AGENDA COMMUNITY ADVISORY COMMITTEE MEETING MAY 21, 2019 1:00 PM ___________________________________________________________ 50 Santa Rosa Avenue, Fifth Floor, Santa Rosa, California I. CALL TO ORDER II. PUBLIC COMMENT ON MATTERS NOT LISTED ON THE AGENDA Comments are restricted to matters within the Committee jurisdiction. The Committee will hear public comments at this time for up to thirty minutes. Please be brief and limit comments to three minutes. III. COMMUNITY ADVISORY COMMITTEE CONSENT CALENDAR 1. Approve March 25, 2019 CAC Meeting Minutes (pg. 3) 2. Recommend Board Authorization and Delegation for the CEO to Negotiate and Execute Agreement with Cadmus Group, LLC to Conduct an All-Electric, Zero-Emission Bus Planning Engineering and Study (pg. 9) 3. Recommend Board Authorization and Delegation for the CEO to Negotiate and Execute Agreement with Electric Motor Werks for Extension of the GridSavvy Residential EV Charger Program (pg. 11) IV. COMMUNITY ADVISORY COMMITTEE REGULAR CALENDAR 4. Receive Operations Report and Provide Input as Appropriate (pg. 13) 5. Receive Legislative and Regulatory Updates and Provide Input as Appropriate (pg. 27) 6. Receive an Update and Provide Input as Appropriate on the Upcoming Residential Electric Vehicle Tariff Changes (pg. 35) 7. Review and Recommend Board Approval for the Annual Budget and Rates for Fiscal Year 2019/2020 (pg. 39) V. COMMITTEE MEMBER ANNOUNCEMENTS VI. ADJOURN DISABLED ACCOMMODATION: If you have a disability which requires an accommodation, an alternative format, or requires another person to assist you while attending this meeting, please contact the Clerk of the Board at (707) 890-8491, as soon as possible to ensure arrangements for accommodation. 1 of 61
Transcript
AGENDA COMMUNITY ADVISORY COMMITTEE MEETING
MAY 21, 2019 1:00 PM
___________________________________________________________ 50 Santa Rosa Avenue, Fifth Floor, Santa Rosa, California
I. CALL TO ORDER
II. PUBLIC COMMENT ON MATTERS NOT LISTED ON THE AGENDA
Comments are restricted to matters within the Committee jurisdiction. TheCommittee will hear public comments at this time for up to thirty minutes.Please be brief and limit comments to three minutes.
III. COMMUNITY ADVISORY COMMITTEE CONSENT CALENDAR
1. Approve March 25, 2019 CAC Meeting Minutes (pg. 3)
2. Recommend Board Authorization and Delegation for the CEO to Negotiate and Execute Agreement with Cadmus Group, LLC to Conduct an All-Electric, Zero-Emission Bus Planning Engineering and Study (pg. 9)
3. Recommend Board Authorization and Delegation for the CEO to Negotiate and Execute Agreement with Electric Motor Werks for Extension of the GridSavvy Residential EV Charger Program (pg. 11)
IV. COMMUNITY ADVISORY COMMITTEE REGULAR CALENDAR
4. Receive Operations Report and Provide Input as Appropriate (pg. 13)
5. Receive Legislative and Regulatory Updates and Provide Input as Appropriate (pg. 27)
6. Receive an Update and Provide Input as Appropriate on the Upcoming Residential Electric Vehicle Tariff Changes (pg. 35)
7. Review and Recommend Board Approval for the Annual Budget and Rates for Fiscal Year 2019/2020 (pg. 39)
V. COMMITTEE MEMBER ANNOUNCEMENTS
VI. ADJOURN
DISABLED ACCOMMODATION: If you have a disability which requires an accommodation, an alternative format, or requires another person to assist you while attending this meeting, please contact the Clerk of the Board at (707) 890-8491, as soon as possible to ensure arrangements for accommodation.
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COMMONLY USED ACRONYMS AND TERMS
AER Advanced Energy Rebuild (A program that helps homeowners affected by the October 2017 firestorms rebuild energy efficient, sustainable homes).
CAC Community Advisory Committee
CAISO California Independent Systems Operator
CAM Cost Allocation Mechanism
CCA Community Choice Aggregation
CEC California Energy Commission
CleanStart SCP’s default service
CPUC California Public Utility Commission
DER Distributed Energy Resource
ERRA Energy Resource Recovery Account
EverGreen SCP’s 100% renewable, 100% local energy service
Geothermal A locally-available, low-carbon baseload renewable resource
GHG Greenhouse gas
GRC General Rate Case
IOU Investor Owned Utility (e.g., PG&E)
IRP Integrated Resource Plan
JPA Joint Powers Authority
LSE Load Serving Entity
MW Megawatt (Power = how fast energy is being used at one moment)
MWh Megawatt-hour (Energy = how much energy is used over time)
NEM Net Energy Metering
NetGreen SCP’s net energy metering program
PCIA Power Charge Indifference Adjustment (This fee is intended to ensure that customers who switch to SCP pay for certain costs related to energy commitments made by PG&E prior to their switch.)
ProFIT SCP’s “Feed in Tariff” program for larger local renewable energy producers
PV Photovoltaics for making electric energy from sunlight
RA Resource Adequacy – a required form of capacity for compliance
REC Renewable Energy Credit – process used to track renewable energy for compliance in California.
SCP Sonoma Clean Power
TOU Time of Use, used to refer to rates that differ by time of day and by season
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DRAFT MEETING MINUTES COMMUNITY ADVISORY COMMITTEE MEETING
MARCH 25, 2019 1:00 PM
___________________________________________________________ 50 Santa Rosa Avenue, Fifth Floor, Santa Rosa, California
I. CALL TO ORDER
Chair Dowd called the meeting to order at 1:00 p.m.
Committee Members present: Chair Dowd and Committee Members Baldwin, Brophy, Chaban, Fenichel, Nicholls, Sizemore, and Wells.
Staff present: Geof Syphers, Chief Executive Officer; Stephanie Reynolds, Director of Internal Operation; and Jessica Mullan, General Counsel.
II. PUBLIC COMMENT ON MATTERS NOT LISTED ON THE AGENDA
None
III. COMMUNITY ADVISORY COMMITTEE CONSENT CALENDAR
1. Approve February 19, 2019 CAC Meeting Minutes
Public comment: None
Motion to approve the February 19, 2019 meeting minutes by CM Baldwin
Second: CM Nicholls
Motion passed: 6-0-2
IV. COMMUNITY ADVISORY COMMITTEE REGULAR CALENDAR
2. Receive Operations Report and Provide Input as Appropriate
Director of Internal Operations Stephanie Reynolds updated the Committee on the new Risk and Regulatory Compliance Officer’s starting date, which is April 1st, and the status of the Chief Operating Officer recruitment. Chair Dowd asked what responsibilities the Risk Officer will have and what level of interest there was for the COO position. General Counsel Jessica Mullan provided an overview of the Risk Officer duties
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(regulatory responses & filings and the establishment of an internal risk oversight function among other duties); CEO Syphers detailed the COO responsibilities (significantly manage the daily operations of SCP, personnel management, fiscal management, setting the agency’s goals, etc.) and the high level of interest in the position from very well-qualified individuals. Director Reynolds acknowledged Senior Programs Manager Rachel Kuykendall as a recipient of the North Bay Business Journal’s “Forty Under Forty Award” and her contributions since joining SCP.
CEO Syphers then updated the Committee on the PG&E bankruptcy, including proposed legislation for a secondary type of insurance for utilities that would be paid for by ratepayers. He noted CalCCA’s position that PG&E should focus on safety, and how this could be supported by PG&E exiting the generation side of electricity to focus on grid reliability and safety.
Chair Dowd asked about the status of other major IOUs in California, and if any reorganization talks have touched on these IOUs. CEO Syphers noted that Southern California Edison faces significant wildfire liability and has had their credit downgraded as a result of the PG&E bankruptcy.
CM Fenichel asked what percentage of PG&E’s territory is not covered by a CCA, and CEO Syphers stated that a majority PG&E’s territory is served by CCAs. CM Brophy recounted a Press Democrat article which noted that Senator Dodd had supported CalFire taking over wildfire maintenance of the grid from PG&E and other utilities; CEO Syphers stated he has not studied this option.
Director Reynolds highlighted the updated consent calendar procedures, which are being introduced to maximize meeting efficiency. She then provided the Committee a 431 E Street building update, including design status and notice that a prequalification bid for construction services will be released by SCP this week. Director Reynolds advised the Committee that the Programs team is developing a flood relief program for customers in SCP’s territory, particularly for those located along the Russian River, and that a more detailed plan will be brought back to the CAC and BOD. Following this, Director Reynolds updated the Committee on the monthly compiled budgetary & financial statements, as well as the upcoming public meeting schedule for the BOD and CAC.
Public comment:
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Mike Turgeon, Friends of the Climate Action Plan, commented on the all-electric Reach code and advocacy efforts.
3. Receive Legislative and Regulatory Updates and Provide Input as Appropriate
CEO Syphers provided the legislative report by noting a few high-profile bills that SCP is monitoring such as AB 56 (E. Garcia); SB 350 and SB 520 (Hertzberg). He then detailed SB 255 (Bradford), which calls for increasing energy supplier diversity among identified minorities, and that the SCP BOD Chair and Vice Chair authorized the CEO to draft a letter of support for this bill.
Director Reardon apprised the Committee on the following items: the proposed central buyer for Resource Adequacy, and the Energy Resource Recovery Account fee, which will likely be approved by July 1st.
Public comment: None
4. Review and Provide Input on the Annual Budget and Rates for Fiscal Year 2019/2020, Including a Possible Exemption from Financial Reserves Policy
CEO Syphers introduced the item by noting data which is typically available earlier in the year, such as the PCIA fee and PG&E’s rate schedule update, has not been released publicly. Because of these factors, staff plans to bring back a recommended budget to the CAC at the May meeting. If the outstanding fees and rates are unknown at that time, staff proposes to bring the draft rates at a later meeting with a possible budget adjustment in July or August. CEO Syphers then outlined the various budget scenarios to the CAC, including staff’s preference for the equal savings scenario, the methodology for coming to this recommendation, along with the various budgetary line items. Following this, he highlighted the pros and cons of each proposed budget scenario and the various budgetary line items contained in the staff report for this agenda item.
