• Subtitle
New SV Clean Energy
PowerPoint Template
Integrated Decarbonization
Roadmap Recommendations
August 2026
Item 3
PRESENTATION
2 EC Discussion Objective
Staff requests the SVCE Executive Committee:
Recommend that the Board of Directors approve the
proposed 2027 –2045 Decarbonization Roadmap
Recommendations, which include new goal, targets,
principles, priorities, and outcomes.
Item 3
PRESENTATION
3 Definition of Key Terms
Term Definition
Goal Long -term, measurable, overarching decarbonization objective Targets Number of passenger vehicles and building appliances that must be electrified to meet SVCE's long -term decarbonization goal Principles Core values that guide SVCE's decarbonization priorities and inform decision making and resource allocation
Priorities Key recommendations that bridge SVCE's long -term goal with targets and outcomes over the next six years
Outcomes Results from SVCE investments, such as reduced costs to electrify, that will accelerate market deployment by solving challenges critical to reaching targets
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PRESENTATION
4 Recommendations enable flexible planning if budget
changes; forecasts based on current budget.
Higher Budget ($24M/yr)
Medium Budget ($12M/yr)
Lower Budget ($6M/yr)
CURRENT FORECAST
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PRESENTATION
5 Roadmap builds off eight years of achievements and
lessons learned.
Achievements
• Met 100% of energy demand with
clean energy 9 out of 10 years
• Contracted for > 1,000 MWs of NEW
renewable energy and 2,000 MWh of
NEW storage
• Lowered electricity emissions >1 million
metric tons, compared to 2015
• Supported reach codes that could add
> 10,000 residential heat pumps while
lowering costs
• Built holistic program portfolio adding
> 5,000 heat pumps and 750 EV
chargers
Lessons Learned
• Regulations and market forces can increase
prices beyond what is reasonable
• Member agency action is one of the most
powerful levers for electrification
• Electrification scale, speed, and cost vary
based on design, technology, and site
conditions; targeted programs can
accelerate deployment and lower costs
• SVCE drives strong innovation when it
focuses on specific, timebound challenges
Item 3
PRESENTATION
6 Decarbonization Roadmap Organization
Path to 2045 Decarbonization
• SVCE Decarbonization Goal
• Targets
• SVCE Role
• Emissions Trajectory
• Phases to 2045
2027 –2032 Recommendation
• Principles
• Priorities
• Outcomes
Item 3
PRESENTATION
7 The 2018 Decarbonization Roadmap set a series of interim GHG goals, but did not include targets or outcomes.
2018 Goal
"Reduce GHG emissions from 2015
baseline levels 30% by 2021, 40% by 2025,
and 50% by 2030."
We need a goal that officially extends
beyond 2030, aligns with current state
goals, incorporates the need to adjust
spending based on the Financial Levers
Playbook, and includes measurable targets
and outcomes that are beyond emissions.
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PRESENTATION
8 Proposed 2027 –2045
SVCE Decarbonization Goal:
Drive the SVCE region to fully electrify
every building and vehicle by 2045 and
power it with clean energy.
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PRESENTATION
9 Targets for electrification help more effectively
measure progress towards this 2045 goal.
2025 Baseline -
Electrified
Equipment 2032 Target 2038 Target
2045 Target
(100%
Electrified)
Light -Duty Vehicles 75,000 132,000 200,000 451,500
Residential HVAC 29,000 75,000 130,000 271,000
Residential Cooking 9,700 40,000 110,000 281,500
Residential Water Heaters 4,000 35,000 85,000 252,000
Commercial HVAC 3,800 5,500 8,500 10,500
Commercial Water Heaters 100 600 2,200 6,500
Proposed Targets*
*Data sources on appliance adoption are rapidly evolving and proposed targets and baseline numbers presented above are subject to change based on future research .
Item 3
PRESENTATION
10 Summary Proposed Goal & Targets
Replace 2018 Goal With New Goal: Drive the SVCE region to fully electrify every building and vehicle by 2045 and power it with clean energy.
