AGENDA SONOMA CLEAN POWER AUTHORITY BUSINESS OPERATIONS COMMITTEE MONDAY, June 29, :00 A.M. - NOON

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1 AGENDA SONOMA CLEAN POWER AUTHORITY BUSINESS OPERATIONS COMMITTEE MONDAY, June 29, :00 A.M. - NOON Sonoma Clean Power Authority 50 Santa Rosa Avenue, 5th Floor Santa Rosa, California I. CALL TO ORDER II. BUSINESS OPERATIONS COMMITTEE REGULAR CALENDAR 1. Adopt minutes from May 22, 2015 (action) 2. CEO update (information) 3. Review and make recommendation on contract for the purchase of energy and resource adequacy (action). 4. Presentation and discussion on 2014 results for power mix, greenhouse gas emissions and rates.(information) 5. Review and Update of BOC Priority Table (information) I I I. COMMITTEE MEMBER ANNOUNCEMENTS IV. 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 your comments to three minutes.) V. 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 at (707) , as soon as possible to ensure arrangements for accommodation. Page 1 of 16

2 SONOMA CLEAN POWER AUTHORITY BUSINESS OPERATIONS COMMITTEE MEETING MINUTES FRIDAY, MAY 22, 2015 I. CALL TO ORDER: Meeting called to order by BOC Chair Susan Briski at 9:00 A.M. Committee Members Present: Chair Susan Briski, Vice Chair Dick Dowd, George Beeler, Paul Brophy and Bill Mattinson. Staff/Consultants Present: CEO Geof Syphers, Authority Counsel Steve Shupe, Program Manager Amy Rider and Internal Operations Manager Stephanie Reynolds II. BUSINESS OPERATIONS COMMITTEE REGULAR CALENDAR: 1. Adopt Minutes for the Business Operations Committee meeting held May 5, Public Comment: None Motion by.cm Mattinson to accept the minutes as corrected. Seconded by CM Beeler Motion carried: (Brophy, abstain) 2. Chief Executive Officer Update CEO Syphers stated there were few updates since the Ratepayer Advisory Committee Meeting on 5/19/15. He did report on a recent event held in Los Angeles, where he was invited to speak. He was very impressed by how well the event was managed and attended and was asked by several jurisdictions to weigh-in on community choice options in their areas. Public Comment: None. 3. Review and Recommendation on revised Financial Policy B.2 on operating reserves and program fund. CM Dowd noted that the agenda packet for the BOC meeting went out prior to updates to the policy, approved at the Ratepayer Advisory Committee meeting on 5/19/15. Changes to the wording in the last sentence of paragraph 2B were discussed, removing Page 2 of 16

3 Business Operations Committee Meeting May 22, 2015 the words program fund and adding wording stating prior review and recommendation from the BOC would be presented to the Board of Directors before a decision is made. Chair Briski agreed to the changes and stated the policy is aligned with proposed actions. CM Brophy asked that definitions be added to the policies as footnotes, or similar, to make the documents easier to understand. CM Mattinson stated the average stated in 1A may not work for some ratepayers. CEO Syphers suggested that issue be dealt with during the rate-setting process. CM Dowd and CM Mattinson agreed with the amendments and inclusion of definitions as requested by CM Brophy. CM Beeler agreed, but also stressed the need to invest in local programs. Public Comment: None. Motion to recommend the revised Financial Policy B.2 with clarifications added. Seconded by CM Brophy Motion carried (Beeler, abstain) 4. Program Team Report Chair Briski commented on the program team meeting held recently. Program Manager Rider spoke about the context of the meetings and the discussions on program design process, selection processes, and ways to bring in ideas and remain transparent to the public. CM Dowd stated he is working with the team to focus on goals. CM Beeler stated that reviewing the criteria was a good exercise due to the fact that most decisions do not have hard data attached. Peter Renfro (RAC member on the team) stated he was excited to participate in an attempt to achieve goals of ghg reductions, ratepayer stabilization and an increase in local renewable resources. John Parry (RAC member on the team) stated that success hinges on the process and bringing in stakeholders. CM Brophy stated that it will be important to list individual programs as line items on future budgets to show financial implications. Public Comment: John Rosenblum Asked if this group was also working on the Resource Plan. CEO Syphers stated that they are not tasked with working on the plan. Chair Briski noted that there may be some overlap with the team working on the Resource Plan in the future. Woody Hastings Asked who the committee members were (Dowd, Parry, Renfro, Beeler, Syphers, and Rider). CM Dowd stated that the group is meeting to collect ideas, set standards and goals and then make a recommendation to the entire BOC at a public meeting. Andy Ferguson Commented we need to articulate a vision for programs and once we do, the planning and dollars will more easily flow from that. CM Dowd stated that due to SCP still starting up, there needs to be a separate reserve for programs until there is a better idea of ongoing program concepts and costs. Page 3 of 16