CM Fenichel asked about a 0.1% savings scenario for customers; Director of Customer Service Erica Torgerson detailed the reasoning behind the various budget scenarios, and her recommendation that savings of such a minimal percentage would not translate to significant savings nor would they necessarily be viewed favorably by customers.
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CM Brophy asked if the 5-year budget forecast and assumptions for Fiscal Year 2019-2020 are based on the equal savings budget scenario, and CEO Syphers confirmed they are. CM Brophy then asked about having the Advanced Energy Center as a separate fiscal entity from SCP; CEO Syphers stated that may be possible at the end of the grant period should SCP wish to continue operating the Center.
CM Wells asked about the proposed Program Reserves for FY 19-20, and his support for not adding additional funds to Program Reserves given the existing funding in this category.
CM Nicholls expressed his support for continuing some level of customer savings, while also protecting against impacts to SCP’s creditworthiness. Chair Dowd noted his support for the Committee’s comments as well as modest savings for SCP customers over PG&E. CM Brophy detailed his support for the Equal Cost budget scenario and the higher cost scenarios, as there is value to ensuring that contributions are made to Operating Reserves. CM Baldwin stated support for the Equal Cost budget scenario. CM Sizemore voiced support for staff’s recommendations. CM Wells suggested a scenario that includes contributions to Operating Reserves, maintains customer savings, and reduces Program Reserves.
Public comment:
Jerry Glaser, Sebastopol resident, spoke on EverGreen benefits and promoting as an option with local building codes.
George Uberti, Santa Rosa resident, spoke about the financial summary reports included in the meeting agenda packet.
CEO Syphers recounted the Committee’s deliberations on this item, which included:
Scenarios from 1.0% savings to 0.5% higher costs should be considered, with a majority of committee members favoring equal costs or 0.5% (or even less) savings. The Committee acknowledged that customers may not value savings of less than 1%, but there could be political value in having a tiny amount of savings.
A one-year exemption of Financial Policy B2 would be acceptable, including shifting the planned net income into capital investments.
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Avoid negatively impacting SCP’s credit. For example, by avoiding spending any Operating Reserve funds.
Consider using some Program Reserves to invest in SCP’s headquarters building, for example for the solar and battery system.
5. Update on Default Time-of-Use Pilot and Full Default Time-of-Use Transition
Director of Customer Service Erica Torgerson introduced the item by providing background on Time-of-Use (“TOU”), including the 2015 CPUC decision establishing the transition to Time-of-Use or “TOU” rates for IOU’s and reasons for the change from the tiered system. She then described the purpose of the pilot in greater detail, which is intended to test marketing, outreach strategies for customers, rigorously test the IOUs process for defaulting mass numbers of customers into a new rate in a compressed timeframe, rate comparison tools, bill protection, and customer understanding before a full default TOU transition. Following this, Director Torgerson detailed next steps in the TOU transition and a tentative schedule for bringing this item back to the CAC and BOD.
Chair Dowd noted the importance of TOU and the role that SCP can play in educating our customers about the new rates. CM Brophy asked how TOU rates could affect comparisons between SCP and PG&E rates; Director Torgerson stated that rate comparison shouldn’t be affected. CM Nicholls detailed his positive experience as a TOU customer and bill savings under this rate.
Public comment: Jerry Glaser spoke about his experience as a TOU customer.
6. Recommend Board Authorization for the CEO to Negotiate and Execute Agreement with NRTC to Provide Smart Thermostats for the GridSavvy Community
Senior Programs Manager Rachel Kuykendall presented on the item, which represents the first extension to the GridSavvy program. CM Nicholls asked about existing customers with smart thermostats like Ecobee and whether they could participate in the program; Senior Programs Manager Kuykendall stated that Ecobee is next on her list, but it would be difficult to fold this manufacturer into GridSavvy given how
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propriety each technology is. CM Brophy asked about the $46,000 in startup fees in the agreement and Senior Programs Manager Kuykendall detailed the line item costs. CM Wells asked how many thermostats may be distributed; Senior Programs Manager Kuykendall stated that the goal is for 500 thermostats.
Public comment: None
Motion to Recommend Board Authorization for the CEO to Negotiate and Execute Agreement with NRTC to Provide Smart Thermostats for the GridSavvy Community by CM Sizemore
Second: CM Baldwin
Motion passed: 8-0-0
V. COMMITTEE MEMBER ANNOUNCEMENTS
None
VI. ADJOURN
Chair Dowd adjourned the meeting at 3:48 p.m.
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Staff Report – Item 02
To: Sonoma Clean Power Authority Community Advisory Committee
From: Cordel Stillman, Director of Programs
Nelson Lomeli, Programs Manager
Item: Recommend Board Authorization and Delegation for the CEO to Negotiate and Execute Agreement with Cadmus Group, LLC to Conduct an All-Electric, Zero-Emission Bus Planning Engineering and Study
Date: May 21, 2019
Requested Actions
Staff requests that the Committee recommend to the SCP Board of Directors that they delegate authority to the Chief Executive Officer to negotiate and execute a contract with Cadmus Group to conduct a planning and engineering study that will develop tangible paths to implement an all-electric, zero emission bus deployment for the four transit agencies in SCP territory, consistent with the parameters in this staff report, including an aggregate not-to-exceed amount of $215,951 over the term.
Background
In December of 2018, the California Air Resources Board adopted the Innovative Clean Transit (ICT) Regulation which requires California transit agencies to transition to zero-emission buses by 2040.
To assist with the electrification of transportation, Staff engaged with four transit agencies (Mendocino Transit Authority, Sonoma County Transit, Petaluma Transit, and Santa Rosa CityBus) to provide assistance in meeting their ICT mandate with electric buses.
Staff issued a Request for Qualifications for an Electric Bus Charging and Fleet Infrastructure Study in February 2019. The RFQ asked for consulting services to conduct a planning and engineering study to develop a blueprint for the work needed to meet the transit agencies zero emission buses mandate and goals.
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Staff received four Statements of Qualifications, of which, Staff selected Cadmus Group to proceed due to their experience in conducting similar studies for other agencies.
In consultation with the transit agencies, Staff will develop a scope of work for a study that will deliver a report to each of the four transit agencies that will include:
• An assessment of their current electrical infrastructure at existingfacilities, include the agencies four depot yards, and two transit malls(Santa Rosa and Petaluma);
• Survey of existing and soon-to-be-available electric buses and chargingequipment;
• Assessment of solar and energy storage potential at each site;
• Assessment and recommendations on charging policies;
• Assistance with applying for PG&E’s Fleet Ready program;
• Analysis of PG&E’s proposed Commercial Electric Vehicle Rate.
Staff requests that the Committee recommend to the Board that they delegate authority to the CEO to negotiate and execute a final contract with Cadmus Group substantially in the form attached to this staff report. Such delegation to negotiate and execute an agreement with Cadmus Group would be subject to the conditions set forth below:
An aggregate not-to-exceed amount of $215,951 over the term of theAgreement.
An initial term for the agreement through December 31, 2019, althoughStaff anticipates completing work in late Fall 2019.
Delegate authority to the CEO to negotiate further amendments to theagreement to address unforeseen needs and adjust budget allocationsby tasks, provided the amendment does not otherwise revise theaggregate not-to-exceed amount or the agreement term.
The agreement, and any subsequent amendments are in a formapproved by the General Counsel.
Attachments
Cadmus Group, LLC Agreement for Professional Services
Attachments for this items can be accessed through this link.
To: Sonoma Clean Power Authority Community Advisory Committee
From: Rachel Kuykendall, Senior Programs Manager
Item: Recommend Board Authorization and Delegation for the CEO to Negotiate and Execute Agreement with Electric Motor Werks for Extension of the GridSavvy Residential EV Charging Program
Date: May 21, 2019
Requested Actions
Staff requests that the Committee recommend to the SCP Board of Directors that they delegate authority to the Chief Executive Officer to negotiate and execute a contract with Electric Motor Werks, Inc. (EMW) to provide SCP customers with residential charging equipment through the GridSavvy Community, consistent with the parameters in this staff report, including an aggregate not-to-exceed amount of $736,000 over the term.
Background
Beginning in 2016, Staff contracted with Electric Motor Werks (EMW) to offer Sonoma Clean Power customers a free residential electric vehicle charger capable of receiving a remote signal for demand response. SCP currently offers three charger types: the JuiceBox Pro 40, the ClipperCreek JuiceNet Edition, and the AeroVironment EVSE-RS. Since its inception, Sonoma Clean Power has deployed 2,444 EV chargers, of which 729 are actively participating as a demand response resource.
Staff requests the Committee recommend to the Board that they delegate authority to the CEO to negotiate and execute a final contract with Electric Motor Werks. A current draft of the contract being negotiated is attached to this staff report. The requested delegation to negotiate and execute an agreement with Electric Motor Werks would be subject to the conditions set forth below:
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An aggregate not-to-exceed amount of $736,000 over the term of theAgreement, of which $700,000 is for charging equipment costs and$36,000 of which is associated with consultant services.
A term for the agreement through July 1, 2020.
Delegate authority to the CEO to negotiate and execute an amendmentto the agreement extending the term up to six (6) months, to the extentnecessary in order to complete negotiations.
Delegate authority to the CEO to negotiate further amendments to theagreement to address unforeseen needs and adjust budget allocationsby tasks, provided the amendment does not otherwise revise theaggregate not-to-exceed amount or the agreement term.
The agreement, and any subsequent amendments are in a formapproved by the General Counsel.
Attachments
Electric Motor Werks, Inc. Agreement for Professional Services
Attachments for this item can be accessed through this link.
To: Sonoma Clean Power Authority Community Advisory Committee
From: Stephanie Reynolds, Director of Internal Operations Geof Syphers, CEO
Issue: Receive Internal Operations Report and Provide Input as Appropriate
Date: May 21, 2019
NEW SCP TEAM MEMBER
SCP recently made an offer that was accepted for the position of Chief Operations Officer. The new COO will be introduced at the 5/21 meeting.
CalCCA ENVIRONMENTAL JUSTICE AND EQUITY WORKING GROUP (EJ&E)
SCP staff began participating in CalCCA’s staff EJ&E working group last November. The working group consists of CCA staff and meets monthly to discuss and learn how to better serve CCA customer communities, with a focus on underrepresented and hard-to-reach groups. The group is sharing information such as: CalEnviroScreen, a mapping tool that helps identify communities affected by pollution and vulnerable to its effects; working with CARE customers in mobile home parks; multicultural outreach and engagement (co-presented by MCE and SCP), which focused on past experiences and what questions CCAs should ask before starting an engagement in a new area; and other topics such as social media, events, partnerships, translations and other topics.
