Valley Clean Energy Board Meeting – Thursday, January 11, 2024 Item 12 – 2024 Customer Rates
1 yvonnehunterphotography.com
yvonnehunterphotography.com
PUBLIC COMMENTS
2 To Provide Public Comment on any agenda item please:
➢ E-mail 300 words or less to: [email protected] OR
If in person, complete a COMMENT CARD
OR
Join the Public Comment Queue by
➢ “Raising Hand” on Zoom Meeting
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➢ Press *9 if joining by phone
Emailed comments received before the item has concluded will be read into the record.
Emailed comments received after the item has concluded but before the end of the meeting will not be read but will be included in the meeting record.
ITEM X – SHORT TITLE AND SLIDE DESCRIPTION [CALIBRI (BODY) 29 FONT (NOT BOLD)]
3 Item 12 – 2024 Customer Rates
Overview
Staff is returning to the Board to recommend providing a 1% generation credit starting in 2024 for Standard Green customers based in part by additional 2023 financial actuals and PG&E’s additional Transmission/Distribution rate increase scheduled in March (projected +13%).
This presentation provides:
1. Brief Rates/Budget Background
2. Long-Term Outlook / Additional Steps
3. Recommended 2024 Customer Rates Adjustment
ITEM X – SHORT TITLE AND SLIDE DESCRIPTION [CALIBRI (BODY) 29 FONT (NOT BOLD)]
4 Item 12 – 2024 Customer Rates
VCE Cost-Based Rate Policy: (Update Adopted November 2021) • VCE will set customer rates to collect sufficient revenue from participating customers to fully fund VCE's Budget and establish sufficient operating reserve funds. • VCE’s 2023/24 Target was set to fully fund +180 days of operating cash reserves VCE 2024 Current Rates
• 5-7% generation rate increase - Avg. approx. $5 per month on Standard Green Residential
• 2.5% rate credits for low income and vulnerable customers (CARE, FERA, and Medical Baseline)
ITEM X – SHORT TITLE AND SLIDE DESCRIPTION [CALIBRI (BODY) 29 FONT (NOT BOLD)]
5 Item 12 – 2024 Customer Rates
2024 Rates & Budget Background: Key objectives
• Operating Days Cash – Maintain Board approved cash target of +180 days • Debt Repayments – Early repayment of term loan with River City Bank in 2023. (Completed) • Power Cost Contingencies – (Increased)
• Operational Contingency 5%/ $3.6 M
• $1.5M for 2024 Resource Adequacy (RA) and Renewable Energy Certificates (RECs) • Power Purchase Agreement (PPA) Covenants – Maintain PPA covenants (no letters of credit) • Investment Grade Credit Rating – Update Timeline (Possible 2025) • Customer Programs and Dividends (Increased)
• $2M in programs budgeted for 2024
• Customer Programs and Dividends Policy - Q2 of 2024 (2023 audited financials) ITEM X – SHORT TITLE AND SLIDE DESCRIPTION [CALIBRI (BODY) 29 FONT (NOT BOLD)]
6 Item 12 – 2024 Customer Rates
Long-term Outlook: Fixed Price PPAs
• Will increase by ~114% in 2024
• 80%+ of VCE’s annual load by 2024
• Reduced VCE costs compared to current RPS and RA market costs • Significantly reduce volatility as VCE moves forward (smaller open position) – Note: new RA “Slice of Day” regimen begins in 2025 increasing RA market uncertainty.
VCE PPA Contributions (Risk Reduction )
*Willy 9 Chap 2 Solar PV + Storage Project (72 MW
PV /36 BESS / approx. 215,000+ MWhs)
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
550,000
600,000
650,000
700,000
750,000
800,000
850,000
900,000
950,000
1,000,000
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 MWh
Renewable 13% 18% 54% 80% 82% 85% 86% 83% 80% 77%
Annual RPS Position
Fish Lake Contracted
Ormat Contracted
Willow Springs Contracted
Gibson Contracted
Resurgence Contracted
Putah Creek Contracted
Indian Valley Contracted
Aquamarine Contracted
Short-Term RECs
VCE Retail Load
RPS Requirement
Description 2023 2024
Power Costs
Began 2023 with PPAs for
~150+ GWh
(approx. 13% of VCE
annual Load)
*Begin 2024 with PPAs
for ~400+ GWh
(approx. 50% of VCE
annual Load)
Power Cost
Contingencies
PPAs provide 75 MW RA
(approx. 36% of VCE
annual req.)
PPAs provide 143 MW RA
(approx. 70% of VCE
annual req.)