4 Business Operations Committee Meeting May 22, Agricultural floating solar program proposal Background of project given by Program Manager Rider. The decision to move forward on the program was made after review and using an internal weighted list of ideas that support multiple JPA goals. A limited scope was presented. The Sonoma County Water Agency (SCWA) would build on the program on SCP s behalf, the amendment adding to the current contract between SCP and SCWA. Discussion on how the project would benefit local contractors. It was suggested that the words construction oversight be struck from the scope. Public Comment: Peter Renfro Stated that there is a huge difference between FIT or behind the meter projects and large floating solar installations. Local, smaller contractors will not be able to participate and there will be a negative reaction if large contractor from out of the area is awarded the job. John Parry Agreed with Peter Renfro in that the proposed contract would not be of interest/value to local companies. He would like SCP to build opportunities for local firms. He suggested involving local stakeholders in the collaboration process. John Rosenblum Behind the meter projects need to meet customer needs. If efficiency measures are taken first, solar costs will be cost effective to customers. Andy Ferguson Programs should support policies such as stimulating local businesses. CM Beeler asked if overall energy efficiency reviews can be added to the scope. CEO Syphers stated SCP can act as a resource to refer customers towards 3 rd party companies that can perform audits. Motion by CM Brophy to recommend accepting proposed contract amendment with SCWA, including the scope of work. Seconded by CM Dowd. Motion carried Recess for Break at 11:01 A.M. Reconvene from Break at 11:08 A.M. 6. Switch Vehicle training program proposal Program Manager Rider reviewed the sponsorship request for the educational program at the high-school level. Switch has also teamed with the Sonoma County Office of Education and the Career Technical Education Foundation. CEO Syphers stressed the importance of reaching out to the wider public on electric vehicles as a solution to ghg Page 4 of 16

5 Business Operations Committee Meeting May 22, 2015 reductions. CM Dowd stated this will assist local businesses to get young people excited about renewable technology. CM Mattinson asked about other sponsors and recommended the program try to enroll electric vehicle automakers as sponsors. Rider noted that the program is scalable and if other sponsors are not found, there would be fewer schools involved, but the program would still go forward. CM Beeler stated that the funds from the program budget are not appropriate for this program, better to take from public relations or marketing budgets. CEO Syphers stated that in the future, there may be separate line items for educational programs. Public Comment: Andy Ferguson Asked if this would benefit the engineering curriculum in schools. CEO Syphers stated that results are speculative at this time, but feels the program would appeal to critical thinkers. Motion by CM Dowd to recommend spending the $150,000 donation to the Career Technical Education Foundation as lead sponsor of the grant program, and allocate + $25,000 to support related curriculum development, videography, and co-marketing of the program. Seconded by CM Brophy. Motion carried 4-1 (Beeler, no)-0 III. COMMITTEE MEMBER ANNOUNCEMENTS CM Dowd spoke about the Sonoma County Children s Museum and encouraged the public to visit. Chair Briski and CEO Syphers stated the need for a late June meeting to review a proposed power purchase. IV. PUBLIC COMMENT ON MATTERS NOT LISTED ON THE AGENDA None. V. ADJOURNMENT Meeting adjourned at 11:35 A.M. Respectfully submitted, Page 5 of 16

6 Business Operations Committee Meeting May 22, 2015 Stephanie Reynolds, Internal Operations Manager Page 6 of 16

7 Staff Update Item 2 To: From: Sonoma Clean Power Authority Business Operations Committee Geof Syphers, CEO Issue: CEO Report (information only) Date: June 29, 2015 Milestones By the end of June, service will be flowing to all customers in Sonoma County Final 2014 results for power mix, percentage renewable, greenhouse gas emissions and rates (see Item 4) Humboldt, Mendocino and Lake Counties are very actively exploring community choice Customer Participation and Enrollment SCP is now serving about 197,000 accounts, representing about 440,000 people in Sonoma County. The number of customers of all types choosing to opt out continues to trend low, at 11% and likely stabilizing around 15% over time. Final enrollment notices will be mailed to customers in July. SCP CUSTOMER CATEGORY ACCOUNTS RESIDENTIAL 170,709 COMMERCIAL 21,078 AGRICULTURAL 2,521 STREET & OUTDOOR LIGHTING 2,400 TOTAL ACCOUNTS SERVED 196,708 Page 7 of 16