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FLOOD RELIEF DONATIONS
At the April Board meeting, staff reported on program planning to provide relief to flood victims in our service territory. A program with the Bay Area Regional Energy Network was explored to support customers who had lost appliances and/or HVAC systems. That program, while a good concept, was not fast enough to help victims who wanted to replace affected appliances in their home(s) immediately. SCP determined donating funds to local non-profits was the best course of action to quickly and effectively make a difference. After speaking with Chair Landman, Vice Chair Slayter and Director Hopkins, a total of $50,000 in donations was split between three non-profit organizations that were already providing relief to the flood victims. The organizations and donated amounts are:
• $15,000 to West County Community Services
• $15,000 to West County Health Centers
• $20,000 to the 501(c)3 fund, established to support small businesses affected by floods, operated by the Chambers of Commerce of Russian River, Sebastopol, Santa Rosa Metro and the Sonoma County Economic Development Board.
BUILDING UPDATE
SCP’s architect contracted for its headquarters building, EHDD, is working to complete Construction Documents. EHDD has submitted planning level documents to the City of Santa Rosa for review. A pre-qualification RFQ was circulated to building contractors and Builders Exchanges in order that we may create a pool of contractors to bid on the project. Five contractors submitted their qualifications to perform the work. SCP staff will be soliciting proposals from local artists to provide a piece to display at the Headquarters to comply with the City of Santa Rosa’s Public Art ordinance.
PROGRAMS
Two Board members have asked that SCP staff investigate an incentive program for municipal solar projects. In response, staff are researching how battery storage could be added to existing and planned solar projects on municipal properties. Battery storage would provide flexibility for solar projects to contribute to grid reliability and future-proof them to changes in net metering rules and increase the value as significant increases in evening energy costs are implemented.
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Lead Locally (CEC Grant)
The Lead Locally Research Team is currently monitoring the 15 pilot homes and will measure the energy use over the summer period to establish a baseline use for the applied research experiments of: heat pump water heaters, radiant ceiling heating and cooling panels, residential attic phase change materials, and air to water heat pumps. In June, a Phase 2 Technology Demonstration study on market ready technologies such as; daylighting retrofits for three commercial properties, phase change materials, night ventilation, induction cooktops, and economizers will begin. The team expects to publicly recruit SCP customers to participate in the Phase 2 Technology Demonstration study in late May.
A Request for Qualifications for manufacturers and distributors to display and deploy emerging technologies at the Advanced Energy Center will be publicly available beginning in May until the opening of the Center. Additionally, TLCD Architecture submitted construction documents to the City of Santa Rosa for permitting the Advanced Energy Center. The Lead Locally team plans a bid for construction services in late May and hopes to bring back a construction contract with associated costs for approval in a near-term meeting.
Induction Cooktops
Staff is engaged with Daily Acts to lend out induction cooktops from their Petaluma office. A Memorandum of Understanding is signed and lending will start later this month. Staff is actively looking for other nonprofit entities throughout various regions of Sonoma and Mendocino County (e.g. West Sonoma County, Sonoma Valley, Northern Sonoma, Coastal Mendocino, Inland Mendocino, and Anderson Valley) to partner on this program.
GridSavvy
After Board approval during the April board meeting, contract negotiations with NRTC for adding Nest thermostats to the GridSavvy program have stalled. While the Programs team works to find other potential contractors and solutions to continue integrating Nest into the GridSavvy Community, we do not anticipate this will be complete by the previous proposed launch date of mid-May 2019.
Advanced Energy Rebuild
192 homes have now applied for Advanced Energy Rebuild, about one third of which have chosen to rebuild all-electric homes. SCP staff is working with both PG&E and Southern California Edison to expand the Advanced Energy Rebuild program to fire-affected areas within their service territories, and has
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started looking at the potential for a 2020 Advanced Energy Rebuild program.
Low Carbon Reach Codes
An “all-electric” reach code would mandate that all new construction within a jurisdiction use high efficiency electric equipment, reducing the greenhouse gas emissions of new homes by more than two thirds. SCP’s Senior Program Manager, Rachel Kuykendall, is currently working with the following jurisdictions on reach codes: Sonoma County, Santa Rosa, Windsor, Sebastopol, Petaluma, and Cloverdale.
MONTHLY COMPILED FINANCIAL STATEMENTS
The winter rate season continues into March, a period where aggregate rates are less than in the summer. The year-to-date growth in net position is slightly below projections due primarily to lower than anticipated electricity sales. Year-to-date electricity sales reached $130,444,000. Electricity sales (as reported on the Statement of Revenues, Expenses and Changes in Net Assets) is being offset by our estimate of uncollectible accounts, which is currently set at approximately 0.5% of electricity sales. As historical data is gathered on the collection patterns specific to SCP customers, this rate will be revisited and adjusted as necessary. Note that the accounts receivable line on the Statement of Net Position is presented net of allowance for uncollectibles. SCP continues to procure electricity from multiple sources. Net position reached a positive $88,710,000, which indicates healthy growth as SCP continues to make progress towards its reserve goals. Of this net position, approximately $61,156,000 is set aside for reserves (Operating Reserve: $50,872,000; Program Reserve: $9,174,000; and Collateral Reserve: $1,110,000). Overall, other operating expenses continued near or slightly below planned levels for the year.
BUDGETARY COMPARISON SCHEDULE
The accompanying budgetary comparison includes the 2018/19 amended budget approved by the Board of Directors in March 2019. The budget is formatted to make comparisons for both the annual and the year-to-date perspective. The first column, 2018/19 YTD Budget, allocates the
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Board approved annual budget at expected levels throughout the year with consideration for the timing of additional customers, usage volumes, staffing needs etc. This column represents our best estimates and this granular approach was not part of the Board approved budget. Revenue from electricity sales to customers is under the year-to-date budget by approximately 1%. The cost of electricity is a near match to the budget-to-date. Variation in this account is typically due to fluctuating market cost of energy on open position purchases. Major operating categories of Data Management fees and PG&E Service fees are based on the customer account totals and are closely aligned to budget. In addition to the items mentioned above, SCP continues its trend of remaining near or under budget for most of its operating expenses.
UPCOMING MEETINGS:
BOD MEETING – JUNE 6, 2019 (final FY budget presentation and vote)
CAC MEETING – JUNE, TBD (if needed)
BOD MEETING – JULY 11, 2019 (off schedule, rates presentation and vote)
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1
ACCOUNTANTS’ COMPILATION REPORT
Board of Directors Sonoma Clean Power Authority
Management is responsible for the accompanying special purpose statement of Sonoma Clean Power Authority (a California Joint Powers Authority) which comprise the budgetary comparison schedule for the period ended March 31, 2019, and for determining that the budgetary basis of accounting is an acceptable financial reporting framework. We have performed a compilation engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. We did not audit or review the accompanying statement nor were we required to perform any procedures to verify the accuracy or completeness of the information provided by management. Accordingly, we do not express an opinion, a conclusion, nor provide any assurance on this special purpose budgetary comparison statement.
The special purpose statement is prepared in accordance with the budgetary basis of accounting, which is a basis of accounting other than accounting principles generally accepted in the United States of America. This report is intended for the information of the Board of Directors of Sonoma Clean Power Authority.
Management has elected to omit substantially all of the note disclosures required by accounting principles generally accepted in the United States of America in these interim financial statements. Sonoma Clean Power Authority’s annual audited financial statements include the note disclosures omitted from these interim statements. If the omitted disclosures were included in these financial statements, they might influence the user’s conclusions about the Authority’s financial position, results of operations, and cash flows. Accordingly, these financial statements are not designed for those who are not informed about such matters.
We are not independent with respect to the Authority because we performed certain accounting services that impaired our independence.
Maher Accountancy San Rafael, CA April 25, 2019
1101 FIFTH AVENUE • SUITE 200 • SAN RAFAEL, CA 94901
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2018/19 YTD Amended Budget
2018/19 YTD Actual
2018/19 YTD Amended
Budget Variance (Under) Over
2018/19 YTD
Actual/ AmendedBudget %
2018/19 Amended Budget
2018/19 Amended Budget Remaining
REVENUE AND OTHER SOURCES: Electricity (net of allowance) * 131,544,055$ 130,097,898$ (1,446,157)$ 99% 176,855,000$ 46,757,102$ Evergreen Premium (net of allowance) 306,444 346,519 40,075 113% 412,000 65,481 CEC Grant 1,580,800 1,254,812 (325,988) 79% 1,927,000 672,188 BAAQMD grant 46,500 42,125 (4,375) 0% 62,000 19,875 Interest income 709,500 769,470 59,970 108% 946,000 176,530 Miscellaneous Income - 503 503 0% - (503) Total revenue and other sources 134,187,299 132,511,327 (1,675,972) 99% 180,202,000 47,690,673
EXPENDITURES AND OTHER USES:CURRENT EXPENDITURES Cost of energy and scheduling 109,083,163 109,277,404 194,241 100% 146,345,000 37,067,596 Data management 2,316,750 2,364,894 48,144 102% 3,089,000 724,106 Service fees- PG&E 719,250 710,222 (9,028) 99% 959,000 248,778 Personnel 2,745,750 2,488,488 (257,262) 91% 3,661,000 1,172,512 Outreach and communications 858,000 779,339 (78,661) 91% 1,144,000 364,661 Customer service 344,000 188,540 (155,460) 55% 440,000 251,460 General and administration 408,250 366,327 (41,923) 90% 531,000 164,673 Legal 532,500 314,956 (217,544) 59% 710,000 395,044 Accounting and auditing 153,000 120,215 (32,785) 79% 204,000 83,785 Technical consultants 142,500 91,233 (51,267) 64% 190,000 98,767 Legislative and regulatory advocacy 96,000 89,500 (6,500) 93% 128,000 38,500 Other consultants 120,000 65,674 (54,326) 55% 160,000 94,326 CalCCA Trade Association 273,000 225,000 (48,000) 82% 400,000 175,000 Program implementation 3,382,500 2,321,332 (1,061,168) 69% 4,510,000 2,188,668 Program - CEC grant 1,316,250 1,114,662 (201,588) 85% 2,415,000 1,300,338 Program development and evaluation 55,000 - (55,000) 0% 100,000 100,000 Total current expenditures 122,545,913 120,517,786 (2,028,127) 98% 164,986,000 44,468,214
OTHER USES Collateral deposit payments 1,409,000 1,408,034 (966) 100% 1,409,000 966 Collateral deposit payments returned - (372,500) (372,500) - - 372,500 Capital outlay 900,000 612,934 (287,066) 68% 1,190,000 577,066 Total expenditures, Other Uses and Debt Service 124,854,913 122,166,254 (2,688,659) 98% 167,585,000 45,418,746
Net increase (decrease) in available fund balance 9,332,386$ 10,345,073$ 1,012,687$ 111% 12,617,000$ 2,271,927$
* Represents sales of approximately 1,837,000 MWh for 2018/19 YTD actual.