VCE Current Renewable Portfolio Trajectory
Actuals Budget
Description 2022 2023 2024 2025 2026 2027
Customer Revenue 85,323 96,250 106,500 99,810 108,300 103,950 Power Cost 75,130 72,500 75,200 62,700 66,300 68,300
Other Expenses 4,469 6,100 6,800 7,200 7,600 8,000
Net Income 5,724 17,650 24,500 29,910 34,400 27,650
Gross Margin 12% 25% 29% 37% 39% 34%
Net Margin 7% 18% 23% 30% 32% 27%
2023 Proforma
(10 Month Actuals +
2 Month Budget) Preliminary Forecast*
ITEM X – SHORT TITLE AND SLIDE DESCRIPTION [CALIBRI (BODY) 29 FONT (NOT BOLD)]
7 Item 12 – 2024 Customer Rates
Updated Multi-Year Forecast
Note: Forecasted financials are based on the most current available data and assumptions. These scenarios rely on future rate adjustments, reserves, or both to mitigate future power cost volatility.
Addition Programs & +180 Days Operating Cash Reserve Policy & Margin Targets ITEM X – SHORT TITLE AND SLIDE DESCRIPTION [CALIBRI (BODY) 29 FONT (NOT BOLD)]
8 Item 12 – 2024 Customer Rates
Proposed Rate Adjustment: Key Considerations
• Disciplined and financially prudent approach to providing consistent rate relief (Savings compared to PG&E). • 2024 financial objectives remain whole with the proposed revenue reduction • Reach current target of 180 Days Operating Cash by the end of 2024 • Current Year Net Income -> Following Year Program Fund • Longer-term outlook (2024+) shows increased stability and cost certainty • VCE maintains Budget, Rates, Reserve, and Rate Adjustment System Policy standards.
Additional Rate Relief Steps
1. Customer Programs and Dividend Policy – 2023 net margin allocation (April 2024)
2. Assess PPA prepayment options for reducing power costs (April 2024)
3. Review Reserve Policy for updates (Investment grade credit rating & budget net margin targets) • 180 Days operating target (Credit rating - Initial Step / Min Level) • 180+ Days operating cash – rate stability fund (PCIA, regulatory, weather, and power cost volatility)
4. Rate Adjustment System does allow for reducing customer rates based on actual cost performance.
ITEM X – SHORT TITLE AND SLIDE DESCRIPTION [CALIBRI (BODY) 29 FONT (NOT BOLD)]
9 Item 12 – 2024 Customer Rates
Summary
Standard Green Rate credits are estimated at an average of 1%/$1.2 per month credit for residential customers on VCE’s default Standard Green rate for an annual cumulative savings of approximately $1M. Staff recommends continuing base green rate credits of 2.5% on generation for low income and vulnerable customers (CARE, FERA, and Medical Baseline) that make up over 25% of VCE’s residential customer base providing an additional savings of $650K
VCE Rates Recommendation
1. Standard Green Rates credits of 1% to PG&E 2024 generation rates.
2. Base Green Rate credits of 2.5% to PG&E 2024 generation rates a) Automatically provide CARE and FERA customers Base Green Rate (least cost option with standard green benefits)
Note: Increased CARE/FERA rate credits by 1% for a $300K annual revenue reduction 10 Valley Clean Energy Board Meeting – Thursday, January 11, 2024 Item 13 – 2023 Year in Review: Portfolio, Marketing and Outreach, Programs, and Finance
Public Comments
12 To Provide Public Comment on any agenda item please:
➢ E-mail 300 words or less to: [email protected] OR
Join the Public Comment Queue by
➢ “Raising Hand” on Zoom Meeting
OR
➢ Press *9 if joining by phone
Emailed comments received before the item has concluded will be read into the record.
Emailed comments received after the item has concluded but before the end of the meeting will not be read but will be included in the meeting record.
12 2023 Year
in Review:
Impact
Item 13 – 2023 Year in Review: Portfolio, Marketing and Outreach, Programs, and Finance Leadership among CCAs Award-Winning Programs 5 Years of Serving Our Member Communities
Photo:
YvonneHunterPhotography.com
13 Photo: YvonneHunterPhotography.com
2023 Year in
Review:
Portfolio
Item 13 – 2023 Year in Review: Portfolio, Marketing and Outreach, Programs, and Finance Photo: YvonneHunterPhotography.com
14 Photo: YvonneHunterPhotography.com
Item 13 – 2023 Year in Review: Portfolio, Marketing and Outreach, Programs, and Finance Photo: YvonneHunterPhotography.com
• Established a new VCE target of 100% renewables
with a 25% local storage component.
