HomeMy WebLinkAbout2019-11-19; Clean Energy Alliance JPA; ; Review Draft Clean Energy Alliance Implementation Plan and Statement of Intent and Schedule Public Hearing for AdoptionDATE:
TO:
FROM:
ITEM 1:
November 19, 2019
CLEAN ENERGY ALLIANCE
STAFF REPORT
Clean Energy Alliance Board of Directors
Dan King, City of Solana Beach, Assistant City Manager
Review Draft Clean Energy Alliance Implementation Plan & Statement of Intent
and Schedule Public Hearing for Adoption
RECOMMENDATION:
Review and provide input on the draft Clean Energy Alliance (CEA) Implementation Plan, and
schedule a public hearing for adoption on December 19, 2019.
BACKGROUND AND DISCUSSION:
Community Choice Aggregation (CCA), authorized by Assembly Bill 117, is a state law that
allows cities, counties and other authorized entities, such as Joint Powers Authorities, 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. The goal
of a CCA is to provide a higher percentage of renewable energy electricity at competitive and
potentially cheaper rates than existing Investor Owned Utilities (IOUs), while giving consumers
local choices and promoting the development of renewable power sources and programs and
local job growth. Under Public Utilities Code section 366.2, customers have the right to opt out
of a CCA Program and continue to receive service from the IOUs.
The cities of Carlsbad, Del Mar and Solana Beach have each adopted resolutions approving the
execution of a joint powers agreement creating CEA and the new CCA program. Solana Beach
has an existing CCA program, Solana Energy Alliance, whose customers will transition to CEA
when the program launches.
Public Utilities Code (Code) Section 366.2(c)(3) requires a prospective CCA to file an
implementation plan and statement of intent (Plan) with the California Public Utilities
Commission (CPUC) for review and certification and is the first step in establishing a Community
Choice Aggregation program.
The Plan is a regulatory compliance document that:
• Must be considered and adopted at a noticed Public Hearing; and
• Must contain the following sections:
o Organization structure, operations & funding
o Rate setting
o Methods for entering and terminating agreements with other entities
o Rights & responsibilities of program participants
o Termination of program
o Energy suppliers.
Code Section 366.2(c)(3) also requires that the Statement of Intent address:
• Universal Access
• Reliability
• Equitable treatment of customer classes
• Compliance with requirements of state law or commission concerning greenhouse
gas emission performance standards.
The Statement of Intent is included as part of the Plan to meet the requirements of the Code.
In addition to the statutory requirements, the Plan discusses the goals and purpose of CEA,
such as renewable energy standards and rate discount targets, as identified in the Joint Powers
Agreement (JPA) including:
• Offering an energy mix for its default service that provides a cleaner power portfolio
than that of San Diego Gas & Electric (SDG&E);
• Offering a voluntary opt-up service at 100% renewable content that customers may
elect to participate in;
• Achieving -and sustaining -the Climate Action Plan goals of the Member Agencies;
and
• Setting generation rates with a target of at least two percent below that of SDG&E's
base product generation rate.
To meet these goals, the Plan assumes an energy mix for its default service that is a minimum
50% renewable energy sourced, increasing to the goal of 100% by no later than 2035, at an
target rate two percent below that offered by SDG&E for its comparable base energy product.
These assumptions were confirmed with the Board at its November 5, 2019 meeting.
The Plan's financial proforma and energy supply forecasting assumes a May 2021 launch date.
This launch timing is assumed as it provides the optimal cash flow for CEA to operate. Should
circumstances require the launch month to be changed, the Board has the discretion to change
the date and notify the CPUC of the new date.
The Plan is written to meet all the requirements to be certified, while providing the Board the
greatest flexibility as it considers program design and options in establishing its CCA program to
meet its goals. The Plan should be considered a statutory requirement and not a detailed
business plan. The Plan sets program targets and goals but does not commit the Board to
specific decisions that have not been fully reviewed or analyzed for feasibility.
