hand 365 392 460 525 547
Each year the Board transfers funds from the Operating Budget to the Decarbonization 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 transferred 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 FY28-29.
Assumptions: 4% overall discount relative to comparable PG&E rates for FY 24-25 and FY 25-26. FY 24-25 includes additional bill credit to low income customers totaling $4.4 million. 1% discount for FY26-27, FY27-28 and FY28-29.
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PRESENTATION
5-Year Forecast
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Item 3
PRESENTATION
PG&E filed its forecast of
2025 Rates on 5/15/24
Two methodologies were
proposed for calculating
ERRA, using existing and
revised common cost
allocations.
PG&E used energy forward
market prices as of March
28, 2024.
PG&E Gen Rate down
"10.1% (A) and 12.8% (B).
PCIA up significantly.
PG&E proposes to cap the
RAMPBs at the 2024 RA
MPB
The projected 2025 Rate,
used in the FY2025
Budget deteriorated
further due to weaker
energy market prices
Current Blended
2024 Rate
Projected 2025
Rate- PG&E
ERRA A
Projected 2025
Rate- PG&E
ERRAB
Projected 2025 Rate -
Last Year RA/RPS
Blended Jan-Dec
2024 Rate*
Jan-Dec 2025
Rate**
Jan-Dec 2025
Rate**
Jan-Dec 2025
Rate***
PG&E Gen Rate:
19 ‘ Source: Blended PG&E Jan-Jun 2024 & Jul-Dec 2024 Average Rate (Weighted for SVCE Portfolio Load) " Estimated rate, based on PG&E ERRA filings (Weighted for SVCE Portfolio Load) *** CaICCA NewGen Model analysis using market data as of 6/28/2024 and CPUC attribute benchmarks adopted for CY 2024 (Weighted for SVCE Portfolio Load) Above margin analyses ignores minor reductions for franchise fees (0.09 <t/kWh) PG&E Gen Rate:
16.00 <r/kWh
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Item 3
PRESENTATION
Power Supply Costs
FY 2025 Cumulative Delta to Mid-Year-Budget Over/(L)nder) ThroughSeptember 30,2025 ($MM) Increase Decrease Total
FY 2024-25 Costs, forecasted at $387M, are
$30M less than forecasted at the mid-year
budget.
Favorable Drivers
Drop in forward prices
More favorably priced PPAs coming
online, resulting in a lower need for
energy supply and environmental
products
Lowered Clean target to 90% per board
directive 6/12/2024
20 Forward Energy Prices (NP15)
2024 2025 2026 2027 2028 2029
6/28 (Budget run)
On-Peak 50.75 64.77 67.00 65.72 62.99 62.12
Off-Peak 47.95 63.78 70.23 72.97 74.48 72.80
ATC (Around-the-Clock) 49.52 64.34 68.42 68.90 68.05 66.81 3/28 (PG&E ERRA run)
On-Peak 56.13 65.73 66.45 64.68 61.75 61.10
Off-Peak 51.24 63.24 71.59 72.85 73.97 70.72
ATC (Around-the-Clock) 53.98 64.64 68.71 68.26 67.14 65.33 ATC Price % change
-8% 0% 0% 1% 1% 2%
45 50
55 60
65 70
75 2024 2025 2026 2027 2028 2029
6/28/2024 (2025 Budget run) 3/28/2024 (PG&E ERRA run)
Item 3
PRESENTATION
Forward Energy Price Comparison
Budget Run (6/28/2024) vs ERRA Forecast Run (3/28/2024) Forward Energy Prices (NP15)
21 Forward Energy Prices (NP15)
2024 2025 2026 2027 2028 2029
6/28/2024 (2025 Budget run)
On-Peak 50.75 64.77 67.00 65.72 62.99 62.12
Off-Peak 47.95 63.78 70.23 72.97 74.48 72.80
ATC (Around-the-Clock) 49.52 64.34 68.42 68.90 68.05 66.81 3/28/2024 (PG&E ERRA run)
On-Peak 56.13 65.73 66.45 64.68 61.75 61.10
Off-Peak 51.24 63.24 71.59 72.85 73.97 70.72
ATC (Around-the-Clock) 53.98 64.64 68.71 68.26 67.14 65.33 2/10/2024 (2024 Mid-Year Budget run)
On-Peak 68.51 72.56 71.33 70.45 64.51 66.47
Off-Peak 59.25 68.00 73.49 74.69 75.88 76.25
ATC (Around-the-Clock) 64.45 70.56 72.28 72.31 69.52 70.77 ATC Price % change
2025 Budget vs ERRA -8% 0% 0% 1% 1% 2%
2025 Budget vs 2024 MY Budget -23% -9% -5% -5% -2% -6%
45 50
55 60
65 70
75 2024 2025 2026 2027 2028 2029
6/28/2024 (2025 Budget run)
3/28/2024 (PG&E ERRA run)
2/10/2024 (2024 Mid-Year Budget run)
Item 3
PRESENTATION
O Forward Energy Price Comparison
2025 Budget Run (6/28/2024) vs ERRA Forecast Run (3/28/2024) vs 2024 Mid-Year Budget Run Forward Energy Prices (NP15)
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3000
3500
4000
4500
5000
5500
6000
2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 GWh
Total Retail Sales Forecast
2022 IEPR 2024 IEPR 2023 OF 2024 OF Actual
Item 3
PRESENTATION
Medium-Term Load Forecast
Since 2023, SVCE began forecasting
load in-house after using a third-party
service since inception.
2024 IEPR is lower than 2022 IEPR
due to lower population forecast.
2024 Operating Forecast (“OF”)
begins to grow slower than 2024 IEPR
from year 2025 due to more realistic
BE forecast.
EVs will drive growth, especially near
term. However, SVCE territory should
lag the state average, since it already
has higher % of Evs.
By 2030 BE begins to play larger role
in growth trajectory due to
widespread heat pump adoption.
