• Subtitle
New SV Clean Energy
PowerPoint Template
Item 3
PRESENTATION
Updated 2/27/25
Power Purchase
Agreement Project
Selection Policy
February 28, 2025
SILICON VALLEY
CLEAN ENERGY
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Item 3
PRESENTATION
Updated 2/27/25
CD Workforce Activities
3 Focus Areas - Building Demand, Education, Stakeholder Outreach. Activities include:
Contractor Electrification Training: 288
contractors completed program, $500 for
5 hours of training
Robust programs and voluntary
prevailing wage
Convening contractors: Learn about
barriers to electrification
Funding: $1.3M for workforce
partnerships to prepare for Air District
Rules
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Item 3
PRESENTATION
Updated 2/27/25
Purpose of Power Purchase Agreement (PPA)
Project Selection Policy and Current Practice
PPA Project Selection Policy guides evaluation of PPA
proposals
Current labor provisions -require prevailing wage, which can be satisfied upon execution of a Project Labor
Agreement.
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Item 3
PRESENTATION
Updated 2/27/25
Key elements
Proposed PPA Project Selection Policy
Maximize regulatory and market value for best fit and
value while balancing risk mitigation and reliability goals.
Workforce Standards
Environmental Stewardship
Technology Diversification
Location
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Item 3
PRESENTATION
Updated 2/27/25
Communications with Stakeholders
Stakeholder groups included:
Working Partnerships USA
South Bay Labor Council
IBEW 332
Santa Clara and San Benito Building Trades Council
CCA Workforce and Environmental Justice Alliance
SF Electrical Construction Industry
Center for Sustainable Neighborhoods
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Item 3
PRESENTATION
Updated 2/27/25
Changes as result of stakeholder feedback
Partial list
Workforce Standards: Project Labor Agreements as highest preference
Environmental Stewardship: Preference for projects on
previously disturbed/urban land
Community Engagement: Developers that engage the community CC Power: Will use policy to determine whether to participate in CC Power projects
Reporting: Added annual supplier diversity reporting
Board Direction: GHG emissions evaluation
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Item 3
PRESENTATION
Updated 2/27/25
Additional Stakeholder Requests
Summary List
Local Hire: 30% goal
Targeted Hire: 10% goal hiring from workforce pipeline programs Apprentices: Medium priority projects
Location: 1) Service Territory, 2) in State of California and CAISO, 3) interconnect with CAISO, and 4) all other projects
Environmental: Earlier stage projects and measurable offsets Item 3
PRESENTATION
Updated 2/27/25
8 Recommended Action
Staff requests the Executive Committee recommend the
Board of Directors adopt the Power Purchase Agreement
Project Selection Policy.
• Subtitle
New SV Clean Energy
PowerPoint Template
Item 4
PRESENTATION
SILICON VALLEY
CLEAN ENERGY
Amrit Singh, CFO;
Scott Wrigglesworth, Director Risk & Analytics;
February 2025
Energy Risk Management Policy
Recommended Revisions
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Item 4
PRESENTATION
Executive Summary
The PG&E PCIA is financial hedge, affirmed by
Analysis using 3rd Party Model (NewGen)
5-year historical back-cast performance between market price and rates Stress test analysis consistently shows benefits for high prices and not low Strong revenues in recent years (real PG&E MPB after high market prices) Adverse outcome can easily occur if PCIA is not considered a hedge If SVCE pegs its rates to PG&E using a discount from PG&E, the pegged PG&E Generation Rate may also provide some level of hedging
Staff is seeking Board Approval of Policy Revisions which include, but are not limited to:
Recognize financial hedge impacts of PCIA and potentially, the PGE Gen Rate Inclusion of PCIA, and potentially, and Gen Rate in hedge ratios Modifications to move certain operational and reporting requirements to CEO-approved Standards
• Subtitle
New SV Clean Energy
PowerPoint Template
Item 4
PRESENTATION
Item 4
PRESENTATION
CD Recommendation
SVCE Executive Committee recommend the Board of
Directors approve revisions to SVCE’s Energy Risk
Management Policy.
Key proposed change to the ERM Policy is the inclusion of the PCIA & PG&E Gen Rate ‘hedge’ when assessing overall position.
4 •
Item 4
PRESENTATION
(?) Key ERM Policy Revision: PCIA Impact
Language change to put policy revision into effect
Change section 3.3
3.3 Net Revenue Risk
Net Revenues are the total of all revenues received (from retail sales to customers and from the sale of any energy products that wore surplus or unnoodcd), including any calculated financial impacts from the Power Charge Indifference Adjustment (PCIA) and any retail rate(s) indexed to any other rate(s) and/or component(s) such as PG&E rate(s), less the total costs (including the costs of long-term contracts, forward transactions^nd spot market purchases plus all other operating costs). Net Revenue Risk is the risk that any of those factors—revenues or costs—changes (e.g. changes in market prices or retail sales volumes,or failures of counterparties). Net Revenue is the "bottom line" for SVCE as it determines the financial viability of the authority.
