COMMUNITY ENERGY
PROCUREMENT AUTHORITY
February 28, 2023
Lori Mitchell, Director
Jeanne Solé, Deputy Director of Power Resources
REQUEST FOR AUTHORITY TO PURCHASE POWER
• SJCE recommends increasing the authority of the Director of CED to purchase power products including energy, renewable energy, resource adequacy and low carbon products for the period 2023-2024.
2 Calendar
Year
Existing
Authority
Requested
Additional Short-
and Medium-Term
Authority
Authority
with Request
Net Expected
Cost
Target
Covera
ge
Ratio
2023 $352,900,000 $60,000,000 $412,900,000 $392,000,000 125% 2024 $337,300,000 $90,000,000 $427,300,000 $404,000,000 125% • The City Manager’s Risk Oversight Committee approved a coverage ratio of 125% (of expected load) for calendar years 2023 and 2024. • California power prices have been volatile and higher than their historical averages over the last year. This trend is expected to continue. • Extreme price increases during the September heatwave disrupted the power market. • Colder temperatures and natural gas supply limitations in the West December 2022 to January 2023 significantly increased market prices.
• Procuring ahead limits SJCE’s exposure to short-term market disruptions and high prices in the Day-Ahead and Real-Time markets. • SJCE doesn’t expect to raise rates at this time. Revenues were also higher in Dec & Jan. Increased prices may delay achieving reserves target.
BACKGROUND
3 CALIFORNIA INDEPENDENT SYSTEM OPERATOR
AVERAGE DAY-AHEAD PRICES 2022
4 EXISTING AUTHORITY, COMMITTED AMOUNTS, AND
ADDITIONAL REQUEST
4 Recommendation
QUESTIONS?
Presenting staff:
Lori Mitchell, Director
Jeanne Solé, Deputy Director of Power Resources
5 Adopt a resolution increasing the authority of the
Director of the Community Energy Department or
her designee to negotiate and execute short-
and medium-term agreements for the
procurement of power products from
$352,900,000 to $412,900,000 in calendar year
2023 and from $337,300,000 to $427,300,000 in
calendar year 2024 to be paid solely from the
San José Clean Energy Operating Fund.