July 1, 2018 through March 31, 2019BUDGETARY COMPARISON SCHEDULE
OPERATING FUND
See accountants' compilation report. 219 of 61
Net increase (decrease) in available fund balance per budgetary comparison schedule: 10,345,073$
Adjustments needed to reconcile to the changes in net position in the Statement of Revenues, Expenses and Changes in Net Position:
Subtract depreciation expense (44,699) Add back capital asset acquisitions 612,934 Subtract collateral deposits returned (372,500) Add back collateral deposits 1,408,034
Change in net position 11,948,842$
REVENUES, EXPENSES AND CHANGES IN NET POSITION
July 1, 2018 through March 31, 2019
SONOMA CLEAN POWER AUTHORITY
OPERATING FUNDBUDGET RECONCILIATION TO STATEMENT OF
See accountants' compilation report. 320 of 61
1
ACCOUNTANTS’ COMPILATION REPORT
Management Sonoma Clean Power Authority
Management is responsible for the accompanying financial statements of Sonoma Clean Power Authority (a California Joint Powers Authority) which comprise the statement of net position as of March 31, 2019, and the related statement of revenues, expenses, and changes in net position, and the statement of cash flows for the period then ended in accordance with accounting principles generally accepted in the United States of America. We have performed a compilation engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. We did not audit or review the accompanying statements nor were we required to perform any procedures to verify the accuracy or completeness of the information provided by management. Accordingly, we do not express an opinion, conclusion, nor provide any assurance on these financial statements.
Management has elected to omit substantially all of the note disclosures required by accounting principles generally accepted in the United States of America in these interim financial statements. Sonoma Clean Power Authority’s annual audited financial statements include the note disclosures omitted from these interim statements. If the omitted disclosures were included in these financial statements, they might influence the user’s conclusions about the Authority’s financial position, results of operations, and cash flows. Accordingly, these financial statements are not designed for those who are not informed about such matters.
We are not independent with respect to the Authority because we performed certain accounting services that impaired our independence.
Maher Accountancy San Rafael, CA April 25, 2019
1101 FIFTH AVENUE • SUITE 200 • SAN RAFAEL, CA 94901
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Current assetsCash and cash equivalents 51,654,032$ Investment in Sonoma County Investment Pool 15,318,831 Accounts receivable, net of allowance 16,087,137 Other receivables 949,210 Accrued revenue 6,942,160 Prepaid expenses 1,898,909 Deposits 182,079
Total current assets 93,032,358 Noncurrent assets
Land 860,520 Capital assets, net of depreciation 3,276,496 Deposits 5,459,242
Total noncurrent assets 9,596,258
Total assets 102,628,616
Current liabilitiesAccounts payable 1,258,078 Accrued cost of electricity 11,048,402 Advanced from grantors 457,875 Other accrued liabilities 647,431 User taxes and energy surcharges due to other governments 506,861
Total current liabilities 13,918,647
Investment in capital assets 4,137,016
Unrestricted 84,572,953
Total net position 88,709,969$
NET POSITION
As of March 31, 2019STATEMENT OF NET POSITION
SONOMA CLEAN POWER AUTHORITY
ASSETS
LIABILITIES
See accountants' compilation report. 2
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OPERATING REVENUES Electricity sales, net 130,097,898$ Evergreen electricity premium 346,519 Grant revenue 1,296,937 Total operating revenues 131,741,354
OPERATING EXPENSES Cost of electricity 109,277,404 Staff compensation 2,488,488 Data manager 2,364,894 Service fees - PG&E 710,222 Consultants and other professional fees 2,274,739 Legal 314,956 Communications 969,222 General and administration 649,124 Program rebates and incentives 1,468,737 Depreciation 44,699 Total operating expenses 120,562,485
Operating income 11,178,869
NONOPERATING REVENUES (EXPENSES) Interest income 769,470 Gain on sale of equipment 503 Total nonoperating revenues (expenses) 769,973
CHANGE IN NET POSITION 11,948,842 Net position at beginning of period 76,761,127
Net position at end of period 88,709,969$
July 1, 2018 through March 31, 2019AND CHANGES IN NET POSITION
STATEMENT OF REVENUES, EXPENSES
SONOMA CLEAN POWER AUTHORITY
See accountants' compilation report. 3
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CASH FLOWS FROM OPERATING ACTIVITIESReceipts from electricity sales 134,856,906$ Receipts from grantors 480,822 Receipts from supplier for security deposits 14,600 Tax and surcharge receipts from customers 1,798,182 Deposits and collateral returned 372,500 Payments to purchase electricity (112,727,855) Payments for staff compensation (2,493,708) Payments for contract services (5,114,205) Payments for communications (1,246,693) Payments for general and administration (655,781) Payments for program rebates and incentives (1,510,987) Tax and surcharge payments to other governments (1,772,429) Deposits and collateral paid (1,408,034) Payments for charitable contributions (108,000)
Net cash provided (used) by operating activities 10,485,318
CASH FLOWS FROM CAPITAL AND RELATEDFINANCING ACTIVITIESAcquisition of capital assets (730,976)
Net cash provided (used) by capital and financing activities (730,976)
CASH FLOWS FROM INVESTING ACTIVITIESInterest income received 770,703
Net cash provided (used) by investing activities 770,703
Net change in cash and cash equivalents (including County Investment Pool) 10,525,045 Cash and cash equivalents at beginning of year 56,447,818 Cash and cash equivalents at end of year 66,972,863$
Reconciliation to the Statement of Net PositionCash and cash equivalents 51,654,032$ Investment in Sonoma County Investment Pool 15,318,831
Cash and cash equivalents 66,972,863$
July 1, 2018 through March 31, 2019STATEMENT OF CASH FLOWS
SONOMA CLEAN POWER AUTHORITY
See accountants' compilation report. 4
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Operating income 11,178,869$ Adjustments to reconcile operating income to net
cash provided (used) by operating activitiesDepreciation expense 43,054Revenue reduced for uncollectible accounts 655,501Charitable contributions considered an operating activity for cash flow purposes only (108,000)(Increase) decrease in net accounts receivable 1,121,510(Increase) decrease in other receivables (767,697)(Increase) decrease in accrued revenue 2,630,862(Increase) decrease in prepaid expenses (1,368,378)(Increase) decrease in current deposits (982,290)Increase (decrease) in accounts payable 176,696Increase (decrease) in accrued cost of electricity (2,756,737)Increase (decrease) in advance from grantors (42,125)Increase (decrease) in accrued liabilities 659,084Increase (decrease) in user taxes and energy surcharges due to other governments 30,369Increase (decrease) in supplier security deposits 14,600 Net cash provided (used) by operating activities 10,485,318$
SONOMA CLEAN POWER AUTHORITY
STATEMENT OF CASH FLOWS (continued)July 1, 2018 through March 31, 2019
RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES
See accountants' compilation report. 5
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Staff Report – Item 05
To: Sonoma Clean Power Authority Community Advisory Committee
From: Geof Syphers, CEO Neal Reardon, Director of Regulatory Affairs
Issue: Receive Legislative and Regulatory Updates and Provide Input as Appropriate
Date: May 21, 2019
Requested Committee Action:
Receive the Regulatory and Legislative Updates and Provide Input as Appropriate.
REGULATORY REPORT
Power Charge Indifference Adjustment (PCIA)
Staff have received preliminary information relating to the implementation of the 2019 PCIA update that is encouraging. In the November 2018 update PG&E proposed a total PCIA for its entire territory of $1.164 billion, and the most recent Advice Letter reduced that to $1.007 billion, after accepting some of SCP and CalCCA’s recommended corrections. This makes it more likely SCP can sustain a small customer rate savings for the remainder of 2019, as is detailed in Item 7 later in this packet. In addition, the 2020 PCIA is still expected to increase following implementation of the changes required in the October, 2018 PCIA Decision issued by Carla Peterman. Any additional contribution to reserves will be helpful in offsetting that expected future increase.
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PG&E’s Energy Resource Recovery Account (ERRA)
On April 4th, PG&E submitted an amended Advice Letter proposing PCIA and Generation Rates for 2019. This re-submittal was ordered by the Commission after SCP and other CCAs successfully advocated in the ERRA Proceeding.
Compared with what PG&E originally proposed to charge in November, this April filing proposes to reduce the total amount of PCIA collected from departed customers by $157 million or 13.5%. PG&E bundled generation rates are proposed to increase between 4.2% and 9.1%, depending on customer class. These would go into effect as early as July 1st, with September 1st being more likely. Northern California CCAs protested PG&E’s filing as the exact calculations are still unclear and the reduction in PCIA was less than what PG&E said it would be in advocating against making these changes last Winter.
Resource Adequacy (RA)
The CPUC maintains that while a central procurement entity is a solution to problems in the RA market, it is not ready for implementation at this time. Groups of stakeholders: Investor Owned Utilities, CCAs, and Energy Service Providers, are all directed to host one meeting to discuss outstanding issues. The first of these meetings occurred April 22-23. CPUC Staff and the Assigned Commissioner are eager to create a central procurement entity, and have signaled they will make another proposal in 4Q 2019 if stakeholders do not come to agreement on what the structure should be.
CalCCA and SCP have indicated support for a limited form of central procurement, which respects CCA rights to fully self-procure all resources. The CalCCA proposal recommends forming a Central Procurement Authority for the purpose of procuring any resource adequacy that individual electric suppliers elect not to self-procure. This proposal ensures that all LSEs retain their existing procurement authority while protecting California’s grid from reliability issues that could arise from LSEs choosing or unable to procure sufficient resources. This outline plan has been presented the authors of AB 56 (Garcia) because of the overlapping legislative issues in that bill (see Legislative Report later in this item).