• 2045 goal aligns with state AB 1279 carbon neutrality commitment • Codifies SVCE's leadership and focus on electrification and clean energy Add Targets: Develop targets for building appliances and passenger vehicles.
• SVCE will serve as the regional hub for tracking progress, modeling uptake, and sharing successes and failures
• Targets reported on every 2 –3 years; emissions reporting continues annually • Note: Targets may need to be revised based on future research and evaluation Item 3
PRESENTATION
11 SVCE advances goal by working across four areas.
Build Clean Power Supply Catalyze Local Government
Capacity
Serve as Customer and Community
Resource Advance Thought Leadership
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PRESENTATION
12 Challenge: Emissions decreased, then plateaued and
don't appear to be on track to hit 2030 goal.
Source: SVCE 2024 GHG Inventory
Data for 2016 not
collected since prior
to SVCE launch
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PRESENTATION
13 Deep decarbonization will not be linear. More likely to be a series of plateaus and ramps.
2027 2032 2038 2045
Solving cost issues
Reducing friction
Refining tech
Accelerated
deployment
Planned
systemic
deployment
In these next 6 years, we need to reduce barriers
and create increased market change.
Eventually incremental change
becomes exponential.
Greenhouse Gas Emissions
Note: chart is illustrative
This is still optimistic;
spikes are feasible.
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PRESENTATION
14 Adoption is growing, but still nascent.
Where we
are today
Technology type Interim targets Ultimate goal
Technology Type
2025 %
Electrified 2032 Target* 2038 Target* 2045 Target
Commercial HVAC 36% 52% 80% 100%
Light-Duty Vehicles 17% 29% 44% 100%
Residential HVAC 11% 28% 48% 100%
Residential Cooking 3% 14% 39% 100%
Residential Water Heaters 2% 14% 34% 100%
Commercial Water Heaters 2% 9% 34% 100%
Note: "Commercial" refers to typical Small -to-Medium Business equipment, specifically packaged rooftop HVAC units no larger than 20 Tons and hot water heaters with unitary storage tanks no larger than 120 gallons. *Developing specific targets will require dedicating resources for further study and evaluation. Proposed targets presented above are subject to change based on future research.
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PRESENTATION
15 PROVE (2020 -2026)
• Build support and
awareness
• Launch early
programs and new
construction reach
codes
• Learn what is
deployable and
feasible
15 DEVELOP (2027 -2032)
• Deploy where most
feasible to increase
demand and lower
overall costs
• Adoption is mostly
driven by residential
• Continued
experimentation and
policy efforts to
reduce barriers
BUILD (2033 -2038)
• Standardization of
EV charging
• Standardization of
BE retrofits
• Increased adoption
of nonresidential
electrification
DEPLOY (2039 -2045)
• Managed gas
transition planning for
system -wide
decommissioning
• EV charging fully
replaces gas fueling
stations
• Focus on hardest -to-electrify segments
such as restaurants,
high temperature
process heating, etc.
2025: 105K 2032: 270K 2038: 535K 2045: 1M +
Building a long -term path to deep decarbonization
requires a phased approach that eventually reaches all.
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PRESENTATION
16 How can we ensure progress when progress is
so uneven?
The updated Roadmap structure aims to tackle this challenge:
1. Proposed 2045 goal hones in on SVCE's areas of focus and makes long - term ambitions crystal clear.
2. Targets for appliances and vehicles combine with existing clean portfolio targets allowing us to measure our primary objective.
3. A phased approach assures that we are supporting structural change for long -term success.
4. Identifying specific outcomes for each phase helps measure progress when emissions are slower to move.
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17 Focus 2027 –2032: Develop
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PRESENTATION
18 The 2027 –2032 decarbonization principles articulate Board direction and inform all recommendations.
1. Build a long -term clean portfolio by pragmatically balancing risks and costs and selectively investing in innovative solutions.
2. Support and partner with member agencies to catalyze emissions reductions and scale decarbonization at a lower cost.
3. Focus on the most cost -effective and market -ready solutions to increase demand, drive down costs, and lead to widespread adoption.
4. Scale impact through knowledge sharing from the lessons learned from programs, research, and pilots.
5. Reach all of customers through SVCE programs, since all rely on fossil fuels and are part of successful decarbonization.
