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Home My WebLink About2019-05-22; Community Choice Energy - Governance Options Analysis; Haber, JasonTo the members of the: CITY COUNCIL Date s\ ~'.21 R CA ~ CC .:_ CM __{_ COO ~ DCM {3) ~ May 22, 2019 To: From: Via: Re: Council Memorandum embers of the C'.;}; ~urf Jason Haber, Assistant t n-1~-ril-1 y Manager ~ Scott Chadwick, City M n Community Choice Energy -Governance Options Analysis {cityof Carlsbad Memo ID# 2019049 This memorandum provides an update on the evaluation of Community Choice Energy (CCE) program governance options being conducted in partnership with the cities of Encinitas and Del Mar and scheduled to be completed by the end of June. To help identify the full range of options available to the cities, a Request for Interest (RFI) was released by the City of Encinitas on April 11. The City of San Diego and the City of Solana Beach/Solana Energy Alliance submitted responses; providing two options to consider in addition to forming a Carlsbad-Del Mar-Encinitas partnership and creating a standalone City of Carlsbad CCE. As shown in the attached emails from Dan King (Solana Beach) and Lee Friedman (City of San Diego), the two responding agencies are now seeking to arrange meetings and receive feedback from staff and City Council members regarding their partnership proposals. Since December, staff has participated in monthly meetings convened by the City of San Diego with staff from cities throughout the region and the County of San Diego, to discuss, in concept, the formation of a regional CCE JPA. During these and other meetings with potential CCE partners, staff has shared and discussed the adopted City Council Resolution expressing Carlsbad's intention to pursue a CCE program, and the operating principles identified therein. However, given that our evaluation of CCE governance options is ongoing, and we have not received City Council direction to do so, staff has not actively engaged in any formal negotiations with potential CCE partners. Finally, in addition to submitting the City of San Diego's RFI response, the Office of San Diego Mayor Kevin Faulconer has transmitted the attached "CCA JPA Draft Terms Sheet" to staff and City Council Members directly (and to cities throughout the region and the County of San Diego). The Mayor's Office is seeking feedback; however, given that the document will be included in the evaluation of CCE governance options, staff intends to postpone any further discussion of the proposed terms until the governance analysis is completed and presented for City Manager's Office City Hall 1200 Carlsbad Village Drive I Carlsbad, CA 92008 I 760-434-2820 t CCE Governance Options Analysis May 22, 2019 Page 2 consideration by the City Council. At that time, the City Council will be asked to provide direction to initiate negotiations or other actions deemed necessary to implement the City Council's preferred governance structure and/or partnership arrangement to create a Carlsbad CCE program. Attachments: 1. Email from Dan King, City of Solana Beach 2. Email from Lee Friedman, City of San Diego 3. City of San Diego -Regional CCA JPA Draft Terms Sheet cc: Celia Brewer, City Attorney Elaine Lu key, Chief Operations Officer Attachment 1 From: Dan King <DK.ing@cosb.org> Sent: Tuesday, May 21, 2019 8:29 AM To: Crystal Najera (cnajera@encinitasca.gov) <cnajera@encinitasca.gov>; Clement Brown ( cbrown@delmar.ca. us) <cbrown@delmar.ca. us>; Jason Haber <Jason.Haber@carlsbadca.gov> Subject: Meeting with Elected Officials Hello everyone, I believe I briefly mentioned to you all that our Mayor and another Councilmember were appointed to a subcommittee to reach out to neighboring cities to try and get discussions going at the elected official level to discuss CCA JP A options. Our Mayor would like to get something together sooner than later. What are your respective processes for requesting a meeting like this? Do you need a formal invite from us? However you prefer just let me know and we can get this going. Thanks! Dan King Assistant City Manager City of Solana Beach Phone: (858) 720-2477 www.cityofsolanabeach.org Attachment 2 From: Friedman, Lee [mailto:LFriedman@sandiego.gov] Sent: Monday, May 20, 2019 11:09 AM To: Priya Bhat-Patel <Priya.Bhat-Patel@CarlsbadCA.gov>; Cori Schumacher <Cori.Schumacher@CarlsbadCA.gov> Cc: Manager Internet Email <Manager@CarlsbadCA.gov>; Hooven, Cody <CHooven@sandiego.gov> Subject: CCA JP A Draft Term Sheet Hello Hon. Councilmembers and City Manager, Just wanted to make sure you have the newest clean draft of the CCA JP A term sheet. I believe Cody has already sent versions of this term sheet to your City staff -and discussions on the terms have been had at our CCA regional staff meetings. Still, as we get close to important decision making deadlines, your feedback would be invaluable. We hope a regional JP A is still in consideration for Carlsbad, as we believe we are stronger together than apart. Please feel free to contact Cody or me with any additional questions you might have. We will be reaching out next week to see if you have any comments or edits on the draft term sheet. Sincerely, Lee Friedman Lee Friedman Office of Mayor Faulconer-Infrastructure Policy Manager 619-236-6980 