Pursuant to CPUC Resolution E-4907, the Plan must be submitted to the CPUC no later than
January 1, 2020, for CEA to be eligible to serve customers in 2021. The CPUC has 90 days to
review and certify that the Plan meets the requirements set forth in the Code, unless the CPUC
staff responds with questions or requests additional information. The Plan has been modeled
after implementation plans that have successfully been through the CPUC review and
certification process.
As previously mentioned, Solana Beach currently operates Solana Energy Alliance (SEA), a CCA
program providing energy to residents and businesses within Solana Beach. In anticipation of
its customers transitioning to CEA service, the Solana Beach City Council will consider an
amendment of the SEA Implementation Plan, outlining the approved actions to join CEA and
the process and impact to customers. The Amended SEA Implementation Plan will be filed with
the CPUC concurrent with the filing of_the CEA Implementation Plan.
Attachment
1. Clean Energy Alliance Community Choice Aggregation Implementation Plan and
Statement of Intent -Draft November 2019
CLEAN ENERGY ALLIANCE
Community Choice Aggregation
Implementation Plan
and
Statement of Intent
Draft November 2019
Attachment 1
Clean Energy Alliance Implementation Plan
TABLE OF CONTENTS
1 Introduction ..................................................................................................................................... 4
1.1Statement of Intent ............................................................................................................................ 5
1.2Organization of this Implementation Plan ......................................................................................... 6
2 Aggregation Process ......................................................................................................................... 7
2.llntroduction ........................................................................................................................................ 7
2.2Process of Aggregation ....................................................................................................................... 8
2.3Consequences of Aggregation ............................................................................................................ 9
2.3.1 Rate Impacts ................................................................................................................... 9
2.3.2 Renewable Energy Impacts ............................................................................................ 9
2.3.3 Greenhouse Gas Reduction .......................................................................................... 10
3 Organization and Governance Structure ........................................................................................ 11
3.1Organizational Overview .................................................................................................................. 11
3.2Governance ....................................................................................................................................... 11
3.3Management .................................................................................................................................... 11
3.4Administration .................................................................................................................................. 12
3.5Finance .............................................................................................................................................. 12
3.6Marketing & Public Affairs ................................................................................................................ 12
3.7Power Resources & Energy Programs .............................................................................................. 13
3.7.1 Electric Supply Operations ........................................................................................... 13
3.8Governmental Affairs & Legal Support ............................................................................................. 14
4 Startup Plan and Funding ............................................................................................................... 15
4.1Startup Activities .............................................................................................................................. 15
4.2Staffing and Contract Services .......................................................................................................... 16
4.3Capital Requirements ....................................................................................................................... 16
4.4Financing Plan ................................................................................................................................... 17
5 Program Phase-In ........................................................................................................................... 18
6 Load Forecast & Resource Plan ...................................................................................................... 19
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Clean Energy Alliance Implementation Plan
6.llntroduction ...................................................................................................................................... 19
6.2Resource Plan Overview ................................................................................................................... 20
6.3Supply Requirements ........................................................................................................................ 21
6.4Customer Participation Rates ........................................................................................................... 22
6.5Customer Forecast ............................................................................................................................ 22
6.6Sales Forecast ................................................................................................................................... 23
6.7Capacity Requirements ..................................................................................................................... 23
6.8Renewables Portfolio Standards Energy Requirements ................................................................... 25
6.8.1 Basic RPS Requirements ............................................................................................... 25
6.8.2 CEA's Renewables Portfolio Standards Requirement .................................................. 25
6.9Purchased Power .............................................................................................................................. 25
6.l0Renewable Resources ..................................................................................................................... 26
6.llSmall, Local and Diverse Business Enterprise Procurement.. ......................................................... 26
6.12Energy Efficiency ............................................................................................................................. 26