PRINCIPLES
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PRESENTATION
19 1. Integrate local resources
and demand flexibility
into portfolio planning
2. Push down building
electrification costs,
especially heat pumps
3. Increase access to
affordable, reliable EV
charging solutions
4. Scale impact through
knowledge sharing
2027–2032
Priorities
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PRESENTATION
Priority 1: Integrate local resources and demand
flexibility into portfolio planning
20 Challenge Statement
Rising load, tightening regulations, and market uncertainty are straining the path to clean portfolio targets. In addition to prudent portfolio management, new solutions — including supply closer to demand and the potential to leverage demand as a supply - side resource —could play a small, but important role, in long -term success.
Recommendations (2027 –2032)
1. Build a process to identify local energy projects that incorporate stakeholder input.
2. Quantify the real value of demand flex across multiple value streams —energy resource adequacy, hourly GHG, and customer benefits —and build SVCE -specific goals.
3. Scale demand flexibility where it is proven and cost effective; while sharing clear learnings to inform policy and market design.
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PRESENTATION
Priority 2: Push down building electrification costs,
especially heat pumps
21 Challenge Statement
High upfront costs are the fundamental barrier to adoption. Reduced federal rebates and policy changes magnify this issue, while the forthcoming air district appliance regulations create both additional opportunities and challenges.
Recommendations (2027 –2032)
1. Take a multi-pronged approach that includes contractor engagement, permit reform, and targeted rebates to increase demand and drive down cost.
2. Support customers, contractors, and Member Agencies to adapt to the Bay Area Air District zero -NOx appliance standards.
3. Prepare to phase out HVAC incentives as market reaches maturity.
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PRESENTATION
Priority 3: Increase access to affordable, reliable EV
charging solutions
22 Challenge Statement
The rollback of federal investment and commitments of auto manufacturers will likely slow EV adoption and makes the future of EV charging unclear.
SVCE needs to continue to support adoption while avoiding high -risk investments.
Recommendations (2027 –2032)
1. Focus on stable, reliable, long -term charging solutions.
2. Advocate policy changes that make charging more affordable for multifamily residents.
3. Monitor market changes and adapt programmatic support as needed.
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PRESENTATION
Priority 4: Scale impact through knowledge sharing
23 Challenge Statement
SVCE's Board has shown leadership and commitment to building a bold clean energy future. SVCE must leverage lessons learned to transform its commitment to trying new approaches into an invaluable resource that can guide the clean energy transition.
Recommendations (2027 –2032)
1. Publish 2–3 key learnings for decarbonization each year .
2. Operationalize annual decarbonization reporting metrics.
3. Incorporate findings from data and analysis to continuously improve programs and refine planning approaches.
Item 3
PRESENTATION
By focusing on key outcomes, SVCE will help move
the region from Develop to Deploy phase by 2033.
1. Identify at least 3 priority locations for sensible local generation development and implement feasible projects.
2. Quantify at least 2 cost effective pathways for incorporating demand flex into long -term clean portfolio.
3. Heat pump HVAC will outsell AC with gas furnaces with no incentives and HPWH retrofits will cost 20% less than today.
4. There will be twice the number of EV charging stations available to multifamily residents.
5. Publish 10 decarbonization learnings and share them with stakeholders on a statewide level.
OUTCOMES
Item 3
PRESENTATION
The most important part of a plan comes after it is
adopted.
25 The roadmap is being developed with implementation in mind. • Staff from across the organization have co -created the recommendations. • The final decarbonization roadmap will translate the four strategic priorities into detailed recommendations across 10 sectors. • The detailed recommendations are based on functional areas within SVCE so they are most effectively implemented by staff. • Staff will report on progress towards outcomes annually.
Item 3
PRESENTATION
The final roadmap will be brought to the Board discussion in September and for adoption in October.
