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Home My WebLink About2021-05-27; Clean Energy Alliance JPA; ; Adopt Resolution Establishing Policy for Adding New Member Agencies to Clean Energy Alliance1111.1110-- CLEAN ENERGY ALLIANCE Staff Report DATE: May 27, 2021 TO: Clean Energy Alliance Board of Directors FROM: Barbara Boswell, Interim Chief Executive Officer ITEM 6: Adopt Resolution Establishing Policy for Adding New Member Agencies to Clean Energy Alliance RECOMMENDATION Adopt Resolution No. 2021-011 Establishing Policy for Adding New Member Agencies to Clean Energy Alliance. BACKGROUND AND DISCUSSION Clean Energy Alliance (CEA), desires to expand and offer its community choice energy service to eligible communities within San Diego Gas & Electric territory. To provide guidance regarding the process and conditions under which CEA will add new members a policy is being proposed. Section 2.4 of the CEA Joint Powers Agreement (JPA) provides general guidance regarding the addition of new members. It states: On or after October 1, 2020, any incorporated municipality, county, or other public agency authorized to be a community choice aggregator under Public Utilities Code Section 331.1 and located within the service territory of SDG&E may apply to and become a member of the Authority if all the following conditions are met: 2.4.1 Adoption of a resolution by a two-thirds vote of the entire Board authorizing membership in the Authority; 2.4.2 Adoption by the proposed member of a CCA ordinance as required by Public Utilities Code Section 366.2(c)(12) and approval and execution of this Agreement and other necessary program agreements by the proposed member; 2.4.3 Payment of a membership fee, if any, as may be required by the Board to cover Authority costs incurred in connection with adding the new party; and 2.4.4 Satisfaction of any other conditions established by the Board. May 27, 2021 Policy Addition of New Members Pau 2 of 3 Section 2.4 also addresses the addition of new members prior to October 1, 2020, with the following criteria: •Completion of a positive CCE Feasibility Study by the prospective member; •Paid or agreed to pay its share of the Initial Costs pursuant to Section 7.3.2 of the JPA; •The prospective member could be denied membership if the Board determined within 60 days after the submittal of the CCE Feasibility Study that the addition of the public agency would create an undue risk or financial burden to the Authority or to the achievement of the Climate Action Plan (CAP) goals of the current members. The proposed policy includes the criteria from the JPA document for addition of new members after October 1, 2020, as well as including some of the criteria addressed for addition of new member prior to October 1, 2020, as detailed below. In order to ensure the addition of a new member does not negatively impact CEA financially, or in achieving its goals, the proposed policy states: CEA will consider membership of a city or county within SDG&E territory, pursuant to the conditions above, if •The analysis of the proposed member usage data results in a positive feasibility study using CEA's financial pro forma model; •The addition of the proposed member does not create a financial burden to CEA; •The addition of the proposed member is consistent with the goals of CEA. With regards to whether a new member would be required to pay a membership fee, as addressed in JPA Section 2.4.3, there are two categories of costs related to the addition of a new member: •Costs related to the addition to the JPA; o Cost of analysis of historical usage data using CEA's financial pro forma model to determine impact to CEA of the proposed member; and o Preparation of an Amended Implementation Plan and related activities of the expansion, as required by the California Public Utilities Commission. •Costs related to the implementation of CEA in the new member territory o Development and mailing of notices; o Resource Adequacy procurement costs. The policy proposes addressing these two categories of costs in the following manner: •The proposed member will be responsible to cover these CEA direct costs related to the addition of the proposed member and will be eligible for reimbursement of the costs paid by the proposed member within three years of CEA serving customers within the proposed member territory. May 27, 2021 Policy Addition of New Members Page 3 of 3 •CEA will consider using reserves, to the extent available, or other financing sources for these costs related to the implementation of CCE service in the new member territory, if the CEA pro forma reflects sufficient revenue is generated within the new member territory to reimburse CEA for those costs within three years. The