7 Financial Plan .................................................................................................................................. 27
7.lDescription of Cash Flow Analysis .................................................................................................... 27
7 .2Cost of Program Operations ............................................................................................................. 27
7.3Revenues from CCA Program Operations ......................................................................................... 27
7.4Cash Flow Analysis Results ............................................................................................................... 28
7.5Program Implementation Pro Forma ............................................................................................... 28
7.6Clean Energy Alliance Financings ...................................................................................................... 29
7.7Renewable Resource Project Financing ............................................................................................ 29
8 Rate Setting, Program Terms and Conditions ................................................................................ 30
8.llntroduction ...................................................................................................................................... 30
8.2Rate Policies ...................................................................................................................................... 30
8.3Rate Competitiveness ....................................................................................................................... 30
8.4Rate Stability ..................................................................................................................................... 31
8.5Equity among Customer Classes ....................................................................................................... 31
8.6Customer Understanding ................................................................................................................. 31
ii Draft November 2019
Clean Energy Alliance Implementation Plan
8.7Revenue Sufficiency .......................................................................................................................... 31
8.8Rate Design ....................................................................................................................................... 32
8.9Net Energy Metering ........................................................................................................................ 32
8.l0Disclosure and Due Process in Setting Rates and Allocating Costs among Participants ................ 32
9 Customer Rights and Responsibilities ............................................................................................ 33
9.lCustomer Notices ............................................................................................................................. 33
9.2Termination Fee ................................................................................................................................ 34
9.3Customer Confidentiality .................................................................................................................. 34
9.4Responsibility for Payment ............................................................................................................... 34
9.SCustomer Deposits ........................................................................................................................... 35
10 Procurement Process ..................................................................................................................... 36
10.llntroduction .................................................................................................................................... 36
10.2Procurement Methods ................................................................................................................... 36
10.3Key Contracts .................................................................................................................................. 36
10.3.1 Electric Supply .............................................................................................................. 36
10.3.2 Data Management Contract ......................................................................................... 37
11 Contingency Plan for Program Termination ................................................................................... 37
11.llntroduction .................................................................................................................................... 37
ll.2Termination by Clean Energy Alliance ............................................................................................ 37
12 Appendix A: Clean Energy Alliance Resolution No. 2019-### (Adopting Implementation Plan) ... 39
iii Draft November 2019
Clean Energy Alliance Implementation Plan
1 INTRODUCTION
The Clean Energy Alliance ("CEA" or "Alliance"), located within San Diego County, is a Joint Powers
Authority ("JPA") pursuing the implementation of a community choice aggregation program ("CCA" or
"Program"). Founding Member Agencies of CEA include the following three (3) municipalities within the
County of San Diego, which have elected to allow the JPA to provide electric generation service within
their respective jurisdictions:
City of Carlsbad
City of Del Mar
City of Solana Beach
This Implementation Plan and Statement of Intent ("Implementation Plan") describes CEA's plans to
implement a voluntary CCA program for electric customers within the jurisdictional boundaries of the
Member Agencies. Electric customers within the Cities of Carlsbad and Del Mar currently take bundled
electric service from San Diego Gas and Electric ("SDG&E"). Electric customers within the City of Solana
Beach currently have the option oftaking electric service from Solana Energy Alliance ("SEA"), an existing
Community Choice Aggregation program, or as a bundled customer of SDG&E. The Program will provide
electricity customers the opportunity to jointly procure electricity from competitive suppliers, with such
electricity being delivered over SDG&E's transmission and distribution system. The planned start date for
the Program is May 1, 2021. All current SDG&E customers within the Del Mar and Carlsbad service area
will receive information describing the CEA Program and will have multiple opportunities to opt out and
choose to remain full requirement ("bundled") customers of SDG&E, in which case they will not be
enrolled. Current SEA customers will receive information describing the CEA Program and their transition
from SEA to CEA. They will also have multiple opportunities to opt out. Thus, participation in the CEA
Program is completely voluntary. However, as provided by law, customers will be automatically enrolled
according to the anticipated schedule later described in Chapter 5 unless they affirmatively elect to opt-
out. Once, and as long as CEA is operational and all SEA customers have transitioned to CEA, SEA will cease
to be an operational CCA.