“OF” -Operating Forecast 23
Item 3
PRESENTATION
Long-Term Load Forecast by Sector
Share of SVCE Sales by Class
2024 2030 2035 2045
Residential 32% 35% 40% 41% Load Modifiers
Small
Medium
24% 20% 19% 23% Near-term: BTM PV, Long-term: public EV charging Large 37% 35% 32% 28% Economy
Agriculture 1% 1% 1% 1% Held Constant
Lighting 0% 0% 0% 0% Change in Residential Customers, but minimal impact Item 3
PRESENTATION
Gwh
Annual Retail Sales Forecast by Class
500
FY2024 FY2025 FY2026 FY2027 FY2028
Residential Small/Medium Commercial
Large Commercial Agricultural
mmLight Total
25 Medium-Term Load Forecast by Sector
3,000
2,500
2,000
1,500
1,000
5,000
4,500
4,000
3,500
Item 3
PRESENTATION
GWh
Medium-Term Load Forecast
Monthly Retail Sales Forecast ComparedtoHistoricals
450
400
350
300
250
200
150
100
50 0
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
— — -
FY2018
— — — FY2019— — -
FY2020
— -— FY2021
— — — FY2022 FY2023—FY2024
—FY2025 26
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FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 $ in Millions Total Adjusted Ending Reserves Target Reserves Max Reserves Min Reserves 547 Days
of Cash
on Hand
365 Days
of Cash
on Hand
300 Days
120 Days
490 Days
Reserves Forecast
Item 3
PRESENTATION
Reserve Projection (FY23-24 Reserve Targets)
Projected End of FY Reserves:
$442 Million
365 Days of Cash on Hand
Includes Unspent Program
Funds and Building Fund
If all Approved Programs Dollars
and Building Fund were Spent:
$346 Million in Reserves
285 Days of Cash on Hand
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Item 3
PRESENTATION
Staffing-No New Positions To Request in Proposed FY24-25 Budget Current Staffing
62 Authorized FTE
57 filled FTE
5 current vacancies
3 Intern positions
3 Part-time employees
3 Climate Corps Fellows
1 Long-term independent consultant
Personnel Authority
CEO can approve job titles, salary ranges,
and org chart positions
Positions can be swapped/changed and
added within Board-approved budget
Additions will not exceed 10% of
authorized number shown in budget
Changes/hires communicated in next CEO
report to Board
No additional FTE request in Proposed FY24-25 budget
Previous FY FTE Request Summary FTE
Authorized in the FY23-24 Annual Budget 58
Feb’24 CEO Personnel Authority +3
Authorized in the Midyear 23-24 Budget +1
Current Authorized FTE Total 62
28 14
21 25 25 27 27
31 32
38 39
49 49
58 62 62
0 10
20 30
40 50
60 70
0 2
4 6
8 10
12 14
16 18
Sep-17 Jan-18 May-18Sep-18 Jan-19 May-19Sep-19 Jan-20 May-20Sep-20 Jan-21 May-21Sep-21 Jan-22 May-22Sep-22 Jan-23 May-23Sep-23 Jan-24 May-24Sep-24 $MM / FTE
Rev ($MM) / FTE Cost ($MM) / FTE FTEs
Item 3
PRESENTATION
Revenue and Energy Costs / FTE have remained fairly flat over time. 29 CD Revenues/FTE; Energy/FTE
Accounts Revenue
($MM)
Net Position
($MM) FY 22-23 FY 23-24 FY 24-25 Budget Revenue ($MM/FTE) FY23-24 Silicon Valley Clean Energy 280,000 $512.9 $324.5 49 58 62 $8.8 Peninsula Clean Energy 310,000 $431.2 $307.6 39 50 63 $8.6 Central Coast Community Energy 450,000 $461.3 $241.9 43 52 59 $8.9 Clean Power Alliance 1,071,800 $1,169.5 $211.6 69 75 Unavailable $15.6 Ava Community Energy 640,000 $824.0 $361.6 68 78 Unavailable $10.6 MCE 500,550 $644.8 $244.2 76 84 Unavailable $7.7
CCA Comparisons
CCA Name
FY 23-24 Staffing
Data is based on information available and reported online or from peer agency feedback; the timeline for comparisons may not align because each organization has a different budgeting and planning cycle, but they are meant to provide general patterns for comparison.
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O CCA Staffing Comparisons
Item 3
PRESENTATION
Cost-of-Living & Adjustment (COLA) & Merit Increase
Proposals
Current 3.00% COLA based on SF Bay Area CPI; smoothed over trailing months; Additional Merit/promotional increases at CEO discretion Chart 1. Over-the-year percent change in CPI-U, San Francisco-Oakland-Hayward, CA, June 2021-June 2024
Source: U.S. Bureau of Labor Statistics.
Year COLA
FY17-18 3.00%
FY18-19 4.00%
FY19-20 4.00%
FY20-21 0.00%
FY21-22 5.00%
FY22-23 5.30%
FY23-24 4.33%
FY24-25 3.00%
Source: Consumer Price Index, San Francisco Area — U.S. Bureau of Labor Statistics (bls.gov) 31 SVCE PG&E SVCE PG&E SVCE PG&E SVCE PG&E
Rate Schedule (eff. July 1, 2024) E-TOUC E-TOUC B-1 B-1 B-10 B-10 B-19S B-19S Average Usage (kWh/month) 491 491 1,851 1,851 22,540 22,540 148,625 148,625 Annual Peak Demand (kW) 499 499
PG&E Electric Delivery $ 124.84 $ 124.84 $ 482.30 $ 482.30 $ 4,755.94 $ 4,755.94 $ 25,884.53 $ 25,884.53 Electric Generation $ 68.34 $ 77.36 $ 246.10 $ 278.69 $ 3,169.39 $ 3,588.37 $ 19,964.14 $ 22,570.19 PG&E Added Fees (PCIA, Franchise) $ 5.93 $ 21.43 $ 275.44 $ 1,703.24 Average Total Cost $ 199.10 $ 202.20 $ 749.84 $ 760.98 $ 8,200.77 $ 8,344.31 $ 47,551.91 $ 48,454.72 Average Monthly Savings $ 3.09 $ 11.15 $ 143.53 $ 902.81 Residential Small Commercial Medium Commercial Large Commercial Item 3
PRESENTATION
(^) Typical Customer Bill Savings
(Current Rates)
32 Item 3
PRESENTATION
1 CCA Comparison - Reserve Targets
Reserve Targets Min Goal Max
Silicon Valley Clean Energy 120 300 490
Peninsula Clean Energy n/a 180 250
Clean Power Alliance 72 120 144
Ava Community Energy 90 180 270
MCE - 240 -
Sonoma Clean Power 180 280 280
33 Spent,
$22M
Available Now,
$56M
Available
Soon, $26M
Future/Still
Planning, $12M
Programs Fund Availability
Item 3
PRESENTATION
Programs capacity is increasing
$116M allocated over the last
"5 years
~$60M allocated within last 2
years
FY24 program spending on
track to be almost 2x higher
than FY23
Some programs are open
multiple years so may take
time to ramp up spending
SILICON VALLEY
CLEAN ENERGY
Available Now: Open to customers -includes available and reserved customer incentives (e.g. FutureFit Homes), or funds contracted with a vendor (e.g. eHub, fleet electrification support) Available Soon: In a planning phase, but will launch by "December 2024 Future/Still Planning: Won’t launch until after December 2024 and funds not currently earmarked for a program 34 Item 3
PRESENTATION
Health Insurance
2024/2025
Proposed benefits overview
-includes changes noted in
Slide 17, in red.
Benefits
Overview
Employer Premium Contribution SVCE provides up to $1,500 per month to cover the employee and dependent insurance premiums - health, dental and vision.
