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2022 SEP 12 PM 3; 51
PASADENA 100
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September 12, 2022
By email
Dear Messrs. Kightlinger and Hormozi:
We write with respect to Agenda item #1 for the Municipal Services Committee (MSC) of the Pasadena City Council, scheduled for hearing on Tuesday afternoon September 13.
We are concerned that the company selected for the state mandated 2023 Integrated Resource Plan (IRP) consultancy, ACES, is ill-suited to the critically important task that our city faces: the necessaiy rapid transition to carbon-free electric energy.
There are 4 problems witli the staff memorandum (the Memo) and the selection of ACES:
lack of relevant experience;
• apparent bias in favor of gas (methane);
tlie lack of pertinent information in the Memo; and
lack of diversity and local candidate consideration.
We write to respectfully ask for your clarification and further intormation.
1. ACES does not appear to have relevant experience. The Memo has only 1 short paragraph consisting of only 2 sentences on ACES' experience, and neither sentence is infon'native. (See bottom of page 3, Memo). The first sentence states: "Since 2007, ACES has been awarded two multi-milUon wholesale energy contracts for resource trading and settlement services, cumiilali.vely vahiedat S! 2m." The second sentence refers to a contract unidentified except by an agreement number, price and its 2-year term. We assume that these are contracts between ACES and the City of Pasadena, but neither has anything to do with an IRP.
There is nothing in the Memo about ACES' qualifications or expertise to provide modeling and consulting services related to an 1RP.
Since the Meino provides no infoiTnation on relevant experience, Pasadena 100 researchers have resorted to looking at the ACES website and public documents to try to understand ACES' expertise. ACES' expertise is in "risk management" and "energy trading." The firm engages in "Energy Risk Management and Transaction Execution Services." Consistent with the contracts referenced above, ACES' expertise is in "resource trading and settlement services." The fii-m also is in the business of administering Requests for Proposal for other entities.
On the ACES website, there is a menu heading on "Environmental," but there is no reference to renewable energy other than trading in Renewable Energy Credits (RECs).
PASADENA 1001
ACES imp! eniented several services including market iclentificalion, purchase and sales hedging strategies, legislation analysis, and Renewable Energy Credits transaction services." hlU^^^^^ce^ww^cfflwvm'^mn^
We were unable to find a single reference on the website to ACES experience as consultants for an IRP process for a Calitornia publicly owned utility, or for any utility company.
The ACES vvebsite has a menu on Ponfolio Modeling. Listening to the video provided as the sole explanation under that heading, the only variables mentioned are cost, hedge positions, efficiency, markets and risk. Not a single mention is made of greenhouse gas emissions or climate change considerations in the tlve-minute video.
There is no mention of the Social Cost of Carbon calculation nor of any carbon free energy soureing knowledge or experience with current open computational models for the transition to renewable energy sourcing.
ACES appears to have no experience with modeling and strategy related to California's new interim deadlines for the transition to carbon free energy to be established by SB 1020.
There is no reference in the staff Memo or in the ACE;S public materials to expertise in distributed energy generation (UER) or storage and yet this is a critical area for strategic planning. How much DER will PWP rely on in a time wlien utility scale renewable may or may not be sufficient to assure reliability and resilience? We just. experienced an unprecedented heat wave that challenged our electricity supply. PWP acknowledged the important role ofDER in meeting that challenge. And yet ACES appears to have no expertise in distributed generation as a complement to utility scale supply.
Has ACES written or supported an Integrated Resources Plan for a publicly owned or investor owned utility company? The staff Memo does not say. It is incredible that the Pasadena City Council would be asked to approve a contract of this significance, not to mention the cost to the city ($427,200), without any infonnation on the consultant's relevant experience. For the Council to approve such a contract without further infbmiation would be in-esponsible.
Looking at the scoring sheet for bidders in Table A, it appears that ACES scored highest in cost, meaning that it was the lowest bidder by a small margin. (Three of the other bidders, out of six, are missing scores, making it likely that only 3 bidders were considered.) Given the importance of the IRP for our public health, property values and the very survival of our children, it should be clear that cost should not be the dispositive consideration.
2. ACES' focus on the transition from coal to natural gas and its rosy view of gas are worrisome. See: https://www.acespower.com/fuels/ This entire section on "fuels" talks only about the transition from coal to gas. Gas is primarily methane which is a potent contributor to greenhouse gas emissions. ACES, at least based on its website, seems mired in an old model- the days when people thought that gas was the "bridge" to the futiire. Now we know that gas is the path to the destruction ot our future.
PASADENA 1002
The ACES website contains a menu item on Fuels that is revealing. At the very top of this page, it begins by stating:
The United Slates generation fleet is highly dependent on natural gas, and is expected to become more dependent as the demand for power grows and building new coal-fired generation becomes increasingly diff'iciilt.
ACES is particularly adept at meeting the needs of those who own gas-fired generation, and can actively manage your natural gas assets. ACES can assist with the entire process, from natural gas generation plant development, transporlalion, and storage agreements, to the execution, transportation, and balancing of natural gas siipply.
In addition to ACES providing short-term optimizalion of natural gas assets, we also provide risk management solutions that. offer long-term siipply (.•erlainty for otherwise uncertain fuel prices.
We do this throiigh the development of long-term natiiral gas supply plans and hedge strategies.