• Successful transition from SMUD to The Energy
Authority (TEA) resulting in cost savings, efficiencies and additional services.
• Gibson project final permit approvals and pursuing
microgrid funding opportunities
Item 13 – 2023 Year in Review: Portfolio, Marketing and Outreach, Programs, and Finance Future Gibson Ranch Site
Portfolio Highlights
Photo: YvonneHunterPhotography.com
Item 13 – 2023 Year in Review: Portfolio, Marketing and Outreach, Programs, and Finance Project size: 90 MW PV + 75MW BESS
COD: BESS/PV –July/Aug 2023
Resurgence I & II. VCE’s share is approx. 2/3rd of above photo.
Willy 9 Chap 2. Formerly Willow Springs Solar Project. CAISO requested revised naming convention. PV portion is complete and is in commercial operation. BESS is awaiting final approvals.
Project size: 72MW PV + 36MW BESS
COD: PV delivering energy 1/1/24
17 Photo: YvonneHunterPhotography.com
2023 Year in
Review:
Marketing
& Outreach
Item 13 – 2023 Year in Review: Portfolio, Marketing and Outreach, Programs, and Finance Photo: YvonneHunterPhotography.com
Events: 8 events; 10,000+ people reached
(including media, in-person)
Media: 6 press releases, 8 press placements, 2
op-eds, 200 media contacts
Customer inquiries: rapid, tailored responses with
emphasis on authenticity and engagement
Outreach: Meeting Our Customers Where They Are
Photo: YvonneHunterPhotography.com
Item 13 – 2023 Year in Review: Portfolio, Marketing and Outreach, Programs, and Finance Photos:
YvonneHunterPhotography.com
Events: (4) Downtown Woodland Food Truck
Mania, Downtown Winters Fourth Friday Festival,
5-Year Anniversary Event in Davis; 5-year
anniversary event at Board meeting
Media: Davis Enterprise
Impact: Exposure – 6000+ (including media, in-person), 60 EV experiences (including test drives) Outreach Spotlight: VCE’s 5-Year Anniversary
Photo: YvonneHunterPhotography.com
Item 13 – 2023 Year in Review: Portfolio, Marketing and Outreach, Programs, and Finance Photos: YvonneHunterPhotography.com
20 Photo: YvonneHunterPhotography.com
2023 Year in
Review:
Customer
Care
Item 13 – 2023 Year in Review: Portfolio, Marketing and Outreach, Programs, and Finance Photo: YvonneHunterPhotography.com
Item 13 – 2023 Year in Review: Portfolio, Marketing and Outreach, Programs, and Finance Customer Service Representative (CSR) Interactions
Year End Review Item 13 – 2023 Year in Review: Portfolio, Marketing and Outreach, Programs, and Finance Opt-outs & Opt-ups,
2023
Item 13 – 2023 Year in Review: Portfolio, Marketing and Outreach, Programs, and Finance Website Analytics: Page Views & Engagement
Average Time Spent on Websites
Across Industries: 53 seconds
(VCE: 1 minute 33 seconds)
E-Commerce Pages:
44 seconds-1
minute 22 seconds
Blog Posts: 2-5
minutes
(Likely VCE Home)
24 Photo: YvonneHunterPhotography.com
2023 Year in
Review:
Programs
Item 13 – 2023 Year in Review: Portfolio, Marketing and Outreach, Programs, and Finance Photo: YvonneHunterPhotography.com
Item 13 – 2023 Year in Review: Portfolio, Marketing and Outreach, Programs, and Finance AgFIT; Potential AgFIT Expansion
39 rebates awarded total; 8 low-income
Total awarded $109,500/$32,000 low-income
Program Highlights
REDWDS Grant provisionally approved
SACOG-funded EV Chargers
Ag and EV charger photos: YvonneHunterPhotography.com
26 Photo: YvonneHunterPhotography.com
2023 Year in
Review:
Finance
Item 13 – 2023 Year in Review: Portfolio, Marketing and Outreach, Programs, and Finance Photo: YvonneHunterPhotography.com
Item 13 – 2023 Year in Review: Portfolio, Marketing and Outreach, Programs, and Finance Finance Highlights
• $500K toward debt
• Early retirement of Term Loan – Debt Free
• $350K to Care/FERA discounts
• 90 Days Operating Cash
• Clean Financial Audit
• Reached $3M for Programs with $700K allocated to program reserve. • Compliance with All Debt and Power Purchase Agreement covenants • Implemented 3rd Customer Rate Option – Base Green