Implementation of CEA will enable customers within CEA's service area to take advantage of the
opportunities granted by Assembly Bill 117 ("AB 117"), the Community Choice Aggregation Law.
CEA's primary objectives in implementing this Program are to:
1) Procure an electric supply portfolio with higher renewable content than SDG&E;
2) Provide cost competitive electric services when compared to SDG&E;
3) Gain local control in rate setting to provide long-term rate stability for residents and businesses;
4) Meet Climate Action Plan goals of the Member Agencies.
The California Public Utilities Code provides the relevant legal authority for the Alliance to become a
Community Choice Aggregator and invests the California Public Utilities Commission ("CPUC" or
"Commission") with the responsibility for establishing the cost recovery mechanism that must be in place
before customers can begin receiving electrical service through the CEA Program. The CPUC also has
responsibility for registering the JPA as a Community Choice Aggregator and ensuring compliance with
Introduction 4 Draft November 2019
Clean Energy Alliance Implementation Plan
basic consumer protection rules. The Public Utilities Code requires adoption of an Implementation Plan
at a duly noticed public hearing. The plan must then be filed with the Commission.
The Alliance is also aware that a CCA Program-specific Renewables Portfolio Standard ("RPS")
Procurement Plan must be completed and submitted to the CPUC during its CCA registration process -
the Alliance anticipates that the renewable energy targets reflected in this Implementation Plan will meet
or exceed applicable procurement mandates, including prudent planning reserves.
On December 19, 2019, the JPA, at a duly noticed public hearing, adopted this Implementation Plan,
through Resolution No. 2019-XX (a copy of which is included as part of Appendix A).
The Commission has established the methodology to use to determine the cost recovery mechanism, and
SDG&E has approved tariffs for imposition of the cost recovery mechanism. The cities of Del Mar and
Carlsbad have adopted an ordinance to implement a CCA program through its participation in CEA and
Solana Beach adopted its ordinance to implement a CCA program as part of implementing SEA. Each of
the Members has adopted a resolution permitting CEA to provide service within its jurisdiction1. Having
accomplished these milestones, CEA submits this Implementation Plan to the CPUC. Following the CPUC's
acknowledgement of its receipt of this Implementation Plan and resolution of any outstanding issues, CEA
will submit a draft customer notice, file a draft Renewable Portfolio Standards Procurement Plan, submit
the Financial Security Requirement and execute the Service Agreement with San Diego Gas & Electric as
established in CPUC Resolution E-4907. CEA will take the final steps needed to register as a CCA and
participate in the year-ahead Resource Adequacy ("RA") process prior to initiating the customer
notification and enrollment process.
1.1 STATEMENT OF INTENT
The content of this Implementation Plan complies with the statutory requirements of AB 117. As required
by Public Utilities Code Section 366.2(c)(3), this Implementation Plan details the process and
consequences of aggregation and provides the Alliance's statement of intent for implementing a CCA
program that includes all of the following:
► Universal access;
► Reliability;
► Equitable treatment of all customer classes; and
► Any requirements established by state law or by the CPUC concerning aggregated service.
1 Copies of individual ordinances adopted by the Clean Energy Alliance's Members are included within Appendix A
Introduction 5 Draft November 2019
Clean Energy Alliance Implementation Plan
1.2 ORGANIZATION OF THIS IMPLEMENTATION PLAN
The remainder of this Implementation Plan is organized as follows:
Chapter 2: Aggregation Process
Chapter 3: Organizational Structure
Chapter 4: Startup Plan & Funding
Chapter 5: Program Phase-In
Chapter 6: Load Forecast & Resource Plan
Chapter 7: Financial Plan
Chapter 8: Rate setting
Chapter 9: Customer Rights and Responsibilities
Chapter 10: Procurement Process
Chapter 11: Contingency Plan for Program Termination
Appendix A: Clean Energy Alliance Resolution No. 2019-XXX (Adopting Implementation Plan)
The requirements of AB 117 are cross-referenced to Chapters of this Implementation Plan in the
following table.
