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Home My WebLink About2024-10-08; City Council; ; Clean Energy Alliance UpdateCA Review CKM Meeting Date: Oct. 8, 2024 To: Mayor and City Council From: Scott Chadwick, City Manager Staff Contact: Jason Haber, Intergovernmental Affairs Director jason.haber@carlsbadca.gov, 442-339-2958 Subject: Districts: Clean Energy Alliance Update All Recommended Action Receive an informational report from Clean Energy Alliance Executive Director Greg Wade on the Clean Energy Alliance’s operations and performance. Executive Summary/Explanation & Analysis The Clean Energy Alliance (CEA) is a community choice energy joint powers authority that began serving electric utility customers within the cities of Carlsbad, Del Mar and Solana Beach in May 2021. Community choice energy programs allow local governments to purchase their own power, and to choose how it is generated. The cities of Escondido and San Marcos joined CEA in 2023, and the cities of Oceanside and Vista joined in 2024. This item will present an informational report summarizing the agency’s operations and performance to date, recent member agency expansions, and an overview of the alliance’s fiscal year 2024-25 operating plans, rates and priorities. Fiscal Analysis This item has no fiscal impact. Next Steps None. Environmental Evaluation This action does not require environmental review because it does not constitute a project within the meaning of the California Environmental Quality Act under California Public Resources Code Section 21065 in that it has no potential to cause either a direct physical change or a reasonably foreseeable indirect physical change in the environment. Exhibits None. Oct. 8, 2024 Item #10 Page 1 of 1 Carlsbad City Council October 8, 2024 1 CLEAN ENERGY ~ 111111111 ALLIANCE CEA Purpose – per Joint Powers Agreement •Support achievement of member Climate Action Plan goals •Reducing greenhouse gas emissions •Promoting electrical rate price stability and cost savings •Fostering consumer choice •Local economic benefits such as job creation, local energy programs and local power development •Promote development and use of wide range of renewable energy sources and energy efficiency programs 2 CLEAN ENERGY ALLIANCE Carlsbad Enrollment Statistics •As of 10/2/2024 •Carlsbad Participation Rate: 91% •CEA Full Territory Participation Rate: 94% •Carlsbad Customers Being Served: 49,739 •Clean Impact Plus 75% Carbon Free 49,365 •Default selection by City Council •Opt Up to Green Impact 100% Renewable: 213 •Opt Down to Clean Impact 50% Renewable: 161 3 CLEAN ENERGY ALLIANCE Carlsbad Enrollment Statistics Customer Class Average Monthly MWh Active Customer Count Est. Annual Active MWh % of Total Active Load Est. Annual Eligible MWh Est. Participation Rate by Load Residential 0.413 42,913 212,677 68%238,428 89% Commercial 1.223 6,826 100,178 32%117,437 85% Total -49,739 312,855 100%355,866 88% 4 CLEAN ENERGY ALLIANCE Current Support of Carlsbad Climate Action Plan •Meeting with City Staff •3 Power supply product offerings – all exceed SDG&E renewable content •Clean Impact 50% Renewable •Clean Impact Plus 75% Carbon-Free •Carlsbad’s default power supply •Green Impact 100% Renewable •Development of CEA programs that support CAP goals 5 CLEAN ENERGY ALLIANCE CEA Programs 6 Clean Energy Alliance Programs •Solar Plus •Solar + Battery Storage at no up front cost •CEA buys the energy from the installer •Solar production counts as part of CEA’s renewable portfolio •CEA resells the energy to the customer through a specific rate •Customer has full use of battery as if they had purchased directly from a solar developer •Local Solar – Feed-in-Tariff •CEA buys energy from smaller scale solar/battery projects •Supports local renewable energy development 7 CLEAN ENERGY ALLIANCE Clean Energy Alliance Programs •Partnership with OhmConnect •Discounted smart thermostats or smart plugs •Incentives for reducing energy use during certain timeframes •Green Impact Champions •Encourage opt up to 100% renewable •Recognition & co-marketing program for customers enrolled in CEA’s 100% renewable energy power supply. •Participants include the Cities of Del Mar, Solana Beach, and Vista who have opted up all municipal accounts to Green Impact 8 CLEAN ENERGY ALLIANCE Other Programs in Carlsbad •Seeking Funding & Designing Programs for Carlsbad •Equitable Building Decarbonization Direct Install Program •CEA is a committed partner in the Southern California Equitable Building Decarbonization Coalition. The Coalition has been awarded $328 million to administer the program. •EBD Program will help low-income residents electrify their homes at no cost. •San Diego Regional Energy Network •Led by SDCP and the County, seeks to provide Energy Efficiency Upgrades throughout San Diego County. •CEA Staff continues to participate in the inaugural advisory committee. 