*Timeline subject to change
BOD Study
Sessions: values
and priorities
Dec. 2025
MAWG and
Community
Leaders
workshops
Feb. 2025
Board info item:
Targets and
Pathways
Apr. 2026
EC discussion:
Vision and Role
Board item: final
roadmap for
adoption
Jun. 2026 Oct. 2026
EC discussion:
Targets and Pathways
Mar. 2025
EC: roadmap
recommendations
for discussion,
feedback and
action
Aug . 2026
26 Item 3
PRESENTATION
Staff request
27 Staff requests the SVCE Executive Committee:
Recommend that the Board of Directors approve the
proposed 2027 –2045 Decarbonization Roadmap
Recommendations, which include new goal, targets,
principles, priorities, and outcomes.
Item 3
PRESENTATION
28 APPENDIX
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PRESENTATION
29 0
50,000
100,000
150,000
200,000
250,000
300,000
2025 2030 2035 2040 2045
Total Cumulative Installed HPWHs
Projected SVCE Territory HPWH Installs by 2045
Market Sales (Baseline) Statewide Building Codes
Air District Rules Member Agency Code Enhancements
SVCE Rebates and Incentives SVCE Ecosystem Improvement
Innovation and Technology Improvements Targets 29
HPWH requires more innovation or funding, growth
driven by policy; SVCE plays critical role.
HPWH Pathway:
• Based on best
available market
studies, forecasts,
and program data.
• Conservative Air
District compliance
(starts at 20%) grows
slowly.
• Current SVCE
program budget.
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PRESENTATION
30 0
100,000
200,000
300,000
400,000
500,000
2025 2030 2035 2040 2045
Total Cumulative Registered EVs
Projected SVCE Territory Light -duty Electric Vehicles by 2045 Market Sales (Baseline) Statewide Building Codes
Member Agency Code Enhancements SVCE Rebates and Incentives SVCE Ecosystem Improvement National Market Changes
Targets 30
EVs have high uncertainty due to recent policy changes; SVCE’s role is important but less influential.
Consumer demand supported by
policies are the main driver in EV
adoption.
Statewide building code and
SVCE programs help grow
adoption by increasing access to
charging.
Recommitments to EVs at a
federal level are likely necessary
to meet 2045 targets.
Pathway based on current
budget.
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PRESENTATION
31 0
50,000
100,000
150,000
200,000
250,000
300,000
2025 2030 2035 2040 2045
Total Cumulative HP HVAC Installs
Projected SVCE Territory HP HVAC Installs by 2045
Market Sales (Baseline) Statewide Building Codes
Air District Rules Member Agency Code Enhancements
SVCE Rebates and Incentives SVCE Ecosystem Improvement
Targets
Consumer demand is
stronger for HVAC compared
to HPWH as HP HVAC is
more cost competitive and
delivers real individual value
today.
Statewide, Air District, and
local polices key to adoption.
Pathway reflects rebates
ending after 2033.
31 HP HVAC is on track; policy + AC demand key driver;
SVCE support can phase out sooner.
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PRESENTATION
32 Key Assumptions and Methodology Overview
Methodology was built on data and published studies whenever possible, and conservative but realistic estimates where needed.
Category Source
Market Sales (Baseline) California Heat Pump Partnership Blueprint (2025) CalMTA Induction Cooking Market Characterization Report (2024) BloombergNEF Vehicle Sales Outlook (2025)
CalMTA Commercial Rooftop Units Market Characterization Report (2025) SVCE Programs SVCE 2025 Programs impact data
Statewide Building Code Housing and Community Development (HCD) RHNA Data with SME assumptions for new construction compliance
Air District Bay Area Air District Rules 9 -4 and 9 -6 with SME assumptions for starting compliance and annual compliance growth
Member Agency Codes City of Mountain View reach code forecast Electric Readiness and 2 -Way AC ordinances with SME assumptions for starting compliance and annual compliance growth
Policy Compliance Support SVCE SME assumptions
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PRESENTATION
33 Current sector allocation aligns with recommendations; some shifting needed within sectors.
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PRESENTATION
34 Consumer demand alone won't achieve targets.
Sources:
1. California Heat Pump Partnership Blueprint (2025)
2. CalMTA Induction Cooking Market Characterization Report (2024)
3. BloombergNEF Vehicle Sales Outlook (2025)
0%
20%
40%
60%
80%
100%
Water Heating Space Heating Cooking Vehicles
Percent Total Machines Electrified
Percentage of Total Machines Electrified by 2045 through Natural Market Adoption
34 Item 3
PRESENTATION
35 Climate targets require electrifying >1M appliances
and cars by 2045.