Introduction 6 Draft November 2019
Clean Energy Alliance Implementation Plan
AB 117 Cross References
AB 117 REQUIREMENT IMPLEMENTATION PLAN CHAPTER
Statement of Intent Chapter 1: Introduction
Process and consequences of aggregation Chapter 2: Aggregation Process
Organizational structure of the program, its Chapter 3: Organizational Structure
operations and funding Chapter 4: Startup Plan & Funding
Chapter 7: Financial Plan
Disclosure and due process in setting rates and Chapter 8: Rate setting
allocating costs among participants
Rate setting and other costs to participants Chapter 8: Rate setting
Chapter 9: Customer Rights and
Responsibilities
Participant rights and responsibilities Chapter 9: Customer Rights and
Responsibilities
Methods for entering and terminating Chapter 10: Procurement Process
agreements with other entities
Description of third parties that will be Chapter 10: Procurement Process
supplying electricity under the program,
including information about financial,
technical and operational capabilities
Termination of the program Chapter 11: Contingency Plan for Program
Termination
Methods for ensuring procurement from Chapter 6: Load Forecast and Resource Plan
small, local, and diverse business enterprises
in all categories, including, but not limited to,
renewable energy, energy storage system, and
smart grid projects.
2 AGGREGATION PROCESS
2.1 INTRODUCTION
This Chapter describes the background leading to the development of this Implementation Plan and
describes the process and consequences of aggregation, consistent with the requirements of AB 117.
Aggregation Process 7 Draft November 2019
Clean Energy Alliance Implementation Plan
In 2017 the cities of Del Mar, Carlsbad and other interested partner agencies engaged the assistance of a
technical consultant to evaluate the feasibility of establishing a CCA program, considering various agency
member formations. The studies revealed that a CCA program was viable, offering customers rates
competitive with SDG&E. Throughout early 2019 the Member Agencies evaluated several different
options related to the provision of CCA services to their service territories. SEA has been a financially
stable CCA since launching in June 2018. The financial model reflected in Section 7, Table 9, demonstrates
that the proposed CEA is a financially viable CCA program.
The CEA was formed with the following objectives: 1) procure a power supply from a minimum 50%
renewable energy sources; 2) help meet the goals of the Member Agency's Climate Action Plans to reduce
GHG emissions; 3) provide cost-competitive electric services to the customers of CEA; 4) gain local control
of the territory's energy procurement needs; and S) provide local clean energy programs and benefits.
The City of Solana Beach ("Solana Beach") currently operates SEA, the only CCA that is currently serving
customers in SDG&E territory. Solana Beach intends to transition its customers from SEA to CEA during
CEA's launch month of May 2021. Once its customers are fully transferred to CEA, Solana Beach will no
longer operate SEA. Solana Beach will submit an amended Implementation Plan, concurrent with this CEA
Implementation Plan, that reflects its customers transitioning to CEA.
The Alliance released a draft Implementation Plan in November 2019, which described the planned
organization, governance and operation of the CCA Program. Following consideration of comments
related to the draft document, a final Implementation Plan was prepared and duly adopted by the CEA
Board of Directors.
The CEA Program represents a culmination of planning efforts that are responsive to the expressed needs
and priorities of the residents and business community within the service territory. The Alliance plans to
expand the energy choices available to eligible customers through creation of innovative new programs
for voluntary purchases of renewable energy and net energy metering to promote customer-owned
renewable generation.
2.2 PROCESS OF AGGREGATION
Before they are enrolled in the Program, prospective CEA customers will receive two written notices in
the mail that will provide information needed to understand the Program's terms and conditions of
service and explain how customers, if they desire, can opt-out of the Program. All customers that do not
follow the opt-out process specified in the customer notices will be automatically enrolled, and service
will begin at their next regularly scheduled meter read date following the date of automatic enrollment,
subject to the service phase-in plan described in Chapter 5. The initial enrollment notices will be provided
to customers in March 2021, with a second notice being provided in April 2021.