One of the main components of net revenue risk is on the retail revenue side, which is at risk when customers opt out from service by SVCE and return to PG&E, or if customers choose to find another supplier through direct access opportunities that may arise. In addition, when the Power Charge Indifference Adjustment (PCIA) ischanqedand any other rate(s) or index(es) to which the retail rates are indexed are changed, it directly affects SVCE's bottom linefinancials if SVCE compensates by changing its retail rates. 5 •
Item 4
PRESENTATION
1 Key ERM Policy Revision: Thresholds
Hedge thresholds eliminate the prompt quarter limit and add PCIA and Indexed Gen Rate as factors Change section 6.4
SVCE will maintain Net Open Position (NOP) portfolio hedge levels, inclusive of a percentage related to the PCIA and any retail rate(s) indexed to any other rate(s) and/or component(s) such as PG&E rate(s), within the tolerances_outlined in Table 1 below:
Removing the prompt quarter tolerance
band and replacing with seasonal 12
month forward hedging guideline in
standards. The guidelines will honor the
Annual policy NOP bands.
Table 1Calendar Year Energy NOP Tolerance Bands
Period* Minimum
Tolerance
Maximum
Tolerance
Prompt Quarter -85% 110%
Current Balance
of Year
80% 110%
Year 2 70% 90%
Year 3 55% 80%
Year 4 50% 80%
Year 5 50% 80%
*For example, if the current year calendar year is 2023, then Year 2 is 2024.
Note that Staff is not recommending changing the NOP Tolerance Bands; only including the representation for the PCIA and Gen Rate financial hedge impact 6
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Item 4
PRESENTATION
Other ERM Policy Revision
There are other more minor ERM Policy Revisions included Move some metric definitions and metric lists to a ERM Standards Move some operational elements to a ERM Standards document Add references to the ERM Standards document where appropriate Update CEO references from ‘he/his’ to ‘they/their’ references Clarify that, for authorized traders, notional dollar values per transaction and cumulative across the tenors of the limits. (was understood but not explicitly stated in the policy) • Subtitle
New SV Clean Energy
PowerPoint Template
Item 4
PRESENTATION
Technical Walk-Through
SILICON VALLEY
CLEAN ENERGY
Item 4
PRESENTATION
CD PCIA Reminder
Biggest contributor to financial risk: PCIA and PG&E Generation Rate Uncertainty.
PG&E Gen Rate
SVCE
Discount
PCIA and PG&E Gen Rate determine SVCE Rates and,
therefore, Revenues
Revenues Revenues
PCIA increases and PG&E generation rates decrease when energy prices decline Because of hedging, power supply costs are locked
Item 4
PRESENTATION
(?) Financial Planning & Risk Management
Incorporating the PCIA and Indexed Generation Rate as a hedges allows SVCE properly mitigate portfolio risk ILLUSTRATIVE Charts Show Relative SVCE Portfolio Market Price Sensitivity without and with Dynamic PCIA & Revenue Rate •
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Item 4
PRESENTATION
CD PCIA & Gen Rate Hedge as Power
Introduction to a prospective methodology for incorporating PCIA & Gen Rate Hedge Impact Current Approach
Load MW ISTs Mw PPAs MW Net MW Hedge
Ratio
(400) 80 200 (120) 70%
Approach being Evaluated for Recommendation
Risk Minimizing plsk Minimizing Volumetric Equivalent
Hedge w/ Dynamic -
Hedge w/ Static - of PCIA & Gen Rate
PCIA & Gen Rate pcia & GenRat^^^^ Financial Hedge
Load MW
PCIAIGen
Financial
MW
iSTsMW PPAs MW Net MW Hedge
Ratio
(400) 180 80 200 60 115%
Note: Conceptual Examples
PCIA & Gen Rate Hedge is
Financial; methodology creates
physical representation
Calculation of impact is a
function of market conditions,
regulatory updates and
NewGen vendor model
This potential methodology
streamlines implementation
operationally and avoids a
complete overhaul of metrics
11 Item 4
PRESENTATION
O Implementation
Upon approval for SVCE Staff
1. Immediately update reporting & position management for the PCIA financial hedge using the NewGen model to consistently measure the hedge level(s) based on portfolio risk forward price simulations.
2. Further explore the PICA & PG&E Generation Rate financial hedge implementation taking into account rate strategy, compliance obligations, and overall portfolio management.
3. Report back to the ROC on outcomes of item 2 ahead of implementation of changes.
4. Monitor the regulatory proceedings on the PCIA and Market Price Benchmark to anticipate implications of regulatory change. 12 •
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Item 4
PRESENTATION
Implications Considered
Accounting for the PCIA Financial Hedge may have operational implications CAISO Collateral
net settlement of weekly invoices will
not have a material impact on days
liquidity.
an extreme shock to net settlement on
a backcast creates limited cash
exposure.