PG&E Request to Increase Return on Invested Capital
PG&E recently asked the CPUC to increase the company’s return on equity from 10.25 percent to 16 percent because the company’s credit rating is too
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low to effectively raise capital. Alternative means of continuing operations without this increase were not presented in PG&E’s filing. If the CPUC approves this request, it would represent an increase of $1.2 billion in ratepayer costs per year, and would translate to a monthly bill increase for the average residential electric non-CARE customer of $7.85, or an increase of 7.0 percent. This would also impact natural gas bills, where the monthly average residential bill impact would be $4.25, or a 7.7 percent increase. If approved, the change in customer bills would be effective January 1, 2020 and last for a minimum of three years. This increase would not include any money to cover wildfire risk reduction work, or to pay for fire liabilities.
CPUC Approves Increase in PG&E Rates
On April 25, the CPUC voted unanimously to approve a $373 million increase in PG&E delivery rates to pay for PG&E's costs for nine fire, wind and rain events in 2016 and 2017 to restore power, repair facilities and trim trees, remove trees, and clear brush from underneath power lines to prevent future outages and fires. The CPUC estimates this increase amounts to an average $3.50 increase on residential bills per month and will last for 12 months. TURN protested that this approval did not include a prudency review.
LEGISLATIVE REPORT
The months of March and April have been extremely busy for the Legislature and the Governor. Both the Senate and Assembly energy policy committees have had numerous hearings and have passed virtually every bill that came before the committees. Fortunately, the members of the energy policy committees would only pass the legislation if the author took the amendments recommended in the bill’s analysis.
Friday, April 26th is the last day for policy committees to pass legislation that have been identified as “fiscal.” For the bills that have not been keyed fiscal, the policy committees have until May 3rd to pass bills in order for the bills to move to the floor and the appropriations committees have until May 17th to move fiscal bills to the floor.
Since the beginning of Governor Newsom’s administration, he identified a key goal of strengthening California’s emergency preparedness and response capabilities to mitigate wildfires and build community resilience. In response to PG&E’s decision to file for bankruptcy, Governor Newsom created a strike force team to coordinate the state’s efforts relating to the safety, reliability,
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and affordability of energy. On April 12th, the Governor released the strike force team’s report that sets out some initial steps to reduce the incidence and severity of wildfires, and focuses significantly on options for allocating the costs of fires.
The report discusses community choice aggregation and recognizes that CCAs are playing a critical leadership role in advancing clean energy investments in California and that CCAs must be seated at the table if California wants to achieve its greenhouse gas emissions-reduction goals. However, the report also calls for increased budget and powers for the CPUC geared toward accelerating the CPUC’s procedural timelines and increasing control of the CPUC over statewide renewable energy and reliability. That last point is the most concerning aspect of the Governor’s report for CCAs, given the CPUC’s recent history of trying take away CCA governing board’s powers to plan and procure energy and reliability resources.
SCP Positions Taken
AB 56 (E. Garcia) – Central Procurement Board Action: Oppose
AB 56 would authorize the California Public Utilities Commission and the California Energy Commission to jointly establish the “California Clean Electricity Authority” if certain findings regarding need for the Authority as a means to help achieve California’s clean energy goals, plug gaps in current procurement by retail sellers and that the Authority can reasonably manage power supply commitments previously entered into by electrical corporations.
When AB 56 was heard in the Assembly Utilities and Energy Committee on April 3rd, the committee amended the bill to authorize CAEAFTA (a financial agency within the State Treasurer’s Office) to perform the duties of the “Authority” including renewable energy procurement, taking over management of existing LSE energy contracts and/or power plants. CEO Syphers testified in opposition on the basis that the bill would greatly expand CPUC powers to order PG&E (and the other IOUs) to buy any energy or resource adequacy on behalf of a CCA without providing a clear opportunity for the CCA to self-provide. No member spoke in favor of the bill and no support for the bill was provided by any group other than the sponsor from TURN. Nevertheless, the committee passed the bill with an expectation the author would work with the CCAs to address the jurisdictional concerns.
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When the bill was heard in the Assembly Natural Resources Committee on April 22, the committee analysis recommended the bill be amended to state that procurement authority should be “focused on specific unmet needs only.” CEO Syphers again testified in opposition, and was joined by Southern California Edison who also opposed on the basis that the last time the State of California set up a central procurement entity called the CalPX or the “Power Exchange” it was a financial disaster that we are still paying for. Again, no member or group spoke in favor of the bill, but again the committee passed the bill with a repeated request for the author to work directly with the CCAs to address their issues. We are continuing to discuss our concerns with the author.
CEO Syphers then met with the Author’s Legislative Director and Matt Freedman of TURN to discuss the bill. There was agreement that the bill’s current language could be interpreted to endow the proposed central buyer with authority to buy energy and capacity without first providing a CCA its existing right to self-procure. However, there was a lack of interest on TURN’s part for committing to resolve the problem, and it was clear that TURN is interested in expanding the CPUC’s control over CCAs to include procurement of renewable energy, so it is unlikely that TURN will amend its bill to resolve SCP’s concerns. This conflict remained despite pointing out the clear ratepayer financial harm of the bill, possibly due to TURN’s financial interest in protecting and increasing CPUC jurisdiction, where ratepayer-funded intervention is the source of a majority of TURN’s income. SCP remains opposed to the bill.
SB 255 (Bradford) – Diverse Business Enterprises Board Action: Support
SB 255 expands the CPUC utility supplier diversity program by lowering the revenue threshold for participation from $25 million to $1 million in California and would include CCAs, electric service providers, distributed energy resource companies, and certain wholesale electric generators.
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SB 350 (Hertzberg) – Central Buyer Board Action: Allow to Negotiate
SB 350 authorizes the CPUC to consider changes within the resource adequacy program, including the use of a multi-year centralized resource adequacy mechanism.
SB 520 (Hertzberg) – Provider of Last Resort Board Action: Allow to Negotiate
SB 520 authorizes the CPUC to develop threshold attributes for load serving entities to serve as a “provider of last resort” or POLR.
SB 155 (Bradford) – Integrated Resource Plan Board Action: Allow to Negotiate
SB 155 was previously drafted to authorize the CPUC to audit any retail seller to assess its compliance with RPS and RA procurement requirements and to issue mandates to ensure sufficient corrective action is taken to achieve full compliance with those procurement requirements. The language went beyond the CPUC’s prior role of verifying compliance, and veered into potential conflicts of procurement jurisdiction.
Fortunately, CalCCA and several individual CCAs worked closely with the Senate Energy, Utilities and Communications Committee and secured important changes to the bill striking the language concerning the RPS and instead requiring that as part of the annual compliance filings the CPUC must determine whether an LSE is on track to meet its RPS requirements. In cases where the LSE is not, the CPUC would notify the LSE that they are behind on their RPS obligations.
New language was taken in the Senate Energy, Utilities and Communications Committee, and negotiations continue.
AB 1362 (O’Donnell) – CCA Code of Conduct Board Action: Support
Existing law limits IOUs from actively marketing against the formation of a CCA without a CPUC-approved funding and marketing plan. Until this week, AB 1362 would have removed some of the limitations on IOUs and allow IOUs
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to “educate” and “provide information” that may run counter to the publicly available information provided by local public agencies.
CalCCA worked closely with the Assembly Utilities and Energy Committee and secured major amendments on April 24th. The changes gut the bill and converts it to a requirement for the CPUC to report CCA rate information and other factual data. Staff is recommending a Support position.
AB 1584 (Quirk) – Renewable Integration Procurement and Costs Board Action: Oppose Unless Amended
Would allow the CPUC to set obligations for renewable energy “integration” and potentially for load management and demand response. It would require the CPUC to audit CCA compliance and allow the CPUC to buy any kind of resource it deems necessary to meet any unprocured resources and assign those costs to a CCA. This bill could effectively transfer significant planning and procurement rights from SCP’s governing board to the CPUC because all resources have some impact on renewable integration, which is a broad term meaning ensuring system reliability while increasing the percentage of energy from renewable sources. Activities that affect integration include buying energy from diverse technologies (e.g., wind, geothermal, biomass, small hydro and solar), buying energy from diverse locations, buying resource adequacy from any type of source, establishing and operating demand response programs, and targeting energy efficiency to specific times of day (such as LED lighting in homes, which targets evening-time energy use). Recommended position: Oppose Unless Amended, with amendments focusing on limiting the scope to the CPUC identifying obligations and verifying they are met, and excluding the ability for the CPUC to transfer costs from IOU procurement onto CCAs.
This bill would require the CPUC to establish targets for electric vehicle grid integration and would grant the CPUC authority over CCA electric vehicle grid reliability activities, removing SCP’s governing board’s authority over programs like SCP’s existing GridSavvy program. The general concept of promoting smart EV charging is helpful, but removing a CCA’s control would both slow down implementation of GridSavvy and almost certainly add
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considerable ratepayer costs. Staff recommends a position of Oppose Unless Amended, with recommended amendments to remove any transfer of authority away from a CCA governing board.
SB 774 (Stern) – Electric Microgrids Board Action: Support If Amended
This bill would require each electrical corporation to collaborate with local governments and other interested parties in its service territory to identify locations where microgrids may provide increased electrical resiliency. The current language would block CCAs from participating in most microgrid projects, but the Author has committed to editing that language to make it work for CCAs. Recommended Position: Support If Amended, to allow CCAs to participate.
AB 684 (Levine) EV Charging Infrastructure in Multifamily Board Action: Support
In the April Board meeting, a Support position was tentatively approved. Staff were uncertain at the time whether the bill applied to newly-constructed projects or to existing projects, so staff agreed to bring the bill back for approval after an answer could be provided.
This bill would require the development of standards and requirements for the installation of future electric vehicle charging infrastructure for parking spaces for existing multifamily and nonresidential development. Staff recommend Support, but will work with the Author to ensure the standards apply only to larger multifamily projects with 10 units or more.
SB 45 (Allen) - Wildfire, Drought, and Flood Protection Bond Act of 2020 Board Action: Support
In the April SCPA board meeting, Director Hopkins asked SCP to consider supporting SB 45, which if passed would place a bond measure onto a public ballot to approve $4.3 billion in funds for reducing wildfire risks and restoring areas impacted by disasters, among other water, climate and natural lands protection measures.
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Staff Report – Item 06
To: Sonoma Clean Power Authority Community Advisory Committee
From: Erica Torgerson, Director of Customer Service Danielle Baker, Customer Care Specialist
Issue: Update on Upcoming Residential Electric Vehicle Tariff Changes
Date: May 21, 2019
Requested Committee Action:
Receive an Update and Provide Input as Appropriate on the Upcoming Residential EV Tariff Changes.
