Item 12
1 VALLEY CLEAN ENERGY ALLIANCE
Staff Report – Item 12
TO: Board of Directors
FROM: Edward Burnham, Director of Finance & Internal Operations Mitch Sears, Executive Director
SUBJECT: Approve and Adopt Strategic Plan Guidelines
DATE: July 13, 2023
RECOMMENDATIONS
Approve the attached resolution adopting the Strategic Plan Update Guidelines for VCE.
OVERVIEW
The purpose of this report is to present an updated approach and timeline for extending the 2021-2023 Strategic Plan beyond the current end of the planning period (end of 2023) and a process for developing future plans as described in the attached strategic plan guidelines.
BACKGROUND
The Board ratified the VCE Three-Year Strategic Plan (Plan) for 2021-2023 at it’s November 12, 2020 meeting (VCE-Strategic-Plan-Final.pdf (valleycleanenergy.org). The purpose of the Strategic Plan “Plan” is to focus VCE on achieving better energy outcomes for its customers and communities by guiding the organization’s actions. The Strategic Plan is aligned with VCE’s mission and vision and guides the organization’s efforts over a multi-year time horizon. The Plan is the basis for developing annual organization goals, staff work plans, annual budgets, key decisions, and priorities. The Plan also informs the development of VCE’s compliance documents, including the Integrated Resource Plan (IRP), a document that sets out a 10-year roadmap for energy procurement that is updated on a 2-year basis.
The initial Strategic Plan covered a fixed period from 2021 to 2023. Based on Board feedback on the approach for extending the Strategic Plan beyond the end of 2023, Staff presented an action plan to adopt one-year extensions each year so that the Plan would always be 1+ years from expiration to maintain a three-year outlook starting in 2023. Upon further consideration and feedback from Community Advisory Committee Strategic Plan Task Group, Staff recommends extending the 2021-23 plan through 2025 and include a minor update as part of that process. After that, Staff recommends that the Strategic Plan be updated every four years so that it does not fall on years that also require updates to VCE’s Integrated Resource Plan (IRP). In addition, Staff will review and report annually to the Board and CAC on the status of goals, objectives and metrics. Staff believes this modified approach balances the advantages of keeping the Plan up to date and providing the value of longer-term planning while not overburdening the organization with redundant activities.
Item 12
2 Staff and the Community Advisory Committee Strategic Plan Task Group have developed the attached strategic plan guidelines to provide a framework for sustaining VCE’s strategic plan. At the June 22, 2023 CAC meeting, Staff presented the draft strategic plan update guidelines for their input.
Community Advisory Committee Recommendation
The CAC recommended approval of the draft strategic plan update guidelines with no recommended changes.
CONCLUSION
If adopted by the Board, the proposed Strategic Plan Update Guidelines represent a balanced, comprehensive approach to align the strategic plan with VCE’s multi-year time horizon and provide consistent update benefits associated with the “rolling” approach. If the Board approves the strategic plan guidelines, Staff will put the proposed timeline for extending the existing strategic plan with a minor update as outlined in the guidelines into motion.
Attachments
1. Draft Strategic Plan Update Guidelines
2. Resolution adopting Strategic Plan Update Guidelines Strategic Plan Update Guidelines
Purpose
The Strategic Plan Update Guidelines provide a framework for carrying out Major and Minor Plan Updates and reporting on the progress of VCE towards its strategic goals.
Overview of VCE’s Strategic Plan
The purpose of the Strategic Plan “Plan” is to focus VCE on achieving better energy outcomes for its customers and communities by guiding the organization’s actions. The Strategic Plan is aligned with VCE’s mission and vision and guides the organization’s efforts over a multi-year time horizon. The Plan is the basis for developing annual organization goals, staff workplans, annual budgets, key decisions, and priorities. The Plan also informs the development of VCE’s compliance documents, including the Integrated Resource Plan (IRP), a document that sets out a 10-year roadmap for energy procurement that is updated on a 2-year basis.
The Plan maps a route to VCE’s goals and allows for course correction as new information and learning occur. The energy sector in California is in a transformational period, and VCE allows local energy priorities and needs to be heard and ultimately acted upon. This Plan helps VCE build a strong foundation from which to identify and guide strategic action, being mindful of the longer-term aspirations. The Plan is reviewed annually to ensure that the Plan remains on track and course corrects when necessary.