Customers enrolled in the CEA Program will continue to have their electric meters read and to be billed
for electric service by the distribution utility (SDG&E). The electric bill for Program customers will show
separate charges for generation procured by CEA as well as other charges related to electricity delivery
and other utility charges assessed by SDG&E.
After service cutover, customers will have approximately 60 days (two billing cycles) to opt-out of the CEA
Program without penalty and return to the distribution utility (SDG&E). CEA customers will be advised of
Aggregation Process 8 Draft November 2019
Clean Energy Alliance Implementation Plan
these opportunities via the distribution of two additional enrollment notices provided within the first two
months of service. Customers that opt-out between the initial cutover date and the close of the post
enrollment opt-out period will be responsible for program charges for the time they were served by CEA
but will not otherwise be subject to any penalty for leaving the program. Customers that have not opted-
out within thirty days of the fourth enrollment notice will be deemed to have elected to become a
participant in the CEA Program and to have agreed to the CEA Program's terms and conditions, including
those pertaining to requests for termination of service, as further described in Chapter 8.
2.3 CONSEQUENCES OF AGGREGATION
2.3.1 Rate Impacts
CEA customers will pay the generation charges set by the Alliance and no longer pay the costs of SDG&E
generation. Customers enrolled in the Program will be subject to the Program's terms and conditions,
including responsibility for payment of all Program charges as described in Chapter 9.
The Alliance's rate setting policies described in Chapter 7 establish a goal of providing rates that are
competitive with the projected generation rates offered by the incumbent distribution utility (SDG&E).
The Alliance will establish rates sufficient to recover all costs related to operation of the Program, and the
CEA Board will adopt actual rates.
Initial CEA Program rates will be established following approval of the Alliance's inaugural program
budget, reflecting final costs from the CEA Program's energy procurement. The Alliance's rate policies
and procedures are detailed in Chapter 7. Information regarding final CEA Program rates will be disclosed
along with other terms and conditions of service in the pre-enrollment and post-enrollment notices sent
to potential customers.
Once CEA gives definitive notice to SDG&E that it will commence service, CEA customers will generally not
be responsible for costs associated with SDG&E's future electricity procurement contracts or power plant
investments. Certain pre-existing generation costs and new generation costs that are deemed to provide
system-wide benefits will continue to be charged by SDG&E to CCA customers through separate rate
components, called the Cost Responsibility Surcharge and the New System Generation Charge. These
charges are shown in SDG&E's electric service tariffs, which can be accessed from the utility's website,
and the costs are included in charges paid by both SDG&E bundled customers as well as CCA and Direct
Access customers2• SEA customers that transition to CEA will maintain their current Power Charge
Indifference Adjustment ("PCIA") vintage of 2017, having already departed from SDG&E generation
services. Eligible Del Mar and Carlsbad customers who transition to CEA service will be assigned a 2020
PCIA vintage.
2.3.2 Renewable Energy Impacts
A second consequence of the Program will be an increase in the proportion of energy generated and
supplied by RPS-eligible renewable resources. The resource plan includes procurement of renewable
energy in excess of California's renewable energy procurement mandate, and SDG&E's forecast
2 For SDG&E bundled service customers, the Power Charge Indifference Adjustment element of the Cost Responsibility Surcharge
is contained within the CCA-CRS rate tariff.
Aggregation Process 9 Draft November 2019
Clean Energy Alliance Implementation Plan
renewable percentage, with a goal of providing a minimum of 50% renewable energy at launch, for all
enrolled customers. Consistent with Senate Bill 100, CEA renewable energy will increase toward 60% by
2030. CEA customers may also voluntarily participate in a higher renewable supply option, potentially up
to 100%. To the extent that customers choose CEA's voluntary renewable energy option, the renewable
content of CEA's aggregate supply portfolio will further increase. Initially, requisite renewable energy
supply will be sourced through one or more short-term power purchase agreements; however, shortly
after launching operations, long-term procurement of renewable energy will begin to meet California's
long-term renewable energy contracting requirements that become effective in Compliance Period 4 and
beyond 3 • Over time, the Alliance will also consider independent development of new renewable
generation resources.