Background of the Electric Vehicle Tariff:
EV-A Tariff SCP currently has just under 3,000 EV-A accounts.
EV-A is an optional experimental schedule available to electric service to customers for whom E-1 applies and who have a currently registered Motor Vehicle, as defined by the California Motor Vehicle Code, which is a battery electric vehicle (BEV) or plug-in hybrid electric vehicle (PHEV) recharged via a recharging outlet at the customer’s premises. This rate schedule is subject to a PG&E service territory enrollment cap of 60,000 accounts. Regardless of the level of participation, EV-A will be closed to new enrollment on the later of July 1, 2019 or the date the new electric vehicle charging rate adopted by D.18-08-013 is available for enrollment.
EV-A currently has the following Time-of-Use schedule and Seasons: Peak: 2:00 p.m. to 9:00 p.m. Monday through Friday.
3:00 p.m. to 7:00 p.m. Saturday, Sunday and Holidays.
Partial-Peak: 7:00 a.m. to 2:00 p.m. and 9:00 p.m. to 11:00 p.m. Monday through Friday, except holidays.
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Off-Peak:
All other hours.
Seasonal Changes: The summer season is May 1 through October 31 and the winter season is November 1 through April 30.
New EV2 Tariff Beginning on the later of July 1, 2019 or the date the new electric vehicle charging rate, EV2, will become available for enrollment. This optional schedule applies to electric service to customers for whom E-1 applies and who have a currently registered Motor Vehicle, as defined by the California Motor Vehicle Code, which is a battery electric vehicle (BEV) or plug-in hybrid electric vehicle (PHEV) recharged via a recharging outlet at the customer’s premises. In addition, this schedule is available on a pilot basis to customers that have installed battery storage as described further below. Customers taking service on EV2 cannot exceed 800% of their annual baseline allowance, measured as the total usage for the customer over the last 12 months divided by the total annual baseline allowance using the approved baseline allowances for those months. Customers at premises with total usage in excess of 800% of baseline over 12 months will be moved to E-TOU-B and will be prohibited from taking service on any electric vehicle rate schedule for 12 months. Customers must have 12 months of consecutive usage on this Rate Schedule before being subject to the requirement of being moved from EV to E-TOU-B as a result of exceeding the 800% of baseline 12-month threshold. EV2 will have the following Time-of-Use schedule and Seasons:
Peak: 4:00 p.m. to 9:00 p.m. every day including weekends and holidays.
Partial-Peak: 3:00 p.m. to 4:00 p.m. and 9:00 p.m. to 12:00 a.m. every day including weekends and holidays.
Off-Peak:
All other hours.
Seasonal Changes: The summer season is June 1 through September 30 and the winter season is October 1 through May 31.
Eligibility for Customers with Battery Storage: Customers that otherwise qualify for E-1 may take service on this rate schedule on a pilot basis subject to the terms below:
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Customers with battery storage may take service on this rate schedule even
though they do not have an electric vehicle. Participation is available to all residential customers that otherwise qualify for E-1, including those customers with a Photovoltaic (PV) system.
Participation will be limited to 30,000 storage-only customers (PG&E service territory). Customers that have both an electric vehicle and battery storage will not count toward the participation limit.
Eligible battery storage customers must apply for interconnection and be granted permission to operate by PG&E in order to take service on EV2.
The installed storage capacity, in kWh, must be at least 0.05% of the customer’s annual consumption from the previous twelve months for customers with more than 6,000 kWh of annual usage. The installed storage capacity for customers with 6,000 kWh or less of annual usage must be at least 2 kWh. Customers with less than 12 months of usage history must install storage capacity, in kWh, of at least 2 kWh to be eligible for this rate schedule.
EV-A to EV2 Rate Transition begins November 2019 and is on-going: A PG&E communication plan to inform customers of upcoming EV rate
changes and future transitions is in place. Copies provide to SCP and our call center.
The majority of the current EV-A customers will be transitioned in November
2019 to EV2. NEM customers will be transitioned every November based on their
grandfathered status, from 2019 – 2024. EV2 Rates PG&E’s final rates for EV2 will be dependent on their revenue requirement in effect on July 1, 2019. PG&E will include final rates in either the advice letter for overall rate changes on July 1, or in a supplemental advice letter if the Commission has not issued a disposition letter by that time. PG&E has indicated to the CCAs that it will make efforts to provide the rates to CCAs 10 business days before the rate is live. To ensure SCP and its billing vendor, Calpine Energy Solutions, are ready for customers to start taking service under EV2 on the day it opens, SCP will need to have a rate in place prior to July 1, 2019. Per Section 4.5.2.1.1 of SCPA’s Joint Powers Agreement,
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“…the Chief Executive Office may change any rate for power sold by the Authority or any charge for services provided by the Authority if…(ii) a change in rates or charges imposed on the Authority or its customers by PG&E, the CPUC, or any other regulatory agency…Changes in rates or charges made by the Chief Executive Officer under this Section shall be brought to the Board of Directors at the next scheduled meeting for consideration and shall expire after 90 days unless ratified by the Board of Directors.”
Staff is recommending EV2 rates be established as soon as PG&E’s unbundled rates become available. Staff further recommends that the EV2 rate be set at a 1% total electric bill savings compared to PG&E bundled customers. Per the JPA, following the implementation of the new rates, a staff report will be brought to the Board of Directors at the next scheduled meeting for approval and shall expire after 90 days unless ratified by the Board of Directors.
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Staff Report – item 07
To: Sonoma Clean Power Authority Community Advisory Committee
From: Geof Syphers, CEO Stephanie Reynolds, Internal Operations Director Rebecca Simonson, Senior Power Services Manager
Issue: Review and Recommend the Annual Budget and Rates for Fiscal Year 2019/2020.
Date: May 21, 2019
Requested Action
Review and recommend the Fiscal Year 2019-20 proposed budget and customer rates that provide an estimated 1.0% savings for all customers.
Background
Due to significant delays in the CPUC’s adoption of a 2019 PCIA and generation rates for PG&E, SCP’s annual budget will necessarily need to be adopted before adjusting customer rates to ensure SCP has an approved budget by the July 1 start of the fiscal year. Once the CPUC approves changes to PG&E’s PCIA and generation rates, Staff will return to the Board in July for final adoption of customer rates that would be implemented on September 1. A modified schedule for this process is shown two pages further in this item.
A reasonable estimate of PG&E’s PCIA and generation rates has been developed by staff, so the proposed budget likely will require only a modest adjustment following the CPUC approval of PG&E’s rates and fees.
There is good news regarding the remaining months of 2019. The 2019 PCIA is now expected to include a number of corrections advocated by SCP and CalCCA, and will likely be substantially lower than PG&E had originally
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proposed. That will make it easier to remain cost competitive for the remaining months of 2019.
To clarify this important matter, in the November 2018 update PG&E proposed a total PCIA for its entire territory of $1.164 billion, and the most recent Advice Letter reduced that to $1.007 billion, after accepting some of SCP and CalCCA’s recommended corrections. The PCIA for 2019 is expected to be higher for commercial customers and lower for residential customers than the 2018 PCIA, with the net effect of nearly equal total costs for SCP’s mix of customers. This makes it likely SCP can sustain a small customer rate savings for the remainder of 2019 while building reserves.
Previous Board Guidance
The Committee and Board have previously provided the following guidance on budget and rates:
n Continue to provide customer programs, though consider launching fewer new programs;
n Continue to construct the Advanced Energy Center and SCP’s headquarters;
n Aim to provide equal rates or a small 0.5% to 1.0% savings;
n Plan to contribute some amount to operating reserves, even if it is just $1 million;
n Be willing to pay for some of the energy-related investments in SCP’s headquarters building (e.g., the battery storage) from Program Reserves, if necessary, to balance the budget.
In addition, there was significant support for a compromise proposal from Committee Member Wells who proposed 0.5% rate savings, $1 million contribution to operating reserves, and use of $3.3 million in program reserves for construction activities.
Staff believe that all of the above goals can be met with the proposed budget.
Proposed Procedure for Rates Adoption
Staff propose the Committee recommend adopting rates which would produce an estimated 1.0% savings for all customers on total electric bill charges on September 1, 2019. Since the CPUC has not yet finalized PG&E’s
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PCIA fee and generation rates, Staff propose the Committee recommend a process for dealing with variations from the current forecast:
n If the CPUC adopts fees and rates for PG&E which cause SCP’s September 1, 2019 rates to have less than 0.5% savings, SCP Staff will schedule an additional Committee meeting to review SCP’s final rates before Board adoption.
n If the CPUC adopts fees and rates for PG&E which cause SCP’s September 1, 2019 rates to have 0.5% savings or greater, SCP Staff propose taking those SCP rates directly to the Board for adoption, without scheduling a third Committee meeting for additional review.
Modified Schedule for Budget and Rate Adoption
Staff recommend the following schedule for budget and rate review, input and adoption:
Mar 25, 2019 Committee review of draft budget and potential rate impacts
Apr 4, 2019 Board review of draft budget and potential rate impacts
May 21, 2019 Committee recommends a final budget and rates, subject to a limitation that final rates provide at least 0.5% bill savings
Jun 6, 2019 Board adopts final budget (not rates)
Early July If rates recommended by Committee on May 21 do not provide at least 0.5% bill savings, then Committee reviews new rate plan.
Jul 11, 2019 Board adopts rates for September 1, 2019
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Budget Overview
The proposed budget features:
n Rates that are estimated to produce 1.0% bill savings for all customers upon implementation on September 1, 2019;
n $6.5 million (3.3% of revenues) in planned contribution to operating reserves;
n Two additional staff positions for an Energy Analyst and one additional administrative role;
n Restoration of $370,000 (25%) of the cuts made to Programs;
n Restoration of $62,000 (25%) of the cuts made to Outreach and Communications;
n Restoration of $24,000 (25%) of the cuts made to Customer Service
n Construction of the Advanced Energy Center;
n Begin construction of SCP’s headquarters;
n Adherence to Financial Policy B2.
Budget Scenarios
Three budget and rate scenarios are considered and summarized in the following table. A total of $34.6 million is available to allocate to customer bill savings, customer programs, capital investments, and SCP reserves. Once a level of customer total bill savings is selected, the amounts dedicated to programs, capital projects and reserves are still flexible. Staff recommend a budget based on providing 1.0% savings on customer’s total electric charges, shown below in bold.