CAISO pays interest on money they
hold on par with out other investments
No Impact on PGE POLR Collateral
Potential hurdles related to
possible future CPUC Regulation of
CCA Hedging Programs
2023 and 2024 Backcaston Rolling? Day CAISO Net Settlement for CAISO CollateralConsideration 13 Hedge
Level
(Dotted
Green)
Item 4
PRESENTATION
O Recommendation
SVCE Executive Committee recommend the Board of
Directors approve revisions to SVCE’s Energy Risk
Management Policy.
Next Step:
Seek Board approval at the March 12, 2025 meeting as a consent item on the agenda.
14 • Subtitle
New SV Clean Energy
PowerPoint Template
Item 5
PRESENTATION
Item 5
PRESENTATION
Addressing the Electrification Knowledge Gap
‘One-stop shop’
how it started how it’s going
Scaling electrification
engagement
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Item 5
PRESENTATION
Customers Are Engaging with eHub Resources
Email marketing with online promotions
k Inspiration &
* Awareness
Bring electrification to customer’s minds
V
r
and sweepstakes
Digital, in-language and out-of-home
advertising
Collaboration with member agencies to
further engage customers and meet
jurisdiction-specific objectives
Total eHub Users by Fiscal Year
140,000
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eHub Resource Average Time on Page
SVCE eHub Webpages 2 min 17 seconds
EV Assistant 2 min 05 seconds
Solar+Battery Assistant 1 min 50 seconds
Appliances Assistant 1 min 39 seconds
Item 5
PRESENTATION
Customers Are Spending Time Learning About
Electrification
Provide knowledge to customers of the benefits of electrification Customers are engaging with the online content
Delivered over 9 million emails with a 46% average open rate •
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Item 5
PRESENTATION
PrJ Customers Are Participating i
Rebates
Assisting customers to take action
Online tools that allowed
customers to take the next steps
right from eHub
EV Assistant
Solar + Battery Assistant
Appliances Assistant
Seamless flow from information
to SVCE programs, external
programs, and member agency
promotions
n SVCE Promotions and
Appliances Assistant Promotion Participation
2,164 Total eHub Promotion
Participants
172
applied
for FFH
'8% of total eHub promotion participants
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A screenshot of a computer
AI-generated content may be incorrect.
A screenshot of a computer
AI-generated content may be incorrect.
ehub.svcleanenergy.org
Item 5
PRESENTATION
The New eHub is Connecting Customers to SVCE Rebates
and Resources More Easily
(2) Home Appliances Marketplace
Appliance Marketplace
Find the best products for you and your family
Electric Water Heaters EV Chargers Induction Cooking Appliances Mini Splits Air Conditioners Dryers Washers Thermostats Poi Top Energy Products
Shop only the most energy
efficient products In your price
range.
All products are ENERGY STAR'
certified where applicable.
Product Price Range
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SO $1,000
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Brands
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10 ELECTRIC WATER HEATERS
Bost Reviews
Performance Platinum 50 Gal.
10-Year Hybrid High Efficiency
Smart Tank Electric Water
Heater
A 4.3 (2,108 reviews)
| Compare + 'j
Most Efficient
ProTerra 50 Gal. 10-Year
Hybrid High Efficiency Smart
Tank Electric Water Heater
with Leak Detection & Auto
Shutoff
4.3 (2,108 reviews)
Beit Price
4.3 (2.108 reviews)
Performance Platinum 40 Gal.
10-Year Hybrid High Efficiency
Smart Tank Electric Water
Heater
$E672TtrlFpr
home fer
Steps to a Home Upgrade
'-ann.,
Three pathways to an electric home
Rebates Assisted Full-Service
Leam More Learn More Learn More
See Benefits
See Covered Upgrades v
1. Assess Your Home
ehub.svcleanenerqv.on
Choose your ideal contractor,reserve your
rebate, and claim your reimbursement
Maximize your savings with our web-enabled platform that assists with incentives and competitive quotes
CA^sor
2. Home Health Checkup 3. Explore Incentives 4. Install Your Upgrades 5. Compare Rates 6. Shut Off the Gas Enjoy hassle-free upgrades with fixed
pricing and the help of our trusted partner
contractors.
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Mailer Email
Press Release Blog Newsletter
Item 5
PRESENTATION
1 The New eHub is Reaching Customers
Launch Tactics
Post Launch Tactics
Press Release Blog and Newsletter
Mailer Email
Digital Ads
• 2/12 -3/14
. 3/17 - 5/18
Transit and
Print Ads
• 3/17 - 5/ 18
Targeted
Emails
Promotional
Rebates Digital Ads Multi-lingual
Webpages
eHub is the place
7 Item 5
PRESENTATION
Learn more IM! eHub.svcleanenergy.org
|^| [email protected]
@svcleanenergy
SILICON VALLEY
CLEAN ENERGY 8