I Medical Coverage is provided through the QqfOjpiQe marketplace, and currently includes the following options:
Kaiser — HMO plans
Sutter Health — HMO plans 1
Anthem Blue Cross — PPO plans
Cigna -EPO G
Dental Delta Dental PPO
Vision Vision PPO Plan
Retirement
401 (a) Plan Mandatory 1 0% employee contribution matched by 1 0% employer contribution in lieu of Social Security. Fully vested from date of hire. 457 (b) Deferred Compensation Voluntary pre-tax employee contributions up to annual IRS limits.
HRA -or- has
Health Reimbursement Account SVCE contributes $500 / month towards a Health Reimbursement Account that the employee can use for qualified health care expenses. Unused balances can be carried over to the next year.
Health Savings Account
(only with eligible High Deductible
Health Plans)
SVCE contributes up to $400 / month towards a Health Savings Account that the employee can use for qualified health care expenses. Balance can be invested and stays with employee after separation.
FSA— Health / Dependent Care / Transportation / Parking Employer Contribution SVCE contributes $200 / month towards flexible spending accounts that can be used for qualified expenses in the categories below. Employee can contribute additional funds up to the IRS limits.
Health Spending Account Employee can annually contribute up to $3,200 pre-tax to their Health FSA. A maximum of $640 rolls over for 2024.
Dependent (Child / Elder) Care
Assistance
Employee can annually contribute up to $5,000 pre-tax to their Dependent Care account. Funds do no roll over.
Transit / Parking Plan Non-taxable reimbursement of up to $315 per month for qualified transit and parking expenses.
35 Item 3
PRESENTATION
Health / Wellness
(continued)
Employee Rebate Reimbursement 2024/2025
Proposed benefits overview
-includes changes noted in
Slide 17...
Benefits
Overview
Fitness Reimbursement Program SVCE will reimburse up to $600 / year
(class / program / equipment) per yearjlhis reimbursement will accrue| | annually up to $3000. |
Professional Development
Tuition Reimbursement Program SVCE will reimburse up to $5,000 / year for qualified educational
advancement that supports the organization’s mission.
SVCE Employees are eligible to
receive the same rebate benefits as
its customers
SVCE rebates are available for single-family homes, accessory dwelling units (ADUs), and multi-family homes (4 dwelling units or fewer) swapping out existing equipment, not for completely new building construction. Each dwelling unit is eligible for one rebate per appliance type.
Miscellaneous
Short Term Disability Insurance STD provided at 60% of weekly earnings subject to terms of STD insurance carrier and cap based on salary.
Long Term Disability Insurance LTD provided at 60% of monthly earnings subject to terms of LTD insurance carrier and cap based on salary.
Term Life Insurance 1 00% Employer-paid $200,000 life and AD&D coverage (guaranteed at $50,000).
Employee Assistance Program (EAP) 1 00% Employer-paid confidential counseling for you and your immediate family member and work/life services assistance.
Hybrid Work Set up |One time $500 reimbursable for home Technology Stipend $120 monthly stipend for phone and internet connection costs Voluntary Term Life and AD&D Rates |
Voluntary term life monthly rate Voluntary term life rates do not include the AD&D rate. The spouse is charged based upon his/her individual age.
Child(ren) monthly rate: $10,000 of coverage for $2.00 per family Voluntary Accidental Death and
Dismemberment (AD&D) monthly rate
Employee and spouse $.039
36 Item 3
PRESENTATION
Vacation Leave 2024/2025
Proposed benefits overview
)
-includes changes noted in
Slide 17
Holidays
(continued)
Parental Leave
r 240 hours of paid parental
Benefits Overview
Leave
SVCE offers 1 60 hours of Paid Time Off (PTO) that is accrued bi-weekly for the first year. PTO includes vacation, sick, etc.
After the first-year anniversary date, an additional 8 hours will be granted per year up to the tenth year of employment.
If you have worked at least 1 2 months am
be eligible f
^eav^r^h^b^^^^nonthj
All unused PTO at the end of the year can be carried over to a maximum of twice the annual accrual.
Exempt employees receive an additional 40 hours of Management Leave at the beginning of each calendar year, which does not carry over to the next year.
1 3 days (104 hours) per year.
New Year’s Day
Martin Luther King Jr.’s Birthday
Presidents’ Day
Memorial Day
Juneteenth
Independence Day
Labor Day
Veteran’s Day
Thanksgiving (2 days)
| Floating Holiday (does not accrue, use annually)| |
Christmas Day though New Year's Day
Up to 5 days paid bereavement leave in the event of a death in your immediate family.
Administrative Shut-Down Leave
Bereavement Leave
Item 3
PRESENTATION
CD CCA Parental Leave
CCA Parental leave data is based on CCA
input to survey questions, not all CCAs
provided input or refreshed data
CCA #
employees:
Do you provide Paid Parental Leave in addition to
Mandated CA Pregnancy Disability Leave, If so how
many hours?
SDCP 55 6 weeks or 240 Hours. Benefit reduced for Reg PT employees on prorated basis.
Sonoma
Clean Power
44 SCP employees eligible for up to 160 hours of paid bonding leave.
Marin Clean
Energy
94 Yes, 30 days (240 hours)
Peninsula
Clean Energy
50 We follow state regulations.
Additional supplemental leave of 240 hours to FT EES employe 6+ months.
-The first 120 hours of which are 100% paid, (or 120/8
hours=15 days for FT EE)
AVA 77 16 weeks (640 hrs)
Silicon
Valley
Clean
Energy
58 Yes: 120 hours (current FY 23/24 approval)
38 Item 3
PRESENTATION
CD Holiday
Cesar Chavez Day
Agency Comparitor #of agencies observing # of agencies NOT observing CCA 8 5
Member Agency 5 5
Indigineous People Day
Agency Comparitor #of agencies observing # of agencies NOT observing CCA 7 6
Member Agency 4 6
indigenous People Day is another holiday that many agencies have added and was under consideration, but it was not requested in this budget cycle. The data is based on online availability in June. 39 Item 3
PRESENTATION
O Holiday Comparison Among CCAs
Holiday VCE 3CE SCP CPA MCE AVA RCEA SVCE Pioneer
Martin Luther King Jr.'s Birthday X X X X X X X X X
Lincoln's Birthday X
President's Day X X X X X X X X X
Cesar Chavez Day X X X X X
Good Friday
Memorial Day X X X X X X X X X
Juneteenth X X X X X X X
Independence Day X X X X X X X X X
Labor Day X X X X X X X X X
Indigenous peoples day X X
Veterans Day X X X X X X X X X
Thanksgiving X X X X X X X X X
Day after Thanksgiving X X X X X X X X X
Day before Christmas X X
Christmas Day X X X X X X X X X
New Year's eve X X X X X
10 12 11 14 13 14 13 12 13
*Data is based on CCA input to survey question, not all CCAs input or refreshed data 40 Item 3
PRESENTATION
IHoliday VCE 3CE SCP CPA MCE AVA RCEA SVCE Pioneer
Floating Holidays 2 3 2 3 3 3 1
Shut down 4 3 3 3
Admin or Management Leave (various levels) 10 5 10
12 15 13 17 13 17 16 12 14
Regular, full-time employees accrue 6.67 hours of PTO
per pay period (24 pay periods per year) in your first
year
of eligibility -160 hours.