Given the corrections secured to the PCIA, no exception to Financial Policy B2 is needed. That policy governs budget and rate planning, and requires that at least 3% of planned revenues are budgeted for reserves.
PROPOSED BUDGET
The proposed budget is presented first in the form that will be used for adoption, and then is followed by supplemental information. The budget categories are intentionally general enough to allow some measure of staff discretion, without requiring frequent budget adjustments.
The “Total Expenditures, Other Uses and Debt Service” plus the planned contribution to operating reserves (shown as “Net Increase/ (Decrease) in Available Fund Balance”) equals the Revenue Requirement, which is the amount necessary to recover from customers through rates.
Certain assumptions were used to create this budget, including:
n Customer participation rates remain relatively stable throughout the year, with about 0.3% increase based mainly on rebuilt homes and new homes.
n The amount of uncollectible funds is assumed to be 0.5%.
n The load drop in 2018 does not reverse. Load has declined because unusually large residential users, presumed to be commercial cannabis growers, dramatically cut their usage or closed accounts in 2018, and we assume that change is permanent, and these users will not return or increase their usage again.
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n The costs of resource adequacy remain artificially high due to a lack of selling by large entities in the year-ahead compliance process, and a lack of enforcement by the CPUC.
n The cost of building construction continues to escalate at a high rate. Note that if construction costs stabilize or even slow their rate of increase instead, the capital expenses in the budget could be lower.
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45 of 61
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46 of 61
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INFORMATION ONLY - SUPPLEMENTAL TO THE PROPOSED BUDGET
Details on the proposed budget are provided in this section along with projections of the next five years. While the table shown reflects a reasonable estimate of future revenues and expenses, it is important to stress that actual revenues and expenses will vary from this forecast.
FY19-20 FY20-21 FY21-22 FY22-23 FY23-24REVENUES AND OTHER SOURCES
Further detail on each of the proposed budget categories follows.
REVENUES AND OTHER SOURCES
The primary source of income is from the retail sale of electricity to CleanStart and EverGreen customers. Customers of both of these programs provide all of the Electricity Sales income. EverGreen costs 2.5 cents per kWh over the cost of CleanStart, and provides 100% renewable energy from sources in Sonoma and Mendocino Counties. The EverGreen premium pays for the purchase of local sources of renewable geothermal and solar, and is not intended to produce surplus income.
The total sales are based on SCP rate changes that result in 1.0% total bill savings compared with PG&E bundled customer rates across all rates. The PCIA and PG&E rates that will be effective in the FY2019-2020 fiscal year are still not finalized, so the actual savings may deviate from the estimate.
The total sales estimate is based on 87% of eligible customers (and load) participating in SCP. The net financial performance of SCP is not sensitive to small changes in the rate of participation because a majority of expenses are proportional to the load served. In other words, income and expenses generally tend to go up and down together.
An estimate of 0.5% is used for the portion of billings that will never be collected. Revenues shown in the budget are net of this reduction.
EXPENDITURES Product
Cost of Energy and Scheduling includes all of the various services purchased from the power market through our suppliers. This includes 2,640,000 MWh of energy, capacity, green attributes, scheduling services, CAISO fees and other miscellaneous power market expenses. The volume of purchased energy is between 5% and 8% greater than the volume sold because of normal system losses. The following figure shows the breakdown of forecasted energy use by customer class.
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SCP has entered into contracts that will meet approximately 95% of its expected energy requirements through the full fiscal year, meaning that energy costs are reasonably well known, although changes in energy market prices will still have an impact on SCP’s costs.
SCP’s current suppliers for energy and capacity include Constellation, Calpine, RE Mustang, RE Mustang 3, Golden Hills North, NextEra, Calpeak, Shell, Powerex, 3 Phases, Transalta, PG&E, GE Power, Tenaska, CleanPowerSF, Monterey Bay Community Power, Peninsula Clean Energy Authority, Silicon Valley Clean Energy, The Energy Authority, Turlock Irrigation District, and Southern California Edison. SCP also has suppliers through the ProFIT local feed-in tariff program. SCP’s ProFIT feed-in tariff program was authorized by the Board of Directors to contract with local renewable energy suppliers up to $600,000 per year in above-CleanStart expenses. This was translated into 6 MW of capacity, which formed the basis for contracting. 2 MW of solar are currently in operation, 1 MW of solar is expected to come online in the next few months, and an additional 3 MW of solar projects are expected to come online in FY2019-2020. Because the EverGreen premium pays for the purchase of these local sources, the quantity of ProFIT projects could be increased in the future if EverGreen participation increases. SCP is actively working with the member cities and counties to increase EverGreen participation.
Major amounts of SCP’s customer load are also served by customer-owned solar arrays. Small amounts also reduce the load of other SCP customers through NetGreen overproduction. None of this production is reportable on
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SCP’s Power Content Label, however, because it is treated as a load reduction rather than supply energy under California regulations.
Energy is procured for over 90% of the forecast load through December 2020. The primary price risks are therefore related to forecast error, changes in rates of customer participation, variable generation output of solar and wind resources, generation curtailment risks, forward pricing peak and off-peak unhedged energy, and legislative and regulatory risks (e.g., unexpected changes in PCIA fees). Overall, SCP is in a strong financial position. The primary known risk is that new legislation or regulations could be passed that drive up customer costs, for example by limiting SCP’s ability to participate in competitive electric markets or by imposing compliance burdens that are intended to harm public power providers.
Based on current rates of participation by net-metered customers and payouts in 2017 and 2018, the total payout amount forecast for SCP’s NetGreen customers is estimated to be about $1,090,000 for the fiscal year. SCP staff are beginning to explore how to help solar customers as time-of-use rates shift the value of production into the evening hours, and will be bringing program proposals to the Committee and Board in the next year or two to address this.
Scheduling Coordinator services are provided by Shell Energy North America. The charges for this service are included together with energy and resource adequacy. After electric power is scheduled for delivery to customers and ultimately consumed by those customers, the actual electric consumption must be trued up against the forecasted and scheduled energy. This true up occurs through the settlement process, or “settlements.” Settlements also entail addressing a number of other market and regulatory requirements. The impact on budgeting is that invoices and credits occur several months (and sometimes up to two years) following a given month of service.
Data Management is a broad scope of services provided by contract through Calpine Energy Solutions, including billing data validation, bill coordination with PG&E, billing management of special programs (e.g., NetGreen and ProFIT), call center services and billing technical support, customer enrollment database management, move-in/move-out services, CAISO data preparation, WREGIS data preparation, and many support functions related to data reporting.
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SCP's Data Management contract with Calpine Energy Solutions was presented, reviewed and approved by the Board of Directors November 7, 2013 and continues through April 30, 2022.
Service Fees to PG&E consist of a charge of $0.35 per account per month (including a $0.21 per account service fee and a $0.14 per account meter data management fee). There are also numerous small fees associated with data requests. The fees cover PG&E’s costs associated with additional data processing and bill coordination, and are mandatory and regulated by the California Public Utilities Commission (CPUC).
Personnel
Personnel costs include all of the salaries, benefits, workers compensation premiums and payroll taxes for staff, and are based on adding the following positions relative to early 2019: Chief Operating Officer, Compliance and Risk Officer, Energy Analyst and an administrative role.
Outreach and Communications
The attached budget draft assumes that nearly all marketing efforts will focus on Lead Locally/the Advanced Energy Center. Other marketing focuses include Advanced Energy Rebuild, GridSavvy and other programmatic support.
The Community Memberships and Outreach budget has been reduced by $30,000 from the current fiscal year. The Advanced Energy Center’s classroom affords SCP an opportunity to give back to our local communities without separate financial investment, and will be a key strategy in stretching this year’s more modest Community Outreach budget.
SCP will continue to focus on increasing the authority’s reach and relevance to the Hispanic community and other key groups and also on supporting nonprofit events and efforts which provide exposure and visibility for SCP as a committed community partner.
Similarly, SCP will continue to reinforce brand awareness through SCP’s consistent public relations and social media platforms, and will continue to provide leadership within the community choice industry by taking a lead role in CalCCA committees, groups and events.
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Outreach and Communications Estimated Detail
General Advertising & Media 524,500
Campaigns and program support 178,000
Consultants 66,500
Community memberships & outreach 160,000
Collateral & miscellaneous 31,000
Outreach and Communications Total $ 960,000
Customer Service
This subcategory includes required customer noticing and local business and industry development.
Customer Noticing
There are several kinds of official mailed notices SCP provides to its customers. Outside of enrollment rollouts, the following notices are mailed out to applicable customers:
§ Move-in notice postcard (weekly) § Move-in notice letter (weekly) § EverGreen confirmation notices (weekly) § NetGreen welcome (weekly) § Opt-out confirmation - immediate notice (weekly) § Opt-out confirmation – 6 month notice (weekly) § Late payment notices (monthly) § Joint Rate Comparison with SCP and PG&E information (annually) § California Energy Commission’s Power Content Label (annually) § As needed, special rate notices (e.g., E7 closure and options)
The budget reflects the approximately 1,250 letters mailed every week plus the required annual mailings.
Business and Industry Development
The Customer Service team also works with SCP’s local business and industry groups through memberships and sponsorships to increase awareness of SCP and improve relationships. SCP participates in many events that raise money and awareness for local businesses, such as the food, wine, and agricultural
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industries. An aspect of SCP teams’ key business requires reoccurring meetings with other CCA counterparts, stakeholder groups and PG&E to coordinate joint business and facilitate unique client needs.
Community engagement is a high priority and partnering with Santa Rosa Junior College to administer the SCP Spirit of Entrepreneurship Grant aims to enhance community relations and build stronger ties locally with the College, student population and future work force of our community. This competitive grant is facilitated via SCP staff and will work with various student participants and Business department staff to ultimately select up to three top performing “ideas” to receive the award. The frequency of issuance will be on an annual basis during the spring semester “Pitch Contest”, even though the business course is aimed to be offered each semester. Students participating in the fall semester course can present their ideas during the spring semester should they so choose.
Customer Noticing Estimated Detail
Confirmation letters 64,800
Annual Required Notices 108,200
Other Noticing 13,000
Customer Noticing Subtotal (rounded) 186,000
Business & Industry Development
Memberships/sponsorships 38,900
Events (Participation) 37,900
Customer Appreciation/Development 32,600
SCP Grant Fund 60,000
Miscellaneous 11,600
Biz & Industry Development Subtotal (rounded)
181,000
Total Customer Service $367,000
General and Administration
General and Administration includes ordinary business expenses such as rent, meeting room rentals, parking and transit expenses, liability insurance, basic office supplies, office phones, internet service, data service, minor equipment costing less than $1,000, leases for printer/copiers, professional
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development/training, conferences, memberships, dues and subscriptions, travel, meals and miscellaneous operational expenses.