8 Emerging Community Choice Programs SCP staff have been actively meeting with public agency staff in other parts of California as they work to design and launch their own community choice programs. Several regions are becoming more active, including Santa Barbara, San Luis Obispo, Sunnyvale, San Mateo, Los Altos, Santa Cruz, San Francisco, Davis, and the counties of Humboldt, Lake and Mendocino. There is also significant work in Southern California in Los Angeles County, San Diego and at least 15 cities. SCP recently presented to the Mendocino Board of Supervisors to help them compare various options, including forming their own program, joining together with another county to start a new program, hiring a full-service contractor or joining an existing CCA. California Clean Power has been actively advertising their services in Mendocino, Lake and Humboldt Counties. Lake County adopted an ordinance allowing the operation of a community choice program, although they have not yet finalized their operations. Humboldt County has the Redwood Coast Energy Authority, which is an existing joint powers authority whose purpose is to develop and implement sustainable energy initiatives that reduce energy demand, increase energy efficiency, and advance the use of clean, efficient and renewable resources available in the region The RCEA is contemplating launching their own community choice program, but is researching various issues including staffing, financing and the congestion costs that are famously high on the north coast. Financials Updated financial reports from May were not available in time for publication of this packet, but will be incorporated into future Business Operations Committee reports. Page 8 of 16

9 POWER PURCHASE BRIEFING To: From: Sonoma Clean Power Authority Business Operations Committee Debra Emerson, Director of Power Services Geof Syphers, CEO Issue: Review of proposed purchase for 2016 Resource Adequacy and energy Date: June 29, 2015 Recommended Action Recommend resource adequacy and energy purchase subject to certain constraints identified in this report. Summary of Proposed Purchases Additional resource adequacy (RA) is necessary to serve customer load in 2016 in order to meet the CPUC and CAISO obligations. Bids were solicited from 10 suppliers, and prices and terms were negotiated by Debra Emerson, SCP s Director of Power Services. Indicative offers were supplied by 6 suppliers. We are requesting that we proceed with final negotiations with the top 4 most competitive offers for a variety of products listed below. The requested volumes are based on projected CPUC and CAISO obligations and taking into account previous forward purchases. Local Volumes: PG&E Other: 70 MWs Greater Bay Area: 35 MWs Page 9 of 16

10 System Volumes: Month Volume MWs January 137 February 151 March 88 April 82 May 112 June 229 July 123 August 210 September 132 October 82 November 129 December 113 Energy: It is also a favorable time for SCP to procure the majority of energy needed for 2017, 2018 and potentially These volumes will make up approximately 72-76% of our open position within our forecasted demand: 2017 approximately 1,825,762 MWh 2018 approximately 1,738,435 MWh 2019 approximately 1,739,035 MWh This procurement will be completed to meet our mandatory RPS obligations while following our Resource Summary and Guidance document protocol, and making progress on our ultimate goals of reducing greenhouse gas emissions while providing stable, competitive rates that are lower than PG&E s rates when possible. The purchases would be subject to the following constraints: Use of an EEI and/or WSPP agreements that are in substantially the same form as recommended by the Business Operations Committee and used by SCP in the past; Reviewed and approved by SCP s outside counsel at Troutman & Sanders; Conforms with all adopted board policies; Page 10 of 16

11 Reviewed for commercial terms by both SCP s Director of Power Services, and for contracts over $5 million by the Power ad hoc Committee of the Board. Impacts of Proposed Purchases The proposed purchase would not require any change to current year rates, or a change to the rates for Fiscal Year Prices compare favorably to budget assumptions and prior RA purchases. Legal Contract Structure and Review The proposed contract form is substantively the same as that used for previous purchases. The contract terms, volumes, and technical specifications for the proposed purchases were negotiated (and will be finalized) by Director of Power Services Emerson and reviewed by CEO Syphers. The contracts have been reviewed by SCP s outside counsel at Troutman Sanders and will be re-reviewed if any changes are made during final negotiations. Page 11 of 16