20 20 20 15 15 15 15 20 10
Total PTO 32 35 33 32 28 32 31 32 24
Total Sick Leave 10 0 0 12 12 12 12 0 12
Total Combined Paid Leave 42 35 33 44 40 44 43 32 36
*Data is based on CCA input to survey question, not all CCAs input or refreshed data 41 •
•
• •
•
•
•
Item 3
PRESENTATION
(rj Recap: Revenue Forecast Depends on PG&E Generation and PCIA Rates
Issue: Rate Uncertainty Staff Recommendation Implications/Reasons PG&E issued the 2024 ERRA forecast
on May 15 with preliminary 2025
PG&E generation and PCIA rate
forecasts
PG&E will update this forecast in the
fall. CPUC normally adopts the rate in
December based on this update
Update the Cal-CCA NewGen model
using lasted energy price data after
calibrating the model to PG&E’s
forecasted rates and making any
adjustments to account for potential
modeling errors
Likely aligns revenues closer to
rates that PG&E will update in
October
Better aligns revenues with power
supply costs
Primarily for budget setting
purposes
Additional expenditures based on
headroom projections can be
made by the Board in December
when there’s more information on
likely 2025 PG&E gen and PCIA
rates
42 •
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•
•
•
•
•
•
•
Item 3
PRESENTATION
Power Supply Expenses
(>90% of Expenses)
Issue: Volatile Power Prices Staff Recommendation Implications/Reasons Power prices are very volatile and have
declined significantly.
In addition to power price volatility, recent
volatility in RA and RPS prices makes
budget projections highly uncertain
Budget has been developed based on a
snapshot of market prices in July 2024
Contract delays/renegotiations further add
uncertainty
Continue hedging to current ERM (Energy
Risk Management) targets
Staff to develop additional analysis
to revisit the hedging targets to
account for impacts from PCIA and
PG&E Gen Rate
The BOD has authorized 90% clean
energy target for calendar year 2025
The budget projection for power supply
costs reflects the updated clean energy
target for FY24-25
Resource adequacy requirements are
changing, and costs are high. Slice of Day
methodology is expected to be
implemented in January 2025, and the
portfolio is well positioned for its
implementation.
43 •
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Item 3
PRESENTATION
44 0^ Other Costs
(Staffing, Cost of living/Merit, Building)
Status Staff Recommendation Implications/Reasons
Review and assess staffing in all
areas of the organization
13 new budgeted positions added in
FY23-24
14 new staff hired since Sept 2023
9 vacancies
Adjust employee salaries for cost-of-living and merit/promotions Review existing employee benefits to
remain competitive with peer CCAs
Finalize office lease with authorized
parameters by Oct 2024.
Current budgeted headcount of 62
Expect staffing levels to stabilize
Adjustment for COLA
Propose to continue using the 6-month (Jan -
June 2024) rolling average of SF Bay Area CPI-current trailing 6-mo average is 3.0% CEO discretion applied depending on employee
pay relative to market range, performance, and
date of hire
Any additional increases for merit and
promotions based on CEO discretion
Budgeted at 3%
Employee benefits -
Adding Cesar Chavez holiday
Increasing paid Parental Leave from 120 hrs to
240 hrs
5 days of Bereavement to adhere to state
compliance
Make $600 fitness reimbursement an accrual up
to $3000
Re-engage the $500 (one time) reimbursement
for remote work set-up
Evaluate staffing levels to:
Scale up decarbonization programs
Reduce the high level of existing employee
workload
Advance strategic focus area goals
Create organizational depth for business
continuity
Sustained investments in cybersecurity
preparedness and business process
optimization projects continue
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Item 3
PRESENTATION
Additional Funding for Programs, Customer Discounts,
and Building Reserves
1% customer discount over 12 months of
2024 is ~$5.02 million*
1% discount over 9 months (Jan -Sep
2025) ~$3.84 million*
Monthly Average Bill Savings of 1%*
Discount:
Residential - ~$0.71
Small Commercial - ~$2.53
Medium Commercial -~$27.91
Issue: Balancing
Priorities
Staff Recommendation Implications/Reasons
Continue to provide competitively-priced and high-valued services to SVCE customers
Funds not needed to cover cost-of-service flow to customers via lower SVCE rates (discount to
comparable PG&E rates)
Continue with 4% discount with an
additional 1% towards bill credits for
low-income customers.
Board can change the budgeted
discount rate once actual PG&E rates
are known towards the end of the
year
Keeping reserves at or above
target levels ensures SVCE can
withstand adverse risk scenarios
and helps maintain/improve
credit ratings
Keeping the discount rate at a
reasonable level
Cost-of-service includes funds
needed to cover operations, meet
reserve targets, and fund
decarbonization programs
Enables additional
funding for valued
customer programs such
as decarbonization efforts
Ensures there’s more
organizational resiliency
to respond to risks over
the 5-yr planning horizon
Based on 6/28/24 Forward prices 45
•
•
•
•
•
Item 3
PRESENTATION
Issue: Review Reserve Targets Staff Recommendation Implications/Reasons Ensure SVCE maintains sufficient
reserves to manage risks such as
those modeled under the stress test
analyses
Target to keep reserves above 120 Days
of Cash On Hand (DCOH) for FY 2024-
2025 and FY 2025-2026 under the
modeled stress scenario
FY 25 margins not guaranteed
given true-up in 2024 for PCIA and
PG&E Gen rate
If adverse conditions materialize,
Staff updated the stress test analyses
in July using market prices consistent
with those used to develop the annual
budget
Reset upper reserve target such that
over the next 5 fiscal years, reserves do
not fall below 90 DCOH under the
modeled stress scenario
need 120 days to reshape strategy
and secure additional liquidity
The upper reserve target enables
the agency to take advantage of
good margin years to manage
risks over a 5-year period
46 • Subtitle
New SV Clean Energy
PowerPoint Template
Adopt the Fiscal Year 2024-25 Strategic
Focus Areas and Strategic Plan
Item 4
PRESENTATION
•
Item 4
PRESENTATION
(2) Request
Adopt Fiscal Year 2024-2025 Strategic Focus Areas and
Strategic Plan Goals.