policy proposes flexibility for the Board to waive certain criteria or add additional requirements as it deems necessary in considering the addition of a new member. FISCAL IMPACT There is no fiscal impact by adoption of this policy. ATTACHMENTS Resolution No. 2021-011 Establishing Policy for Adding New Member Agencies DocuSign Envelope ID: 3EA09192-042F-473F-81FE-4665C34DEIDEB CLEAN ENERGY ALLIANCE RESOLUTION NO. 2021-011 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE CLEAN ENERGY ALLIANCE APPROVING NEW MEMBER ADDITION POLICY WHEREAS, the Clean Energy Alliance (CEA) is a joint powers agency, formed in November 2019, by founding members cities of Carlsbad, Del Mar and Solana Beach; and WHEREAS, Community Choice Aggregation (CCA) authorized by Assembly Bill 117, is a state law that allows cities, counties, and other authorized entities to aggregate electricity demand within their jurisdictions in order to purchase and/or generate alternative energy supplies for residents and businesses within their jurisdiction while maintaining the existing electricity provider for transmission and distribution services; and WHEREAS, CEA Board desires to establish a policy related to consideration and addition of new members. NOW, THEREFORE, BE IT RESOLVED, by the Board of Directors of the Clean Energy Alliance, as follows: Section 1. The Board of Directors of the Clean Energy Alliance hereby approves CEA-17 New Member Addition Policy (Attachment A). The foregoing Resolution was passed and adopted this 27th day of May 2021, by the following vote: AYES: NOES: ABSENT: APPROVED: f—DocuSIgned by: bukuo ‘,...--TE041123CDAA04P8 Kristi Becker, Chair ATTEST: ,---DoeuSigned by: 54;14 R. 0.01444• 2.3P, Ef 1 111Z4 . Sheila Cobian, Board Secretary in1110.- CLEAN ENERGY ALLIANCE CEA-017 NEW MEMBER ADDITION POLICY Clean Energy Alliance (CEA) will consider the addition of any incorporated city or county within San Diego Gas & Electric territory if it meets the requirements as established in the following policy. Authority Section 2.4 of CEA's Joint Powers Agreement (JPA) establishes the authority for CEA to add new agencies under the following conditions: 1.Adoption of a resolution by a two-thirds vote of the entire Board authorizing membership in CEA; 2.Adoption by the proposed member of a CCA ordinance, as required by Public Utilities Code Section 366.2(0(12) and approval and execution of the CEA JPA and other necessary program agreements; 3.Payment of a membership fee, if any, as may be required by the Board to cover CEA costs incurred in connection with adding the new agency; 4.Satisfaction of any other conditions established by the Board. Policy CEA will consider membership of a city or county within SDG&E territory, pursuant to the conditions above, if: •The analysis of the proposed member usage data results in a positive feasibility study using CEA's financial pro forma model; •The addition of the proposed member does not create an undue risk or financial burden to CEA; •Does not create an undue risk to the achievement of the goals of CEA, including the achievement of the Climate Action Plan goals of the current Members. Costs to New Members Condition 3 above specifies that the proposed member may be required to cover CEA costs incurred in connection with adding the new agency. Examples of costs that may be incurred include: Costs of adding new member: New Member Addition Policy Proposed May 27, 2021 •Cost of analysis of historical usage data using CEA's financial pro forma model to determine impact to CEA of the proposed member; and •Preparation of an Amended Implementation Plan and related activities of the expansion, as required by the California Public Utilities Commission. The proposed member will be responsible to cover the CEA direct costs related to the addition of the proposed member and will be eligible for reimbursement of the costs paid by the proposed member within three years of CEA serving customers within the proposed member territory. Costs of CCE implementation into new member territory: •Direct costs related to the implementation of the CCE program in the proposed member territory, such as increased resource adequacy requirements and preparation and mailing of customer notices. CEA will consider using reserves, to the extent available, or other financing sources for costs related to the implementation of CCE service in the new member territory, if the CEA pro forma reflects sufficient revenue is generated within the new member territory to reimburse CEA for those costs within three years. The CEA Board may waive certain criteria or add additional requirements as it deems appropriate in considering the addition of a proposed member. New Member Addition Policy 2 Adopted May 27, 2021