12 Staff Update Item 4 To: From: Sonoma Clean Power Authority Business Operations Committee Geof Syphers, CEO Issue: Presentation and discussion on 2014 results for power mix, greenhouse gas emissions and rates (information only) Date: June 29, 2015 Summary of Results from 2014 SCP completed the 2014 calendar year with excellent results, well above expectations. Phase 1 customers were served for 8 months and Phase 2 customers were served for up to one month. The final rollout to Petaluma, Rohnert Park and Cloverdale did not occur until June 2015, so results from those cities are not included in this summary. SCP s December 2014 customer count was 107,282 accounts, although the actual number at end of year was considerably higher, since SCP performs monthly counts on the 15 th and December was a major enrollment month. Page 12 of 16

13 Greenhouse Gas Emissions SCP provided 581,294 MWh of electric energy to customers in 2014, with an average emissions factor of 224 pounds of CO 2 per MWh. The total emissions was 59,010 metric tons of CO 2, with nearly all of that from CleanStart customers. The emissions factor for CleanStart was also 224 pounds CO 2 per MWh and EverGreen s emissions factor was 51 pounds CO 2 per MWh. PG&E s most recent published emissions numbers are for Using PG&E s 2013 emissions factor, SCP reduced emissions by an estimated 53,579 metric tons. Actual savings will be adjusted and reported when PG&E publishes its 2014 emissions factor, likely in February Page 13 of 16

14 Renewable Energy Thirty-six percent (36%) of SCP s sources were from qualifying renewable sources. Per our adopted practice, SCP did not use unbundled renewable energy certificates for voluntary purchases. Page 14 of 16

15 Long-Term Contracts for Renewable Energy In 2014, SCP entered into long-term contracts for geothermal and solar photovoltaic energy. Contracts with Calpine for geothermal are in quantities that grow to 50 MW of baseload energy, and contracts for solar with Recurrent for 70 MW. 1 MW of ProFIT feed-in tariff was signed with Cloverdale Soventix. In 2015, SCP signed a contract for an experimental floating solar array at 12.5 MW and at least two more megawatts of local ProFIT solar are expected to be signed. SCP is actively exploring additional local and statewide development opportunities for long-term renewable energy contracts. Customer Bill Savings Total customer bill savings in 2014 was $13,575,035. The method of calculating savings was to take PG&E s published rate comparisons and multiply those average total monthly bills by the number of active SCP customer accounts on the 15 th of each month. There were three separate rate comparisons for 2014 for the following periods, representing the different seasons and PG&E rate changes: May 1 Jul 31 Aug 1 Sep 30 Oct 1 Dec 31 Page 15 of 16

16 Priority High/Med/Low (H/M/L) H - ongoing SCPA Business Operations Committee Agenda Items and Ideas for Future Meetings Updates proposed by Chair Briski with input from CEO Syphers Last Revision 04/09/2015 Proposed Agenda Item Immediate business issues: Any topic needed to ensure the business runs smoothly and works towards achieving the JPA goals. Date added fall H - ongoing Business fundamentals performance monitoring: Staff provide info (at least at the end of each quarter per the JPA) such that the BOC can understand how the business is performing including the following types of items: Financial performance Participation rates, number of accounts, amount of power delivered SCP performance against the JPA goals Various programs against their performance goals (e.g.: FIT, NEM, and new programs as they are developed) H H Resource Plan: Continue to develop, review and articulate concepts, philosophy, criteria, and strategies to be used in the Resource Plan and resource planning decisions. Use cost estimates as possible to assist in resource planning decisions Committee roles and responsibilities, including a continuation of joint committee conversations H Program Development: As a full committee, receive report-outs from the BOC- RAC team working with staff on selection criteria and programs M M M Bilateral agreements vs. RFPs: Discuss appropriate use of each at relevant times in decision-making. Big Audacious Goal: Consider whether a big audacious goal should be set to drive progress (assumes business fundamentals continue to be done well). Informational presentations/workshops related to understanding the business, including resource planning. Possible topics include: RECs (renewable energy credits): how they work, the various categories, regulations regarding them RA (resource adequacy): types, requirements CRR (Congestion Revenue Rights): how they work Various demand-side programs (energy efficiency), or supply side (renewables, etc.) fall M Discussion on Electric Vehicles L Evolution of the JPA to clarify and adjust rules, roles, responsibilities, etc. (as timing becomes appropriate) L Local customer service: Consider if and when it makes sense to internally/locally staff the customer call center rather than using a contracted service fall Page 16 of 16