Background of the Initial Strategic Plan (2021-2023)
The Board ratified the initial VCE Three-Year Strategic Plan (Plan) for 2021-2023 at the November 12, 2020 meeting (VCE-Strategic-Plan). VCE’s initial strategic Plan was based on the experience of the Agency’s first two years (2019-2020) in operation as well as current energy market conditions, a strengths/weaknesses/opportunities/threats (SWOT) analysis which was completed in 2019, and detailed feedback from the Board of Directors, Community Advisory Committee (CAC) members and VCE staff. The Plan covers six topical categories which are most relevant to VCE’s operations. Within each category, the Plan specifies a set of aspirational goals and follows with strategies to achieve or make progress toward those goals from 2021-2023.
Strategic Plan Definitions
Categories – Plan categories are key areas of focus or priorities that VCE has chosen to act as VCE’s foundational pillars for Plan development to achieve its long-term vision.
Goals - Plan goals are aspirational ambitions outlined for each category to provide guidance through the end of the Plan.
Objectives - Plan objectives are high-level and measurable outcomes outlining what VCE wants to achieve within the plan goal.
Strategies – Plan Strategies are where VCE aligns their efforts in order to achieve the desired outcomes that will bring about the achievement of the organization’s goals and objectives.
Strategic Plan Categories and Goals (2021-2025)
Background of the Strategic Plan Guidelines
The initial Strategic Plan covered a fixed period from 2021 to 2023. Based on Board feedback on the approach for extending the Strategic Plan beyond the end of 2023, Staff presented an action plan to adopt one-year extensions each year so that the Plan is always 1+ years from expiration to maintain a three-year outlook starting in 2023. Upon further consideration and feedback from Community Advisory Committee Strategic Plan Task Group, Staff recommends extending the 2021-23 plan through 2025 and include a minor update as part of that process. After that, as shown in the table below, Staff recommends Strategic Plan updates every four years to set the cadence for future updates to fall on years that do not require updates to VCE’s Integrated Resource Plan (IRP). In addition, Staff will review and report annually to the Board and CAC on the status of goals, objectives and metrics.
Strategic Plan Update Schedule
Key Objectives of Strategic Plan Minor Updates
Minor Update – The purpose would be a relatively high-level review/update to existing goals and objectives performed by Staff to incorporate plan adjustments associated with changing legislative, regulatory, customer, economic, etc. requirements, as well as plan milestones achieved. Key activities would include:
• Evaluate Strategic Plan to update and re-align strategic goals and objectives where necessary. • Short-term adjustments based on changed external/internal requirements and recent accomplishments.
•Goal: Maintain and grow a strong financial foundation and manage costs to achieve long-term organizational health. FINANCAL STRENGTH •Goal: Manage power supply resources to consistently exceed California’s Renewable Portfolio Standard (RPS) while working toward a resource portfolio that is 100% carbon neutral by 2030.
PROCUREMENT AND POWER SUPPLY
•Goal: Prioritize VCE’s community benefits and increase customer satisfaction and retention. CUSTOMERS AND COMMUNITY
•Goal: Promote and deploy local decarbonization and grid innovation programs to improve grid stability, reliability, community energy resilience, and safety.
DECARBONIZATION AND GRID
INNOVATION
•Goal: Strongly advocate for public policies that support VCE’s Vision/Mission.
STATEWIDE ISSUES: REGULATORY
AND LEGISLATIVE AFFAIRS
•Goal: Analyze and implement an optimal long-term organizational, management, and information technology structure at VCE.
ORGANIZATION, WORKPLACE, AND
TECHNOLOGY
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
Minor
Update
Major
Update
Minor
Update
Major
Update
Minor
Update
Major
Update
IRP WORK IRP WORK IRP WORK IRP WORK IRP WORK
Extension of 2021-2023 Plan Strategic Plan Strategic Plan Guidelines for Strategic Plan Minor Update
• VCE Staff
o Identify changes in the overall CCA environment (economics, policy, technology, etc.) and describe their relevance for VCE
o Review existing goals and objectives to identify and recommend adjustments Goal assessment using SWOT analysis as necessary
o Staff should propose recommendations to Executive Officer for minor updates. ▪ Recommendations should provide annual and long-term budget requirements • Community Advisory Committee
o Review and recommend revisions to strategic Plan minor updates. o Work with Staff to develop Strategic Plan goals and strategies • Board
o Review and approval of minor update revisions.