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PRESENTATION
36 SVCE influences over 90% of residential emissions,
but less than 60% of non -residential emissions.
Sources:
1. SVCE 2024 GHG Inventory
2. CEC Commercial End -Use Survey (CEUS)
3. SVCE 2022 Market Segmentation Study
36 Note: percentage emissions by end -use category are estimates and intended to be illustrative.
Residential Building
emissions influenced
by current
SVCE Programs: 93%
Non-Residential
Building emissions
influenced by current
SVCE Programs*:
58%
*Lower percentage due to
lack of market -ready
electrification solutions for
industrial and food service
sectors.
Item 3
PRESENTATION
• Subtitle
New SV Clean Energy
PowerPoint Template
ERM Policy
Revision Review Discussion
Scott Wrigglesworth
August 28, 2026 – Executive Committee
Item 4
PRESENTATION
2 ERMP Review Requirement Title of the Page
Item 4
PRESENTATION
3 Title of the Page
3 Substantive
Changes
Item 4
PRESENTATION
4 Policy Revision #1
Derivatives not Speculation; Affirm Non-Speculation (section 6.3) ERM Item Revisions/Review/Discussion
Change: Remove inference that derivative financial products are inherently speculative. Still prohibit derivatives (no change). Affirm and clarify speculative vs non-speculative.
Rationale: Financial derivatives are not speculative or non-speculative.
Benefit: Sound policy, clarity.
Recognizing compliance obligation along side supply & demand balancing.
Item 4
PRESENTATION
5 Policy Revision #2
Raising Threshold Mandated Length (section 6.4)
ERM Item Revisions/Review/Discussion
Change:
Increased the max Net Open Position Tolerance Bands to 110% for all year due to the need to comply with RPS long-term contracts and acknowledgement of PCIA as a financial hedge. (No change to minimum levels). Allows for a compliance obligation exception.
Rationale: Last policy update added the PCIA hedge but did not contemplate out year implications versus thresholds.
Benefit: Makes the thresholds consistent with the addition of the PCIA hedge.
Item 4
PRESENTATION
6 Title of the Page
6 Non-Substantive
Changes
Item 4
PRESENTATION
7 Non-Substantive Revisions
(Detail in Appendix)
Topic Reason
Solicitation Technical alignment that procurement involves solicitations Load Risk Added load risk language to acknowledge potential coming/going of large loads Product List Cleaned-up redundant items and increased clarity CRRs Added explanation of what CRRs are and what they do Auction vs Allocation Clarified that delegated authority applies to CRR Auctions, and that CRR Allocations are a zero-cost item provided to SVCE based on load it serves Adjusted footnote Clarified footnote language for CEO delegated authority as it was leading to confusion among staff
No financial holding Revised COI language to change ‘direct holdings’ to ‘financial interest’ to align with proper legal terminology
Item 4
PRESENTATION
8 Recommendation:
Staff requests that the Executive Committee (Committee) recommend that the Silicon Valley Clean Energy (SVCE) Board of Directors (Board) approve proposed amendments to the Board-adopted Energy Risk Management Policy.
Next Steps:
1. Seek Board for approval on consent in September
2. Modify internal standards to conform with changes
Recommendation and Next Steps
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PRESENTATION
9 Title of the Page
9 Appendix:
Non-Substantive Changes
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PRESENTATION
10 Policy Revision #3
Solicitation Language (section 1.2)
ERM Item Revisions/Review/Discussion
Change: Added “solicitations” to the scope of the document.
Rationale: Introducing clarity that proper solicitation processes are referenced in policy.
Benefit: Affirms procurement diligence even if supply cost is an exception to normal procurement.
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PRESENTATION
11 Policy Revision #4
Load Risk (section 5.6)
ERM Item Revisions/Review/Discussion
Change: Acknowledge that load risk includes the coming and going of large customer loads.