IVhile naliiral. gas continues to fuel a larger portion of the overall U.S. generation fleet, coal-fired power plants continue to demand a large share of overall generation. ACES has the expertise to provide coal market intelligence, coal siipply and transportation strategy development, and coal supply and rail contract negotiations. In addition, ACES provides risk management and hedging services for fiiel oil exposure foiwd m many rail and coal contracts thatflvctuate with the price of crude oil."
The ACES approach to gas is well represented in this video which extols natural gas as "the most important fuel for generating electricity": hltps://www.acespower.coiT)/fuels/ To listen to this video, one would think that gas, a toxic poison, is a desirable modern energy source.
As you know, methane is a potent greenhouse gas with serious public health risks related to climate change, but also to human respiratory illness. ACES' focus on the transition from coal to gas shows a lack of understanding of the current crisis. The public desei-ves to know whether ACES has experience or even an interest in the transition from gas to carbon-tree energy.
ACES assertion of 'long-term supply certainty' for cost control sounds like it directly contradicts 2018's IRP where PWP declares it will no longer commit to loiig-term gas contracts (i.e. less than 10 years).
3. The lack of information and the expectation of a "rubber stamp" The staff Memo does not provide the text of tlie proposal submitted by ACES to the public or to the MSC. We realize tliat it is common practice for city staff to omit proposals and to only provide scoring infonnation for bids. However, the climate crisis is not a routine contract bidding situation. The MSC, the Council and the public deserve disclosure of the proposal so that we can see ACES' proffered qualifications and intentions.
The PWP grade sheet on page 3 of the Memo (repeated verbatim as Attachment A) evaluates all bidders based on "strength of proposal" and gives ACES a score. The proposal is mentioned a few times in the PWP Memo. But the agenda materials do not include a copy of the proposal.
MSC shoiild not be asked to rubber stamp a contract for approval to the full Coiincil without PASADENA 1003
being able to see the proposal. And the public deserves transparency as well, especially since the Memo lacks information on both the contents of the proposal and tlie qualifications of ACES.
Will you disclose the proposal and give the MSC and the public time to review it before asking for approval?
The lack of infomiation on ACE'.S experience, expertise and interest are particularly worrisome in light ofPWP's acknowledged staffing shortage.
4. The lack of diversity and failure to consider local candidates. ACES is an Indiana based company. Review of the listed ACES executives in the staff Memo reveals a lack of diversity that is not consistent with Pasadena values of DEI. The executives are largely from the gas industry and represent an "old school" of power sourcing that shows an indifference to DEI as well as climate change. The staff Memo states that there were no local candidates, but one bidder appears to have a local connection and also worked on the 2018 IRP. In the first round that bidder was also the lowest cost bidder, so we would like to understand why he was not selected. There may be sound reasons, just as there may be sound reasons why ACES is a good selection, but these reasons are not stated in the staff Memo.
We request an explanation for why PWP did not consult the National Renewable Energy Laboratory (NREL), a United States government national lab that has helped many cities with the modeling necessary for IRPs, including Los Angeles. LADWP, with NREL's help, has committed to 100% carbon free energy by 2035. NREL has tremendous experience with IRP's and is a publicly funded, privately managed organization with access to a wide library of transparent computational models.
Pasadena 100, a coalition of 17 non-profit, non-partisan organizations and faith-based congregations that are concerned about climate change, looks forward with positive energy to the STAG and to the public consultations on our city's energy future. However, PWP's decision for the MSC to approve an invisible proposal by a consultant with unexplained experience does not augur well for the collaborative process we seek.
We respectfully request that you provide answers to the question we raise in this letter.
Yours ti'Lily,
Cynthia Cann
A^^<-<^
ina4^. Chairperson, Pasadenci^lpO
Active San Gabriel Valley
Arroyo Seco Foundation
Aiidubon Society of Pasadena
Ban SUP (Single Use Plastics)
Wes Reutimann
Tim Brick, Director
Dave Weeshoff, Vice President
Chery) Auger, President
PASADENA 1004
Citizens Climate Lobby, Pasadena Foothills Chapter
EDEN, Environmental Ministry of All Saints Church, Pasadena Indivisible Alta Pasadena
League of Women Voters Pasadena Area
Pasadena Complete Streets Coalition
Pasadenans Organizing for Progress (POP)
Progressive Asian Nelwork for Action (PANA)
Sierra Club Pasadena Group
Social Justice Committee, Pasadena Jewish Temple and Center Throop Unitarian Universalisl Church
'Neighborhood Unitaricm Universalist Church,
7th Prmciple Committee
Transition Pasadena
Sanford Krasner, Group Lead
Torn Brady, Chair
John Jackson
Martha Y. Zavala, President
John Odell, Kathy Berlin,
Christie Balvin, members
Jonah Kanner
Rick Cole
Taiji Miyagawa, Co-Founder
Una Lee Jost, Member
George Vine, Vice-Chair,
Treasurer
Carl Selkin, Co-Chair
Rev. Tera Landers, Pastor
Peter Eisenhardt, leader
churcli's eiiviroiiinental
committee
Robert Haw
ec: Miguel Marquez, Pasadeiia City Manager
Municipal Services Committee
Vice Mayor Andy Wilson
Councilmember Tyron Hampton
Councilmember Jess Rivas
Councilmember Felicia Williams
PASADENA 1005