Lfriedman@sandiego.gov CCA JP A Draft Terms Sheet 5.13.2019 Attachment 3 Goals of re2ional CCA (include as 2uidin2 principles in JP A a2reement) • 100% renewable electricity by 2035 ( can be set individually by each city) • Embedded fiscal responsibility • Rates o Establish economic development rates o Establish rates specific to communities of concern o Maintain cost competitive rates • Prioritization of local renewable power development with emphasis on: o Localjobs o Skilled and trained workforce o Investment in communities of concern o No energy from unbundled Renewable Energy Certificates (RECs) o Other economic benefits remaining/returning to JP A partners Benefits of re2ional CCA • Regional/ratepayer consistency in benefits and rate reductions • Economies of scale for procurement of power (both bulk purchase and buying power), services, and staffing • Stronger regulatory and legislative influence in the state • Financial protections for individual members Formation • Founding members: o Agencies who have adopted the JP A agreement by their governing body no later than September 15/30, 2019 AND submitted electricity data to the City of San Diego for the development of a proforma on or before October 18, 2019 ■ Actions needed: adopt CCA ordinance, adopt JP A agreement, appoint a JP A board member ■ First vote of JPA board needed by December 2019 to adopt Implementation Plan o Startup costs will be covered by City of San Diego/JP A and waived for other founding members (pro rata shares expenditures including staffing, bonding, general admin, technical consulting, marketing, regulatory/legal support, data management, etc.) o Consider a neutral party as interim board member if the founding JP A only has two parties at time of foundation, as agreed upon by both founding members • New members: o New members admitted by unanimous consent of all members (action by legislative bodies) after January 1, 2020 Board of Directors • 1 board member from each jurisdiction, elected or appointed o Only board members can cast votes at board meetings and serve as elected officers of the JP A. o Only entities that are eligible to form a CCA are eligible to be a voting member of the board of the JP A. • Each jurisdiction can appoint two alternate board members who may vote on matters when the regular Board member is absent from a Board meeting o Alternate members can cast votes at board meetings when the primary board member is not present and when designated to do so by their jurisdiction o Alternate members may vote in committee, chair committees, and fully participate in discussion and debate during board meetings • Eligibility requirements of members and alternate members o Significant experience in either: • an electric utility or company, or nonprofit providing services to a utility; ■ a regulatory agency or local government body overseeing an electric utility or a company; ■ an academic or nonprofit organization engaged in research and/or advocacy related to the electric sector. o An elected official from a member jurisdiction • Term limits o Each partner jurisdiction shall determine the term of office for their board member and alternates · Board V otin2 • All votes start with an Equal Vote (1 member, 1 vote) with a simple majority. • After an Equal Vote is completed, if two or more board members call for a weighted vote then a weighted vote may be used. • Weighted votes require a supermajority 2/3 vote to pass. • Members can only call for a weighted vote to break a tie or revise a vote initially passed by a simple majority, but no actions can be approved solely by a weighted vote. • A jurisdiction's weighted vote is determined by its percentage of the JPA's annual energy load. o Board will set an annual date for calculating load. • Special Voting: State law requires a supermajority vote under certain conditions. In these instances, an Equal Vote with a supermajority would be required after which, a weighted vote requiring supermajority could be called for with two board members requesting. o Examples: ■ Issue bonds or other debt ■ Amend the JP A agreement or adopt/amend bylaws ■ Remove a party from the JP A agreement Officers of the Board • Elected officers (no more than one from a single member at the same time): o Chair o Vice Chair o Secretary o Treasurer • Appointed Officers (may not be board members or alternate members) o CEO -board should establish qualifications o Auditor -board should establish qualifications Committees • Board can establish committees and commissions as well as criteria in order to qualify for appointment • The following are required: o Executive Committee • Chaired by Chair ■ Vice Chair, Secretary, Treasurer as members o Finance/Risk Committee o Technical Committee o Community Advisory Committee Retained Local Control • Set local renewable portfolio standard (RPS) goals • Withdrawal from JP A with one-year notice *Items to Consider • Allocation of portion of excess revenue to member jurisdictions for administrative support provided to CCA/constituents • Prioritize/weight procurement of local generation developed by member jurisdictions (needs legal analysis) • Rotate Board meetings regionally to ensure all member constituents can access public meetings ( determined by Board)