Rationale: Non-weather load risk that forecast could be unknowingly off due to customer decisions.
Benefit: Transparency regarding non-weather load risk.
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PRESENTATION
12 Policy Revision #5
Product Table (section 6.3)
ERM Item Revisions/Review/Discussion
Change: Revised product list for clarity & removed
redundant references.
Rationale: Clarity and conciseness (no new products,
none removed).
Benefit: Tightens list to align to proposed updates to
the standards for clarifications to staff.
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PRESENTATION
13 Policy Revision #6
Table 5 Clarify “CRR Allocation vs Auction” (section 6.4 and 6.5.2) ERM Item Revisions/Review/Discussion
Change: Added definition of CRRs, and clarified table and footnote on differences for CRR Auction and Allocation.
Rationale: Clarity and to acknowledge that allocations are granted and come at no cost; the CRR limits therefore are limited to auction transactions.
Benefit: Clarity.
Continued on next slide
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PRESENTATION
14 Title of the Page Policy Revision #6 continued
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PRESENTATION
15 Policy Revision #7
Table 5 Clarify “Cumulative” (section 6.5.4)
ERM Item Revisions/Review/Discussion
Change: Clarified table and table footnote.
Rationale: Delegation of authority is to be per transaction.
Benefit: Clarity for staff as the term cumulative was being misunderstood.
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PRESENTATION
16 Policy Revision #8
COI Language (section 6.6)
ERM Item Revisions/Review/Discussion
Change: Clarified employees cannot have a “financial interest” that is in conflict with SVCE, but pragmatically softens language related to “direct holdings”.
Rationale: Employees or employee family members may have direct holdings as part of larger personal portfolios or as compensation that do not pose a conflict of interest.
Benefit: Not excessively burdensome.
Item 4
PRESENTATION
• Subtitle
New SV Clean Energy
PowerPoint Template
Demand Flexibility and
DERMS Update
Joey Lande and Alisha Pegan
August 28, 2026
Item 5
PRESENTATION
• Key Takeaways
• Recap Demand Flexibility Intentions and
Projects
• Review DERMS Costs and Savings Analysis
• Recommendation and Discussion
Agenda
2 Item 5
PRESENTATION
3 Key Takeaways
Demand Flexibility Intent: In June 2025, the Board of Directors authorized the CEO to negotiate and execute a $971,238 contract with Lunar Energy for programs services and a Distributed Energy Resources Management System.
Progress Update: Staff analyzed dozens of scenarios to quantify financial value of Demand Flexibility to SVCE. Generally, demand flexibility programs are more expensive relative to standard power supply alternatives.
Recommended Next Steps: SVCE's findings are unique and generating new conversations. Staff recommend pausing program development with Lunar, and share findings with external stakeholders and regulators.
Item 5
PRESENTATION
Demand Flexibility Recap
4 Item 5
PRESENTATION
5 Key Terms
• Load: a measure of electricity required by equipment or facilities at a specific moment or across a time period (e.g. load shape) • Demand Flexibility (DF): the capability of devices and/or customers to shed or shift load, in response to signals reflecting prices or supply constraints on the grid
• Distributed Energy Resources (DERs): small-scale energy systems or equipment that can supply power or can be managed, such as batteries, EVs, heat pumps, and smart thermostats • Distributed Energy Resource Management System (DERMS): a software platform designed to register, monitor, aggregate, and control distributed energy resources (DERs)
• Virtual Power Plant (VPP): a network of distributed energy resources that are connected and managed by software to operate like a single, coordinated power plant
• Load Management Standards (LMS): California Energy Commission regulation requiring load serving entities to offer customers an hourly, dynamic rate, or program that responds to an hourly price signal • Dynamic Rates: time-varying rates, including time-of-use rates and hourly dynamic rates, that adjust based on wholesale market prices, constraints, availability, and other factors, instead of a fixed rate for a set period • Capacity (MW): the maximum amount of electricity a resource can produce when operating at full output. Measuring capacity is critical for grid planning, and matching supply to demand to ensure reliability of the power grid.