2 •
•
•
Feb-May
Review current SFAs
New Opportunities &
Threats
Proposed changes to
SFAs
June 2024 Board
FY 2025 Budget
Framework
Strategic Plan and SFAs –
discussion/feedback
August 2024
EC - FY 2025 SFAs and
Strategic Plan Goals
FC – FY 2025 Budget
Board – FY 2025 Budget
September 2024
Board Approval of FY 25
Budget
Board Approval of FY 25
Strategic Focus Areas &
Strategic Plan
Item 4
PRESENTATION
CD Overview
Review Fiscal Year 2024-25 Strategic Plan & Budget process Item 4
PRESENTATION
0 SVCE Planning & Budgeting Process
Budget
Organization-wide priorities and
alignment toward achieving the mission.
Helps set CEO & Board priorities.
Identifies funds needed to achieve
Strategic Focus Areas and Strategic Work
Plan
Comprehensive assessment of risks and
opportunities to optimally achieve mission and
helps direct strategic focus areas.
isk
nt
SVCE Mission: Reduce dependence on fossil fuels by
providing carbon-free, affordable, and reliable
electricity and innovative programs for the SVCE
community. REMAINS THE SAME!
4 Board Approved 5 Strategic Focus Areas
for FY 2024
SFA1 SFA2 SFA3 SFA4 SFA5
Item 4
PRESENTATION
Synergy & Overlap
Expand Clean &
Reliable Grid
Actions
Expand Customer
Base & Interaction
Accelerate Building
& Transportation 5
Electrification
Implement
Innovative
Financing Solutions
Attract & Retain
Employees
Explore 24x7 clean
energy delivery at
scale; evaluate
SVCE role in
enhancing
distribution and
transmission
reliability
Grow non-residential
customer base;
Expand Offerings &
emphasize
electrification to all
customers
Accelerate
deployment of
currently adopted
decarbonization
strategies and
goals; evaluate and
capitalize on
federal and state
funding
opportunities
Implement
innovative financing
solutions to
increase impact of
decarbonization
program offerings,
especially to lower-income customers
Be the Employer of
Choice, and
Increase Staffing;
Hire CEO
5 Item 4
PRESENTATION
FY 2025 Proposed Strategic Focus Areas
SFA1
Expand
Affordability
Efforts
Expand rate-related
education,
legislative and
regulatory
advocacy, and rate¬
setting principles to
support all-electric
as the most
affordable and
competitive option
for customers.
SFA2 SFA3 SFA4
Expand Clean &
Reliable Grid
Actions
Expand Offerings
to C/l Customers
Prepare Region
for Electrification
at Scale
Develop a pathway
to 2030, 2035 and
2045 for clean
energy delivery at
scale; evaluate
SVCE product
offerings to ensure
the agency
provides customers
a sustainable
balance of clean,
reliable and
affordable energy.
Engage
commercial and
industrial
customers in
new/expanded
SVCE offerings,
including
electrification and
demand-side
management
programs, and
customized
generation
services.
Inform and prepare
for upcoming
requirements such
as BAAQMD and
CARB rules to
ensure they are
implemented
sensibly,
successfully and
equitably; continue
scaling SVCE
efforts.
SFA5
Attract & Retain
Employees
Be the Employer of
Choice and
maintain culture of
innovation,
collaboration, high
performance, and
passion for our
mission.
Board affirmed support for these 5 strategic focus areas at June BOD meeting. No new changes. 6 6 Item 4
PRESENTATION
Strategic Plan & Focus Areas
Reduce dependence on fossil fuels by providing carbon-free, affordable, and reliable electricity and innovative programs for the SVCE community
®®®®®®®®®
®®®®®®®®®®®®
•
Item 4
PRESENTATION
CD Strategic Plan Changes
1. Strong ties to the Strategic Focus
Areas
2. Sought staff input on all goals and
measures
3. Organized by Functional Area vs.
Department
4. Went from 25 goals in the FY 23/24
Strategic Plan down to 10
5. Measures included as information in
support of Goals, but may change
key metrics as a part of work plan
6. Provide BOD quarterly updates on
progress
SVCE Functional Areas
External Policy,
Regulatory and
Legislative
Advocacy and
Support
SVCE Strategy
and Planning
Power
Procurement,
Management
and Operations
Financial
Planning
Program
Development
and
Implementation
Customer
Service and
Community
Relations
Human Resources, Business Processes, Information
Technology, Systems and Data Governance
Item 4
PRESENTATION
CD FY 2025 Proposed Strategic Plan - Goals
1. Advance policies which support SVCE’s mission to reduce dependence on fossil fuels.
2. Long-term, target for 100% clean energy annually by building a balanced portfolio with consideration for both affordability and reliability while exploring long-term pathways to clean power supply.
3. Create a long-term decarbonization plan that integrates supply and demand changes, opportunities, and challenges.
4. Acquire power supply resources in a cost-effective manner to meet legislative and regulatory obligations, Board directives and customer specific products.
5. Manage and optimize load and power resources to meet affordability, GHG reduction and reliability objectives.
6. Maintain healthy financial position; avoid failures in management of market risk, credit risk, liquidity risk, operational risks, and enterprise risks.
7. Support all SVCE communities to decarbonize through local investments that reduce barriers and demonstrate sensible, scalable, and equitable solutions.
8. Engage customers and community stakeholders to build trust of SVCE and advance decarbonization.
9. Implement industry best practices to enable data-driven decision making across the organization; enhance systems, standards and procedures to streamline business processes and improve operational effectiveness and reliability (aka SVCE
3.0).
10. Hire, retain and develop high-performing talent via competitive benefits and rewarding work culture. 9 Item 4
PRESENTATION
(2) Request
Adopt the proposed FY 2024-25 Strategic Focus Areas and Strategic Plan.
10 Item 4
PRESENTATION
Thank you
11 New SV Clean Energy
PowerPoint Template
• Subtitle
Item 5
PRESENTATION
Item 5
PRESENTATION
Objective
1. Provide status update on BAAQMD rule
2. Provide status update agency readiness planning
SILICON VALLEY <3/ CLEAN ENERGY 2
Item 5
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. $4M
For sensible policies
and smooth
permitting
SILICON VALLEY 1
CLEAN ENERGY
$3M
Permit Modernization
$1M
Policy
Experimentation
3 Item 5
PRESENTATION
BAAQMD Update
1. BAAQMD will report to the Board in December on market readiness, including costs, technology, workforce, and tenant protections.
2. SVCE is coordinating the 7 Bay Area CCAs to develop scalable solutions that support our communities.
3. South Coast Air Quality Management District passed similar phase out rules, but starting with larger water heaters and including new construction.
4. CA Air Resources Board -the current proposal would make phaseout gas water heaters statewide starting in 2027.
SILICON VALLEY
CLEAN ENERGY 4
Item 5
Each
PRESENTATION
agency selects from a menu of options to help
their community more easily make this transition.