Timeline of Strategic Plan Minor Update
Key Objectives of Strategic Plan Major Updates
Major Update – The purpose would be a more detailed review/update of the Plan, including a review of VCE’s Vision/Mission and existing goals and objectives. Major Plan updates would be comprehensive reviews incorporating workshops at various levels of the organization, including community stakeholder engagement. The baseline activities would incorporate those enumerated in the Minor Update above (i.e. incorporate plan adjustments associated with changing legislative, regulatory, customer, economic, etc. requirements, as well as plan milestones achieved). Key activities in a Major Update would include:
• Identify changes in the overall CCA environment (economics, policy, technology, etc.) and describe their relevance for VCE (also listed as VCE Staff activity below) • Review key organizational fundamentals (Mission, Vision, and Strategic Plan Goals) January
Staff Minor
Update Kick-off
Meeting
March
Staff Strategic
Workshop
May
Staff Preliminary
report to
Executive Officer
July
Finalize Staff
Minor Update
August
CAC Presentation
and Feedback
September
Board Presentation
and Feedback
November
Board Adoption
• Long-term adjustments based on strategic and customer requirements Guidelines for Strategic Plan Major Update
• VCE Staff
o Identify changes in the overall CCA environment (economics, policy, technology, etc.) and describe their relevance for VCE
o Review existing goals and objectives to identify and recommend adjustments Goal assessment using SWOT analysis as necessary
o Staff should propose recommendations to Executive Officer for Major updates. ▪ Recommendations should provide annual and long-term budget requirements o Identify, solicit, and include input from key stakeholders ▪ Surveys and/or community engagement should include initial staff recommendations to narrow the focus for annual updates. • Community Advisory Committee
o Review and recommend strategic plan goals and objectives o Formation of Strategic Plan Task Group
• CAC Strategic Plan Task Group
o Work with Staff to develop Strategic Plan goals and objectives o Provide input and feedback to Staff on the draft Strategic Plan to present to the CAC and Board
o Provide summaries and updates at monthly CAC meetings on Task Group activities. • Board
o Provide feedback to Staff on aspirational goals.
o Review and approval of the strategic Plan.
Timeline of Strategic Plan Major Update
January
Form CAC Task
Group
March
Survey /
Community
Feedback Review
June
Community
Stakeholder
Outreach
July
CAC Task Group
Review
August
CAC Review
September
Board Workshop
November
Board Adoption
Continuous improvement and reporting for Strategic Plan Update VCE’s Strategic Plan is a living document that will be revisited and updated regularly. Staff will perform minor updates that review and update the Plan on an bi-annual basis, including goals, objectives and metrics. VCE staff will report annually key metrics, status and mitigations where appropriate annually to the Board and CAC. Consolidated summary reporting on the status of all high-priority enterprise goals and objectives will be reported out as follows:
• Quarterly Report to VCE Management - Staff will report quarterly to the Executive Officer on the status of goals, objectives and metrics for which they are responsible. • Annual Report to Board and CAC - Staff will report annually to the Board and CAC on the status of goals, objectives and metrics.
Item 12
VALLEY CLEAN ENERGY ALLIANCE
RESOLUTION NO. 2023- ____
A RESOLUTION OF THE BOARD OF DIRECTORS OF VALLEY CLEAN ENERGY ALLIANCE
ADOPTING STRATEGIC PLAN UPDATE GUIDELINES
WHEREAS, The Valley Clean Energy Alliance (“VCE”) was formed as a community choice aggregation agency (“CCA”) on November 16, 2016, under the Joint Exercise of Power Act, California Government Code section 6500 et seq., among the County of Yolo, and the Cities of Davis and Woodland, to reduce greenhouse gas emissions, provide electricity, carry out programs to reduce energy consumption, develop local jobs in renewable energy, and promote energy security and rate stability in all of the member jurisdictions. The City of Winters, located in Yolo County, was added as a member of VCE and a party to the JPA in December of 2019; and, WHEREAS, the Board approved the Three year Strategic Plan for 2021-2023 on October 8, 2020, to establish goals and guide VCE’s activities over the next three years.
NOW, THEREFORE, the Board of Directors of Valley Clean Energy Alliance hereby adopts Strategic Plan Update Guidelines (Exhibit A) to establish an approach and timeline for updating and extending the 2021-2023 Strategic Plan beyond the current end of the planning period (end of 2023) and a process for developing future plans as described in the attached strategic plan guidelines.
PASSED, APPROVED AND ADOPTED, at a regular meeting of the Valley Clean Energy Alliance, held on the ____ day of _______ 2023, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
_____________________________________
Tom Stallard, VCE Chair
__________________________________
Alisa M. Lembke, VCE Board Secretary
Attachment: Exhibit A – Strategic Plan Update Guidelines Item 12
EXHIBIT A
STRATEGIC PLAN UPDATE GUIDELINES