Item 5
PRESENTATION
SVCE Demand Flexibility Timeline
SVCE is a leading CCA in piloting new demand flexibility approaches 2019: SVCE
publishes the
VPP Options
Analysis
2020: SVCE
procures 1 MW
load modifying
capacity from
Sunrun
2021: SVCE
launches
Gridshift EV
Managed
Charging
Program
2023: CEC
targets 7GW of
Flexible Capacity
by 2030
2024:
SVCE implements
the PG&E
dynamic rate
pilot for LMS
Compliance
June 2025:
Demand
Flexibility/DERMS
contract
executed with
Lunar
July 2025:
SVCE partners
w/Renew Home
to assess load
shifting
Item 5
PRESENTATION
7 SVCE Demand Flexibility North Star
Aim: enable SVCE to provide all customers with the ability to earn savings by easily, automatically and comfortably flexing their electricity use daily
• contribute to a reliable and clean grid
• generate operational value for SVCE
Target: After many pilots, SVCE’s focus became scaling
• Enroll 30MW of demand flex capacity by 2030
N
Item 5
PRESENTATION
SVCE
DERMS
Platform
Customers • Communication to devices and
providers
• M&V, settlement
• Centralized project tracking
OEMs
Aggregators
What is a DERMS and why has SVCE pursued one?
Residential
C&I
Role of a Distributed Energy Resource Management System (DERMS) • Dispatch instruction
• Incentive/Settlement
Enrollment Data
• Dispatch devices
• Data collection and
measurement
• Program development
• Customer recruitment
• Dispatch devices
• Dispatch Signals
• Integrations and
data
• M&V
Item 5
PRESENTATION
9 Partnership with Lunar Energy
Contract Summary
5-year Master Services Agreement for a Distributed Energy Resources Management System (DERMS), and programmatic services to support SVCE's demand flexibility goals.
Key Elements
• DERMS Software
• Program design services, modeling value of demand flexibility • Contract structure for integrating end-use loads from SVCE decarbonization programs with the DERMS
• Contract structure for developing and launching new flexibility programs Item 5
PRESENTATION
10 Demand Flexibility Costs & Savings
T&D Benefits
IOUs
• Avoided energy costs
• Avoided capacity costs
• Avoided REC costs (if applicable)
Generation Benefits
CCAs
• Bill savings
• Increase ROI on equipment
• Other benefits, emissions, quality
of life, etc.
End User Benefits
Customers
• Avoided distribution upgrade costs
• Avoided transmission upgrade
costs
What is the operational value for SVCE?: Power supply benefits are greater than costs to fund program
Program Costs to SVCE: Software costs for DERMs, program implementation (administrative, fees, M&V), customer incentives (upfront and/or ongoing performance payments) Savings to SVCE: Avoided energy costs, avoided capacity costs, avoided renewable energy credit (RECs) costs, if applicable
Item 5
PRESENTATION
11 Step 1: Model load impact scenarios with Lunar
• Determine representative load profiles and dispatch parameters • Incorporate customer tariff, vintage, generation, etc.
Step 2: Analyze SVCE savings with the Financial Valuation Tool • SVCE staff developed a new tool, incorporating capacity, energy, RECs, export credits under different versions of NEM
• Paired with results of the load impact modeling, the tool helps unpack the financial impact of different project scenarios to SVCE Demand Flexibility Implementation
Assess SVCE value to determine reasonable budget proposals Item 5
PRESENTATION
Valuation Results
12 Item 5
PRESENTATION
Program Evaluation Results
• EV Energy
partnership
• 5-Year pilot
• Avoided energy
costs
Managed
EV Charging
>10X
More expensive
Resi Battery
Storage
9X
More expensive
• DERMS integrated
• 50 load flex events
per year
• 30 MW program
• DERMS integrated
• CAISO Market
integrated (more
revenue)
• 30 MW program
size
C&I Demand
Response
8X
More expensive
• Non-DERMS
integrated
• 7 Events in 2025
• Avoided energy
costs
Smart
Thermostats
8X
More expensive
Primary flexibility programs are currently more expensive than Power Supply options Item 5
PRESENTATION
14 The Benefits of Flexing Resi Batteries
Standard Customer
Base Case
Reference case for
margins comparison
Solar & Storage
-$138
Export prices greater
than wholesale prices
50 Flex Events/Yr
-$20
Reduces SVCE benefits
Load flexing leads to negative SVCE margins for an avg residential customer 2026
Margins
Standard Customer
Base Case
Reference case for
margins comparison
Solar & Storage
$721
Avoid future REC prices,
export prices decrease
overtime
50 Flex Events/Yr
-$69
Reduces SVCE benefits
7Yr NPV
Margins
Margins = Revenue + Power Supply Benefits – Export Compensation – Power Supply Cost incremental
change
incremental
change
incremental
change
incremental
change
A customer with a new solar and storage system receives export compensation under the updated version NEM, referred to as NEM 3.0, Net Billing Tariff, or Solar Billing Plan. SVCE’s explored the financial impacts of battery adoption under NEM 3.0.