Foundational Practices Advancing Practices Leading Practices Complete required practices* + choose 2 additional
from below
Implement 3 advancing practices Foundational + Advancing + Choose 2 from below *Review EVI code, update if needed Incorporate Mechanical Siting best practices
Minimize barriers to inspections (blinders, virtual
inspections)
*Review New Construction Reach Code and make
compliant with Berkeley decision
Require Bidirectional HVAC at time of AC
replacement
BAAQMD ramp up (includes electrification readiness)
Provide staff training for expedited permitting Establish HPWH permitting equivalency Require disclosures about appliances at time of sale Develop pre-application support materials Require electrification upon 50% remodels Implement Contractor Certification Program Free permit pilot Incentive-based remodels for electrification Implement Permit Concierge Require prewiring for all major remodels based on an area (sq. ft.) or permit valuation trigger
Certificate of quality inspection Allow plumbing contractors to perform minor electrical work to streamline HPWH installations
Distribute info about BAAQMD, incentives, etc. with
each permit
Participate in educational training on appropriate
power design
Adopt real-time permitting for HPWHs
PROGRESS UPDATE
Member Agency Director Meeting Staff Meetings Action Plan Status Progressing Towards
Foundational, Advancing,
or Leading
Campbell 1/17 2/2 Staff Finalizing Advancing
Cupertino 1/19 2/14 SVCE Drafting TBD
Gilroy 1/30 2/26 SVCE Drafting TBD
Los Altos 1/26 2/7, 2/29 SVCE Drafting TBD
Los Altos Hills 1/19 2/24* Staff Reviewing Leading
Los Gatos 1/9 2/6 Staff Reviewing Leading
Milpitas 2/5 2/5 SVCE Drafting TBD
Monte Sereno 1/9 4/29 Staff Finalizing TBD
Morgan Hill 2/9 5/1 Staff Reviewing TBD
Mountain View 2/13, 2/16 2/27, 4/3 Staff Finalizing Leading Saratoga 2/1 3/8, 5/29 Staff Reviewing Advancing
Sunnyvale 2/5 2/14, 3/12 Staff Reviewing Leading
County of Santa Clara 2/9 7/10 Staff Reviewing TBD
Item 5
PRESENTATION
Most jurisdictions are reviewing or finalizing
action plans.
•
•
Item 5
Member
PRESENTATION
agencies are already leading the way!
1. Campbell passed an ordinance that ensures new development and all major renovations are zero emissions!!!
Applies to projects >$185K or removing 75% of roof or walls Sensible exemptions
2. Monte Sereno already permits HPWHs in 24 hours!!!
SILICON VALLEY
CLEAN ENERGY 7
Item 5
PRESENTATION
Thank you! M svcleanenergy.org
|^| [email protected]
SILICON VALLEY
CLEAN ENERGY 8
Item 5
PRESENTATION
Appendix
SILICON VALLEY
CLEAN ENERGY 9
•
•
Item 5
PRESENTATION
The Impact of Local Government Action
Sensible action now can make this transition easier and cheaper. For example, if every jurisdiction...
Adopted prewiring requirements it could lead to tens of thousands of electric-ready homes by 2030.
Required bidirectional AC at the time of replacement, it could add ~20,000 heat pumps by 2029 and save residents $ millions in redundant costs.
Note: These are meant to be illustrative examples. Assumptions in the appendix.
SILICON VALLEY
CLEAN ENERGY 10
•
•
•
•
Item 5
PRESENTATION
The Impact of Your Leadership - Assumptions
Sensible action now can make this transition easier and cheaper. For example, if every jurisdiction...
Adopted prewiring requirements it could lead to tens of thousands of electric-ready homes by 2030.
There are at least 5000 permits drawn per year in our service territory that could reasonably require pre-wiring. This could mean at least 25,000 electric-ready homes by 2030. Given the variety of ways these policies could be written, we are not stating a certain number, but rather an order of magnitude.
Required bi-directional AC at the time of replacement, it could add "16,000 heat pumps by 2029 and save residents $ millions in redundant costs.
According to the market saturation study that SVCE conducted, there are "100,000 ducted AC systems in our territory and they last "20 years. Assuming an even annual turnover, that is "5 replacements per year and "20,000 by 2029 if policies went into effect in 2025.
SILICON VALLEY
CLEAN ENERGY 11
Item 5
PRESENTATION
SVCE is providing a comprehensive set of resources
to help each agency meet its goals.
Resources Available Permit
Modernization
Policy
Experimentation
1:1 consultation w/SVCE staff (Board member & agency
staff) X X
Available
to All
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
Available
to
Leadership
Stipend for part-time, one-year fellow
X X
Cohort
silico
Expanded consultant support to implement leading-edge
initiatives X X
VS7CLEAN ENERGY 12
1 • Subtitle
New SV Clean Energy
PowerPoint Template
Clean Energy Pathways
Board of Directors Meeting
September 11, 2024
Item 6
PRESENTATION
2 What we will discuss today
Background:
1) Market fundamentals
2) Market outlook
3) Portfolio management best practices
E3 Study and Results:
1) Study overview and purpose
2) Current Portfolio
3) Initial Results: build, emissions and costs
4) Risks
Board Discussion and Input on key Planning/Policy Questions Next Steps
Item 6
PRESENTATION
3 Key Planning and Policy Questions
What should SVCE's Clean and RPS target be for 2030, 2035, 2040, 2045? Should we set an Annual, Hourly and/or Other Clean target? How to balance long-term vs. short-term contracts?
Should SVCE have an additionality requirement (i.e., only new build)? How much should SVCE rely on hydro and nuclear (market & allocations)? How much “room” to leave for CPE and emerging technologies? What is the role of virtual power plants and distributed energy resources in meeting targets?
Should we pursue local generation?
Given overall targets, what should customer product offerings look like? Item 6
PRESENTATION
4 Market Considerations
SVCE’s portfolio value is dependent on three primary products:
1) Energy: Real time cost of resources in the CAISO market 2) Renewable Portfolio Standards (RPS): Renewable Energy Credit (REC) value for RPS compliance*
3) Resource Adequacy (RA): Capacity value resources, to meet RA compliance *As SB100 becomes binding, RPS and GHG-free values will likely converge.
Values are determined by:
• Energy: Real time marginal unit on the grid
• RPS/ RA/ GHG-free: System supply relative to demand – which is largely driven by compliance obligations.
*Resources that count toward Renewable Portfolio Standards (RPS) are a subset of renewables, such as wind, solar and geothermal. GHG-Free includes all RPS resources, plus large hydro and nuclear energy.
Item 6
PRESENTATION
5 Where is the Market Headed?
Increasing solar will continue to put downward
pressure on energy prices mid-day. Increasingly
solar will be curtailed.
