Item 12
VALLEY CLEAN ENERGY ALLIANCE
Staff Report – Item 12
____________________________________________________________________________________ TO: Board of Directors
FROM: Sierra Huffman, Sr. Financial Analyst
SUBJECT: Valley Clean Energy’s Policy regarding PG&E allocation of Greenhouse Gas (GHG)-free (Large Hydro and Nuclear) resources to Community Choice Aggregators DATE: December 11, 2025
RECOMMENDATION
1. Accept the 2026 allocation of large hydro GHG-free attributes;
2. Accept the 2026 allocation of nuclear power GHG-free attributes;
3. Authorize the Executive Officer to enter into an agreement(s) with PG&E to accept the 2026 Large Hydro and Nuclear GHG-free allocations
BACKGROUND and ANALYSIS
PG&E owns or contracts for several GHG-free resources, including nuclear from Diablo Canyon Power Plant. PG&E counts these resources on its power content label (PCL) to meet its GHG-free targets.
Historically, load serving entities (LSEs) paid for these same assets through the Power Charge Indifference Adjustment (PCIA), yet did not receive the GHG-free benefits – this included VCE.
In mid-2019, CCAs approached PG&E to discuss whether PG&E would be agreeable to selling energy from their large hydro facilities. PG&E ultimately refused to make sales in 2019 but subsequently approached CCAs and offered to allocate GHG-free resources (nuclear and large hydro) to CCAs and other eligible LSEs.
Beginning in 2020, the allocations became available and the VCE Board elected to receive the large hydro attributes. VCE received approximately 24,000 MWHs in 2020; 37,382 MWHs for 2021 (Feb - Dec); and 53,886 MWHs for 2022; and 83,073 MWHs for 2023, 79,109 MWHs in 2024, and approximately 64,065 MWHs in 2025. The final allocation quantity for 2025 will be available mid-April 2026.
Prior to 2024, VCE did not elect to receive the PG&E nuclear GHG-free allocation. Last year, regulatory and energy market changes prompted Staff to reassess the recommendation. CPUC Decision 23-12-036 and the extension of Diablo Canyon Nuclear Power Plant made it so that all CPUC-jurisdictional LSE customers pay the operational cost of Diablo Canyon (i.e. regardless of whether VCE accepts or rejects the attributes, VCE customers will still pay for it). Secondly, if VCE does not accept the allocations, then 2 PG&E will count VCE’s share of the GHG-free energy attributes on its PCL. Thirdly, as part of the regulatory change VCE has already been allocated resource adequacy (RA) capacity from Diablo Canyon for the 2026 RA compliance year, with an average of 8 MW of nuclear capacity per month (ranging between 7.61 – 11.07 MW). Given the above, many CCAs – including MCE, SCP, PCE, Ava, DCE, Pioneer, RCEA, and SVCE – have elected to accept both the large hydro and nuclear attributes.
In 2025, VCE elected to receive the nuclear GHG allocation. Over the year, VCE has received around 47,818 MWHs of nuclear attributes. The final allocation quantity will be available in mid- April of 2026.
There is no obligation to accept the allocation of GHG-free attributes. An LSE can choose to accept neither resource pool, one or the other, or both. The volume that each LSE receives will ultimately depend on the volume of electricity generated by each resource pool and the proportion of PG&E’s load served by the LSE.
TENTATIVE SCHEDULE
COMMUNITY ADVISORY COMMITTEE
At the November 20, 2025 Community Advisory Committee (CAC) meeting, Staff presented updated hydro and nuclear allocation and resource information consideration. The CAC supported Staff’s recommendation to accept both the hydro and nuclear allocations (7-1 vote).
RECOMMENDATION
Staff’s position on both the large hydro and nuclear allocations is consistent with the 2025 recommendation. Key factors include:
2026 GHG-Free Energy Sales (Allocation) Tentative Timeline Tuesday, November 4, 2025 · Notice and form 2026 Sales Agreement issued.
Friday, November 7, 2025 · Feedback on form Sales Agreement due to PG&E.
Up to Week of December 15,
2025 (ACTION REQUIRED)
· PG&E will provide Eligible LSEs Offers and a final version of 2026 Sales Agreement
· PG&E and Eligible LSEs will execute 2026 Sales Agreement January 1, 2026 (pending
execution of Sales
Agreement)
· Expected start of Delivery Period under 2026 Sales
Agreement
Week of June 15, 2026
(approximation)
· First Quarterly Report with estimated Allocation Amount will be distributed
On or about April 15, 2027 · Final Report will be distributed to participating LSEs 3 • VCE is using capacity from Diablo for resource adequacy (RA); many of VCE’s counterparts continue to elect to receive nuclear attributes; large hydro and nuclear improve VCE’s emission rate.
• The monetary value has improved over prior years. The large hydro allocations can be resold, but per the CPUC decision, the nuclear attributes cannot be resold.
Based on these factors, Staff believe that VCE is better served by accepting both the hydro and nuclear allocations for 2026. Staff is recommending that the Board:
1. Accept the 2026 allocation of large hydro GHG-free attributes;
2. Accept the 2026 allocation of nuclear power GHG-free attributes;
3. Recommend the Executive Officer enter into an agreement(s) with PG&E to accept the 2026 Large Hydro and Nuclear GHG-free allocations.