Item 5
PRESENTATION
15 Flexing Does Not Improve Benefits
Dispatching to SVCE cost curve does not increase savings to SVCE Standard Customer
Base Case
Reference case for
margins
Solar & Storage
$721
Avoid future REC prices,
export prices decrease
overtime
200 Flex Events/Yr
- $119
More dispatches reduce
benefit to customer and
SVCE
7Yr NPV
Margins
Standard Customer
Base Case
Reference case for
margins
Solar & Storage
$721
Avoid future REC prices,
export prices decrease
overtime
Self-Consumption
$281
Battery optimized for
home usage, not exports
7Yr NPV
Margins
200 Events
Self-Consumption
incremental
change
incremental
change
incremental
change incremental
change
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16 Program Cost Analysis
Resi Solar + Storage C&I Demand Response
Modeled value of different programs connected to DERMS
$(1,374,000) $(135,000)
$(1,260,000)
$(3,000,000) $(5,769,000)
Demand Flex Benefits
DERMs Software Costs
Program Implementation …
Customer Incentive Costs
Program Sum Total
$-
$(1,000,000)
$(2,000,000)
$(3,000,000)
$(4,000,000)
$(5,000,000)
$(6,000,000)
$(7,000,000)
Avg Annual Program Costs for 30 MW Resi Solar and
Storage Program with 50 Load Flexibility Events
Increase Decrease Total
$676,000
$(135,000)
$(892,500)
$(3,000,000) $(3,351,500)
Demand Flex Benefits
DERMs Software Costs
Program Implementation …
Customer Incentive Payments
Program Sum Total
$(4,000,000)
$(3,500,000)
$(3,000,000)
$(2,500,000)
$(2,000,000)
$(1,500,000)
$(1,000,000)
$(500,000)
$-
$500,000
$1,000,000
Avg Annual Program Costs for 30 MW C&I CAISO Demand
Response Program with 50 Load Flexibility Events
Increase Decrease Total
Different methodologies applied to calculate the benefits of demand-side vs supply-side programs Item 5
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Summary and
Recommendation
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18 What Others Are Doing
• Establish the value of load-modifying capacity using different methodologies
• Leverage external funding
• Unclear how detailed other analyses
have been
• Weekly discussions with other CCAs,
effort to align on methods underway
• Rely on public purpose funding for
demand flexibility
• Stated program cost per kW are
close to SVCE's forecasts, however;
• The benefits are projections from
the state's Avoided Cost Calculator,
which:
• Includes comprehensive benefits
• Even for benefits we do accrue
(e.g. capacity), the ACC values
are higher than our own
CCAs IOUs
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Staff Recommendations
Pause DERMS program development, but keep the contract
• Revisit initial target of 30 MW of flexible capacity
• Define and monitor market conditions for when benefits would outweigh costs • Explore grants and funding opportunities
• Investigate implications for Load Management Standard and SVCE Rates strategy Amplify Findings & Innovate
• Publish findings and share learnings with stakeholders and regulators in collaboration with other CCAs and technical experts
• Advocate for solutions in existing Regulatory Proceedings 19 Item 5
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II
Thank you!
Questions?
20 Item 5
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