Batteries – which make money on arbitrage value
– will cannibalize their own value over time
putting downward pressure on off-peak hours.
Energy market revenue will likely fall,
though how much will vary by hour and
location.
• Under “Slice of Day” the highest RA value is expected to be from resources which count in all 24 hours. • RPS value will depend on supply and demand: 1) whether LSEs overbuild relative to their compliance obligations and 2) if they are willing to sell their long positions
• GHG-free value will likely increase as SB100 becomes binding. Hydro will become more scarce due to both increased demand and increased volatility in supply resulting from climate change. • Regionalization and/or market diversity will help retain value and reduce curtailments.
Item 6
PRESENTATION
25 20
15 10
5 0
12 AM 2 AM 4 AM 6 AM 8 AM 10 AM 12 PM 2 PM 4 PM 6 PM 8 PM 10 PM Data source: California Independent System Operatorcf (CAISO) 6 Where is Technology Headed?
Many technologies which are not yet commercially viable may be in the future.
• Advanced geothermal
• Nuclear Small Modular Reactors (SMR)
• Gas fitted with Carbon Capture and Storage (CCS)
• Alternate clean fuels (e.g. Hydrogen)
• Long duration (esp. multi-day storage)
Many of these technologies provide firm, reliable energy which gives the resource 24x7 capacity value, while also retaining flexible dispatch allowing the resource to only deliver energy when it is economic to do so.
Item 6
PRESENTATION
7 Regulatory & Other Risk Considerations
The State of California expects to need to add over 100 GW of capacity by 2045.
How SVCE’s procurement efforts will be counted is unknown and subject to long-term regulatory risk
• Stranded Asset Risk
• New procurement orders not counting prior procurement toward an LSE’s obligations; • Loss of load due to Direct Access and resource is no longer needed and uneconomical • Central Procurement Entity leading to suboptimal and/or over procurement – 10.6 GW ordered so far.
• Changing compliance obligations can alter portfolio value • Example: SB100 increasing GHG-free product value
• PCIA
• Potential changes to PG&E legacy portfolio allocation • Regulatory changes impacting PCIA value; SVCE hedge strategy • Load uncertainty
• Compliance obligations determined, in part, by CEC/CPUC forecasts Item 6
PRESENTATION
8 Load Considerations
Future load also presents significant risk in portfolio development As part of its risk assessment
process, staff developed
plausible, albeit extreme, load
forecasts to better understand
the impact of load varying
significantly from expectations
Expected load increase by 2030
is 11% and 42% by 2045
Item 6
PRESENTATION
9 Good Portfolio and Procurement
Management
Deploy laddered procurement strategy – don't buy all at once Balance tenor, short-term vs. long-term contracts and price structure, fixed vs. index, to smooth price risk over time and mitigate impacts of PCIA Diversify technology and location to mitigate curtailment, volumetric and locational marginal price risk
Diversify counterparties to mitigate credit risk
Combination of new and existing resources to manage development and compliance risk Leave room in portfolio for emerging technologies/ procurement orders Leverage joint procurement for economies and to mitigate risk when possible Utilize Inflation Reduction Act credits – build-to-own vs. power purchase agreements Maximize prepay benefits
Item 6
PRESENTATION
10 • Subtitle
New SV Clean Energy
PowerPoint Template
Clean Energy Pathways:
Results
Item 6
PRESENTATION
11 SVCE needs to set clear targets towards a
Clean Pathway
2025 2030 2035 2040 2045
2024:
GHG-free
shortage
2025:
IRP Due
2028:
Hourly
reporting
(SB 1158)
2035: 90%
Annual
Clean (SB
1020)
2040: 95%
Annual
Clean (SB
1020)
2045: 100% Annual
Clean (SB 100)/ 100%
economy wide carbon
neutrality (EO-B55-18)
Current new resource
lead time: 3-5 years
2030: 60%
RPS (SB
100)
2031: Possible first
tranche of CPE
resources
Item 6
PRESENTATION
12 SVCE’s Clean Targets
As part of 2022 IRP, SVCE’s
current RPS board adopted
target of 75% by 2030, 15%
above the state mandate.
SVCE maintains a 100% clean
target on an annual basis.
The organization does not have
explicit RPS target(s) post-2030.
Item 6
PRESENTATION
13 Long-term Clean Position
SVCE has increasingly
layered in long-term
products
As we move into the
late 2030s many
projects will start to
"roll off" and need to
be replaced.
Procurement efforts
underway.
Item 6
PRESENTATION
14 Overview of Work
• In December 2023 SVCE’s Board of Directors approved a contract for E3 to assess various clean pathways for our portfolio – FY 2023/24 Strategic Focus Area #1 • E3 modelled least cost resource build required for SVCE to achieve:
• Annual: 90%, 95%, 98%, 100%
• Hourly: 90%, 95%, 98%, 100%
• Carbon Free Energy (CFE) scores were calculated for each scenario • SVCE staff completed additional risk analysis on the portfolios • Notes on the study:
• “All models are wrong, but some are useful”
• Model assumptions are aligned with CPUC’s Integrated Resource Plan. Actual costs and market valuations may vary substantially.
• SVCE specific assumptions include internal demand forecast, assumes historic hydro allocations and other resources already under contract.
Item 6
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15 Defining Clean
100% Annual:
• Definition: Load Serving Entity’s (LSE) Total annual load = LSE total clean procurement • Load and supply do not need to be time coincident
• Per SB100, every LSE will be at 100 percent clean (on a retail sales basis) by 2045 100% Hourly:
• Definition: LSE’s hourly load = LSE’s hourly clean supply • Must be time coincident
• No compliance obligation; tracking begins 2028
Google Carbon Free Energy (CFE):
• Definition: Weighted average of LSE’s supply and level of clean on the grid when LSE “leans” on the market
Incrementality/ Total Emissions Impact:
• Concept: How much does the LSE’s new resource build contribute to reducing total system emissions?