General and Administration Estimated Detail Office space and meeting/event rentals 191,000 Insurance 8,000 Misc. expenses and office supplies 50,000 Phones, internet, data and minor equipment 51,000 Conferences and professional development 22,000 Dues and subscriptions 145,000 Travel 20,000 Meals and entertainment 18,000
General and Administration Total 505,000
Other Professional Services
Legal, Regulatory & Compliance. Staff’s budget request for the Legal, Regulatory and Compliance budget line item:
n Combines the budgets for Legal, Regulatory and Compliance into one-line item, where previous years had a separate line item for regulatory;
n Continues to be driven in large part by the extraordinary circumstances associated with PG&E’s Chapter 11 bankruptcy, which has required staff to engage outside bankruptcy counsel and other outside legal resources with related expertise in financing, CPUC/FERC regulatory advice, and energy transactional matters;
n Will assist staff with management of overflow work on issues important to SCP operations that are typically handled in house, when not resource constrained internally due to demands associated with the PG&E bankruptcy, such as public contracting and Lead Locally CEC Grant, 431 E Street Construction;
n Allows the legal department to continue to provide certain specialized transactional, regulatory, advisory and compliance-related services to SCP departments the legal department provides in typical years, such as participation in ongoing CPUC regulatory proceedings and specialized energy transactional review.
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With the legal, regulatory and compliance budget, approximately 39% is estimated to be related to the PG&E bankruptcy, 35% is associated with general agency regulatory advocacy and compliance, 13% is expected to be required in connection with energy procurement transactional advice and the remaining 13% is related to other routine SCP operational matters and special projects, ranging from general transactional support, human resources advice, and analysis associated with the new SCP headquarters and other Programs department efforts such as the Lead Locally CEC grant.
Accounting. Accounting includes services from three different providers. Maher Accountancy provides the day-to-day accounting for SCP, including generation of financial statements and consolidated reports. Maher’s current fee is $9,350 per month plus a one-time fee of $13,900, and is expected to rise slightly next year. The County’s Auditor Controller Treasurer Tax Collector’s (ACTTC) office provides internal auditing and control for SCP and bills its time at cost, estimated to be less than $10,000 for the year. Pisenti & Brinker serves as SCP’s third-party, independent, outside auditor. Last year Pisenti’s costs were $21,800, so staff have assumed a small increase for inflation for this fiscal year.
Legislative. Legislative covers SCP’s Sacramento legislative lobbyist, and coverage for tracking and advancing bills in the legislative session. This category has been decreasing in expenditures as contributions to the statewide CalCCA trade association allows that organization to take on more of this work.
Other Consultants. Other Consultants covers costs related to outside services needed for basic internal operations, such as: IT services/repairs, nighttime security for the building at 431 E Street, administration fees for our insurance benefits and retirement plans, consultants for mandatory training, and the collection agency SCP uses for past-due accounts.
CalCCA
The CalCCA trade association is an important entity for sharing the costs of legislative and regulatory work. The association has been instrumental in improving SCP’s effectiveness at the CPUC on matters including the PCIA, resource adequacy, and in the legislature on organizing and providing direction to lobbyists and requesting action. CalCCA now has six full time staff, and we expect further improvements in the association’s service to SCP and the other public CCA power providers around California.
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Programs
Over the past year, SCP successfully completed the DriveEV program and implemented the Advanced Energy Rebuild Program. The list below indicates the programs we intend to administer in the upcoming fiscal year. Many of these are continuing programs from the current year.
Customer Benefits SCP Benefits
ELECTRIC VEHICLES
CalEVIP – Work with the CEC to implement their EV charging station incentive program.
Increase the number of Level 2 and 3 EV charging stations in SCP territory.
Increase electricity sales and net revenues while decreasing emissions.
GridSavvy – Create aggregated load resource with EV charging equipment and schedule into CAISO markets.
Potential to earn cash rewards over time. Pride of helping support more renewable energy on the grid.
Increases ability to shape system load. Potential to meet portion of RA obligation. Supports lower emissions by allowing more renewable sources in portfolio.
Non-Profit EV Incentive – Provide an incentive for non-profits to purchase EV and PHEV vehicles.
Support of worthy non-profits.
Increased exposure through marketing and reduction of GHG emissions.
Transit Electrification Study – Assist local transit agencies in determining their infrastructure and equipment needs to meet upcoming electrification requirements.
Reduced costs and emissions from transit activities.
Increase electricity sales and net revenues while decreasing emissions.
EDUCATION
School Programs – teacher training, education materials development, in-class programs.
Increase commitment in SCP, awareness of issues, and value to schools. Instill a culture of efficiency in school-age children.
Increase awareness of SCP. Educate children on climate change and energy efficiency.
SWITCH EV Program – placement of EV kit cars in CTE programs of local high schools.
Increase commitment in SCP, awareness of issues, and value to schools, while developing STEM skills.
Increase awareness of clean power science and career opportunities. Long-term investment in promoting technical capabilities needed for clean energy operations.
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Customer Benefits SCP Benefits
BUILDING EFFICIENCY & DECARBONIZATION
Assistance to Commercial Customers – Provide an expert in energy efficiency to audit the energy use of commercial customers.
Provide assistance to commercial customers in identifying energy efficiency measures.
Low cost program that will build brand loyalty.
Assistance to Fire Re-Building Effort – In partnership with PG&E and BAAQMD, create an incentive program for home re-building. The Advanced Energy Rebuild Program
Provide incentives to homeowners re-building in the fire zones to achieve 2020 building codes.
Advances SCP’s goals for reducing GHG emissions through fuel switching.
DIY Tool Kits – Placement of energy efficiency tool kits in County libraries for customers to check out.
Easy, fun way to learn about energy efficiency in homes and save money on utility bills.
Low cost program that will build brand loyalty.
Induction Cooktop Lending Program – Lending Induction cooktops from multiple locations to promote fuel switching/efficiency.
Easy way for customers to try out induction cooking. Survey results indicate a high conversion rate due to the program.
Advances SCP’s goals for reducing GHG emissions through fuel switching. Low cost program that will build brand loyalty.
CEC Grant administration – Managing the implementation of the grant and creation of an energy efficiency Marketplace.
Exposure of customer to cutting edge energy efficiency products and the ability to purchase and install them.
Advances SCP’s goals for reducing GHG emissions through fuel switching. Increase brand awareness and customer loyalty.
FLEXIBLE LOAD
Demand Response Program – Develop general tools for managing diverse kinds of aggregated resources. GridSavvy Community.
Increased opportunities to use new technologies, earn market revenues, and support lower emission sources.
Potential to shape system load and lower total costs to customers over time. Increased ability to meet RA obligations and achieve high amounts of renewables.
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Customer Benefits SCP Benefits
DISTRIBUTED ENERGY RESOURCES
Misc. Contracts (CCP, Etc.)
Provide resources and education to customers considering distributed resources.
Potential to shape system load and lower total costs to customers over time. Increased ability to meet RA obligations and achieve high amounts of renewables. Customer education.
Programs Estimated Detail Electric Vehicles CalEVIP 500,000 CleanCharge 500,000 Non-Profit Vehicle Incentive 50,000 Transit Electrification Study 100,000 Electric Vehicle Subtotal 1,150,000 Education School Programs 275,000 SWITCH Program 75,000 Misc Education Tools/Support 15,000 Education Subtotal 365,000 Energy Efficiency in Buildings Assistance to Commercial Customers 60,000 Assistance to Fire Re-Building Efforts 1,000,000 DIY Tool Kits 30,000 Energy Efficiency in Buildings Subtotal 1,090,000 Demand Response Program 200,000 CEC Grant Administration 8,960,000 Misc. Contracts 645,000 Programs Total 12,410,000*
*NOTE: Grant proceeds from CEC contribute $4,760,000 toward above costs.
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Advanced Energy Center Leasehold Improvements
A significant portion of the California Energy Commission grant that SCP received is targeted toward the creation of the Advanced Energy Center in downtown Santa Rosa. Due to the constraints of the grant process, we were not able to include more than $509,000 in the application for tenant improvements (the grant process requires that any contractor receiving over $100,000 in the grant be identified at the time of application. Also, as a public agency, SCP is required to bid the tenant improvement contract and therefore could not identify the contractor at the time of grant application.) Combined with the higher cost of construction since the grant application was made, this means a higher amount of tenant improvement costs will likely fall to SCP than originally planned.
Initial professional estimates for tenant improvements are running at $2.7 million. These are initial, planning level estimates and are deliberately conservative to try to account for all contingencies. Many of the costs included in the initial estimate are expected to come down slightly due to value engineering. However, this estimate is still about $700,000 higher than SCP initially estimated. That early estimate included the $509,000 in the original grant application and $1.5 million in assumed SCP tenant improvement costs.
It is staff’s recommendation to proceed with construction of the Advanced Energy Center for several reasons:
n SCP has a sole right to take over operation of the Advanced Energy Center and continue operating it at the end of the three-year CEC grant;
n The use of a storefront/showroom/training center has many uses for SCP that can evolve with SCP’s programs;
n The annual operating costs of the Center, including staffing, utilities, lease, security, insurance and related expenses is expected to be under $400,000 per year in 2022, making it a potentially valuable resource to continue using.
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OTHER USES
Capital Outlay is for equipment costing in excess of $1,000, including computers, printers and furniture. However, SCP’s capital investment in its owned headquarters building is 98% of this line item for FY2019-20.
Collateral Deposits used to be included as an “Other Use” but are now recorded as coming out of SCP’s Collateral Reserve fund rather than a budget line item.
DEBT SERVICE
SCP currently carries no debt.
NET INCREASE/ (DECREASE) IN AVAILABLE FUND BALANCE
The allocation of surplus funds is governed by the adopted Financial Policy B2. The policy generally indicates that net surplus funds (if any) are dedicated to Operating/Credit Reserves, Program Reserves, and a Collateral Reserve. Earlier forecasts showed a need for an exception to the policy’s requirement to plan a 3% contribution to reserves, but no exception is needed now that the CPUC has made corrections to the PCIA.