9 CLEAN ENERGY ALLIANCE Procurement 10 CEA JPA Exceeds State Goals •Section 6.4 Renewable Portfolio Standard: •“The Authority’s ultimate objective shall be to achieve – and sustain – a renewable energy portfolio with 100 percent renewable energy availability and usage, at competitive rates, within the Authority service territory by no later than 2035, and then beyond. •Section 6.5 Power Supply Requirements: •The Authority’s power supply base product will be greater than or equal to 50% qualified renewable resources. •In no event will the Authority’s power supply base product contain a lesser amount of renewable resources than the base product provided by SDG&E to its customers. 11 CLEAN ENERGY ALLIANCE 100% Renewable by 2035 0 10 20 30 40 50 60 70 80 90 100 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 RPS CEA Renewable CEA Carbon Free 12 CEA is limited by pricing and availability of renewable energy from existing projects over the next few years, until long-term contracts can be finalized for new projects to be built. CLEAN ENERGY ALLIANCE GHG Emissions Reduction Estimates 13 Load Serving Entity Total Accounts Total Load (MWh) Emission Factor Emissions (lbs. of CO2e) CEA 49,739 472,841 215 101,668,777 SDG&E ""537 253,915,617 Emissions Reduction 152,246,840 •GHG Emissions have been reduced by 60% with CEA CLEAN ENERGY ALLIANCE CEA Adopted Budget FY 24/25 14 Adopted FY 24/25 Budget Key Assumptions/Priorities •Balanced Budget – Revenues meet expenses & reserves •First full fiscal year serving Oceanside & Vista Customers •Energy Cost Forecast Based on Current Market Pricing •Staffing and Administration •~25% over prior level •Accounts for future staff increases and associated office-related expenses •Funding for Programs – $600,000 •No specific program identified yet 15 CLEAN ENERGY ~ A LLIANCE CEA Financial Stability Initiatives •Manage energy portfolio to keep costs as low as possible •Energy costs account for 97% of CEA’s budget •Conservative approach to administration costs •Lean staff •No immediate plans to increase •Administration costs only account for 2.8% of CEA’s budget •Build reserves to mitigate energy price spikes when incurred •Rates set to cover costs and support growth of reserves 16 CLEAN ENERGY ALLIANCE CEA Rate Setting Objectives •Set rates sufficient to cover costs & fund reserves •Achieve goals of reducing greenhouse gas emissions through renewable energy procurement •Minimum 50% renewable increasing to 100% by 2035 •Must always be higher renewable than SDG&E •Increased Renewable energy is higher cost than just meeting state requirements •Provide energy efficiency and demand response programs to customers to assist with managing electric usage and costs •Target to achieve 2% generation cost savings compared to SDG&E •Savings dependent on market conditions 17 CLEAN ENERGY ALLIANCE Adopted FY 2024/25 Budget Amount (Millions) Percent of Budget Revenue $360.9 Expenditures Power Supply $317.0 97% Administrative 9.5 2.8% Non-Operating Exp 1.1 0.1% Total Expenditures $327.6 Change in Net Position $33.3 Operating Reserve (per Policy)$18.0 5% of Rev Undesignated/Contingency $15.3 4.2% of Exp 18 •Balanced budget •Undesignated/Contingency provides stability for fluctuations in revenue and power supply costs CLEAN ENERGY ALLIANCE CEA Rate Change Effective 11/1/2024 •No rate change since February 1, 2023 •Results in revenue sufficient to cover costs and fund reserves out next five years with no additional rate change •Results in average annualized total bill increase of 5.2% •Approx $10 per month •Average monthly bills for CEA customers will be ~ $10 higher than SDG&E effective with 11/1/2024 rate change. •SDG&E rates will change effective 1/1/2025, it is unknown whether SDG&E rates will go up or down. 19 CLEAN ENERGY ~ A LLIANCE Carlsbad Annual Savings/Premium to SDG&E 2021 - 2024 Average Usage - Residential TOU-DR1 Rate $(250.00) $(200.00) $(150.00) $(100.00) $(50.00) $- $50.00 2021 2022 2023 2024 Since 2021 20 Cumulative savings 2021- 2024 – Exceeds 2% target CEA Rate Changes since 5/2021: 1/2022 2/2022 2/2023 11/2024 SDG&E Rate Changes since 5/2021: 11/2021 1/2022 2/2022 6/2022 1/2023 1/2024 3/2024 10/2024 CLEAN ENERGY ALLIANCE Questions/Discussion 21 Contact Information •CEA Customer Service •833-232-3110 •TheCleanEnergyAlliance.org 22 CLEAN ENERGY ALLIANCE