Item 6
PRESENTATION
16 Capacity Additions to Meet Various Clean
Targets
• 100% hourly matching requires 2,300 MW of new capacity by 2035 vs. 664 MW in 100% annual case • High probability of hourly matching vs. expected hourly matching increases need 15-20% • Wind resources are a significant contributor to hourly matching Existing contracts
and assumed
allocations
(~1400 MW)
New contract
requirements
Pattern filled resources are existing resources already in portfolio CFE:
88%
CFE:
98%
CFE Scores for Hourly Scenarios exceed 99%
Item 6
PRESENTATION
Installed Capacityfor Select Scenarios- 2035
Hydro Allocation >4-hr Battery 8-hr Battery + 10-hr PSH Solar aWind Geothermal 17 GHG Emissions Impact
Hourly clean targets can result in net reduction in emissions (relative to IRP Clean System Power Tool), but impact per dollar spent diminishes significantly as emissions decline. $0
$129
$184
$312
$541
-$100
$0
$100
$200
$300
$400
$500
$600
90%
Annual
100%
Annual
90%
Hourly
95%
Hourly
98%
Hourly
100%
Hourly
Net Cost Per Ton CO2
Reduction
• Much of the additional energy goes to
hours which are already relatively clean
• More restrictive clean targets have much
higher curtailment and excess supply
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
90%
Annual
100%
Annual
90%
Hourly
95%
Hourly
98%
Hourly
100%
Hourly
Gwh
Portfolio Excess Supply
Excess Supply Curtailed Energy
Exports to WECC Actual Demand
(0.50)
(0.40)
(0.30)
(0.20)
(0.10)
-
0.10 0.20
0.30 0.40
Co2 Million Metric Tonnes
Annual CO2 Emissions
Item 6
PRESENTATION
18 Incremental Procurement Costs to Meet
Various Clean Targets
Modelled annual procurement costs increase $300M under a 100% hourly matching scenario Item 6
PRESENTATION
2022$
million
350
300
250
200
150
100
50 0
Annual Procurement Costs, 2035 (Relative to 90% Annual Policy) Hourly Matching scenarios require significantly more long-term procurement contracts (an additional~$130 - $300 million) 100% Annual requires a
small increase in
procurement costs
$129
$302
Annual
90%
Annual
100%
Hourly
90%
Hourly
95%
Hourly
98%
Hourly
100%
19 Net Procurement Costs for 100%
Hourly Case
Expected Cost: 4.3 cents/kWh ($43/MWh).
Expected Offsetting revenue: 3.6 cents/kWh
Net costs 0.7 cents/kWh or $7 MWh
Analysis assumes SVCE is a price-taker and market
prices are based on 2024 Preferred System Plan;
assumes market participants will not exceed SB100
requirements.
Results suggest procurement costs may largely be offset by market revenues based on model assumptions.
These results are highly uncertain and
dependent on market conditions.
Item 6
PRESENTATION
2022
cents/kWh
5.00 4.50
4.00 3.50
3.00 2.50
2.00 1.50
1.00 0.50
0.00 Procurement Costs
(assuming no energy or REC sates)
PotentialEnergy Revenue
Net Costs w/ Energy Revenue
(assuming 75% revenue)
Net Costs w/ Energy Revenue
(assuming 100% revenue)
Potential REC Revenue
Net Costs w/ Energy REC Revenue
(assuming 100% revenue)
-0.50
Hourly
100%
20 Market Risk Under Various Clean Targets
• As oversupply increases, SVCE is
subjected to increasing market
exposure, and therefore market
and stranded cost risk
• SVCE estimates that in the 100%
hourly scenario up to $90M/ yr is
at risk assuming the underlying
system assumptions are accurate.
• Actual value at risk may be
significantly higher if supply
exceeds model assumptions
Item 6
PRESENTATION
GWh
Excess
2035 GWh Sales Excess and Associated Market Price Risk
[excludes risk of fundamental market changes if many participats pursue Hourly 24/7] 3,500 $100,000,000
E3 Analysis Excess GWh Production ^^PowerSIMM Wholesale Revenue Price Risk using P01 21 Pathways Rate Impact
To what degree does the Pathways cost projection impact SVCE Rates? • FY2025 Projected Customer Discounted Generation
Rate = 13.0¢/kWh
• E3 Estimated Cost Range for 100% Hourly 24/7 = 0.7¢
to 4.3¢/kWh incremental
• Rate impacts are highly dependent on supply and
demand and could be 2x the E3 analysis estimate
• Total impact range is 5%-66% increase in rates.
Future year rates and rate impacts all subject to inflation and conveyed in near-term metrics for simplicity and clarity. 13 13
0.7 3.6
4.3 0
5 10
15 20
25 SVCE Current
Discounted
Generation Rates
E3 Analysis
Range
Risk Adjsuted
Rate Impact
Range of Rate
After
Estimated ¢/kWh Range of Rate
Increase for SVCE to Pursue 100%
Hourly 24/7
Potential Rate Range with 100% Hourly 24/7
Staff pragmatic addition to range if others in the market pursue 24/7 E3 Additional High Rate Increase if SVCE is a Price Taker E3 Low Rate Increase if SVCE is a Price Taker
Current Rate Level
8.6 to
0.7 Item 6
PRESENTATION
22 Merits of Clean Options
Minimum
Compliance
Annual
(90 to 100%)
Hourly – 24x7 CFE
2035 Target 90% annual 90 to 100% 100% 90%+
Clean
GHG reduction
Reliable
Meets RA
Affordable
Rate Impact
Comments • Higher compliance
risk (no built-in
excess)
• Current SVCE
policy
• Short-term
challenges
• Aligns with SB100
• Hard to set
achievable target
• Risk of stranded
assets due to over
procurement
• Incents putting
resources/load in
“dirtier” hours
without islanding
the LSE
Item 6
PRESENTATION
23 Key Takeaways
• Current 100% annual clean target is
sustainable however meeting every
year presents a challenge
• Achieving a 100% hourly clean
portfolio through long-term PPAs by
2035 is a big challenge
• The greater the over-procurement
relative to compliance obligations, the
grater the risk to SVCE’s portfolio and
customers.
• Stranded Asset risk challenges
affordability goals
How does the organization responsibly manage its obligations to achieve its mission to reduce dependence on fossil fuels by providing clean, affordable, and reliable electricity and innovative programs for the SVCE community?
Item 6
PRESENTATION
24 • Subtitle
New SV Clean Energy
PowerPoint Template Next Steps and Feedback
Item 6
PRESENTATION
25 Planned Next Steps
A)Staff to further assess viability of 2035 target:
• Maintaining 100% clean target
• Achieving 100% RPS
• Set internal goal, given CPE
• Long-term PPA determination
• Determining achievable hourly clean target
B) Assess role of demand side options via integrated
decarbonization planning process
C) Return to board by March 2025 with recommended clean targets to assess for 2025 IRP
Item 6
PRESENTATION
26 Key Planning and Policy Questions
What should SVCE's Clean and RPS target be for 2030, 2035, 2040, 2045? Should we set an Annual, Hourly and/or Other Clean target? How to balance long-term vs. short-term contracts?
Should SVCE have an additionality requirement (i.e., only new build)? How much should SVCE rely on hydro and nuclear (market & allocations)? How much “room” to leave for CPE and emerging technologies? What is the role of virtual power plants and distributed energy resources in meeting targets?
Should we pursue local generation?
Given overall targets, what should customer product offerings look like? Item 6
PRESENTATION
27 • Subtitle
New SV Clean Energy
PowerPoint Template
Questions & Discussion
Item 6
PRESENTATION