2.3.3 Greenhouse Gas Reduction
A third consequence of the Program will be an anticipated reduction in the greenhouse gas emissions
attributed to the CEA supply portfolio as compared to SDG&E. An important objective of the CEA
formation is to support the Climate Action Plans of the Member Agencies. Therefore, CEA will set
aggressive GHG-emissions reduction targets and acquire zero or low GHG-emitting supply to achieve
those targets.
3 Under California's RPS Program, 65 percent of mandated renewable energy purchases must be sourced from eligible long-term
contracts beginning in calendar year 2021.
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Clean Energy Alliance Implementation Plan
3 ORGANIZATION AND GOVERNANCE STRUCTURE
This section provides an overview of the organizational structure of CEA and its proposed implementation
of the CCA program. Specifically, the key agreements, governance, management, and organizational
functions of CEA are outlined and discussed below.
3.1 ORGANIZATIONAL OVERVIEW
CEA is a joint powers authority formed under the California Joint Exercise of Powers Act. It was established
on November 4, 2019 with a Board of Directors serving as its Governing Board. The Board is responsible
for establishing CEA's Program policies and objectives and overseeing CEA's operation. In December 2019,
the Board appointed an Interim Chief Executive Officer ("CEO") to manage the operation of the Alliance
in accordance with policies adopted by the Board.
3.2 GOVERNANCE
The CEA Program will be governed by the CEA Board, which shall include one appointed designee from
each of the Member Agencies. The Members of CEA include three (3) municipalities within the County of
San Diego, Del Mar, Carlsbad and Solana Beach, all of which have elected to allow CEA to provide electric
generation service within their respective jurisdictions. The Alliance's Board will be comprised of
representatives appointed by each of the Members in accordance with the JPA agreement. The CEA
Program will be operated under the direction of an CEO appointed by the Board, with legal and regulatory
support provided by a Board appointed General Counsel.
The Board's primary duties are to establish program policies, approve rates and provide policy direction
to the CEO, who has general responsibility for program operations, consistent with the policies established
by the Board. The Board will elect a Chair and Vice Chair and may form various standing and ad hoc
committees, as appropriate, which would have responsibility for evaluating various issues that may affect
the Alliance and its customers, including rate-related and power contracting issues, and would provide
analytical support and recommendations to the Board in these regards.
3.3 MANAGEMENT
The CEA CEO has management responsibilities over the functional areas of Administration & Finance,
Marketing & Public Affairs, Power Resources & Energy Programs, and Government Affairs, as well as the
assisting the Board with overall supervision of the legal services provided by the Alliance's General
Counsel. In performing the defined obligations to CEA, the CEO may utilize a combination of internal staff
and/or contractors. Certain specialized functions needed for program operations, namely the electric
supply and customer account management functions described below, will be performed by experienced
third-party contractors.
Major functions of the Alliance that will be managed by the CEO are summarized below.
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Clean Energy Alliance Implementation Plan
3.4 ADMINISTRATION
CEA's CEO will be responsible for managing the organization's human resources and administrative
functions and will coordinate with the CEA Board, as necessary, with regard to these functions. The
functional area of administration will include oversight of any employee hiring and termination,
compensation and benefits management, identification and procurement of requisite office space and
various other issues. It is likely that existing Member Agency staff will initially assist with this function.
3.5 FINANCE
The CEO is also responsible for managing the financial affairs of the Alliance, including the development
of an annual budget, revenue requirement and rates; managing and maintaining cash flow requirements;
arranging potential bridge loans as necessary; and other financial tools.
Revenues via rates and other funding sources (such as a rate stabilization fund, when necessary) must, at
a minimum, meet the annual budgetary revenue requirement, including recovery of all expenses and any
reserves or coverage requirements set forth in bond covenants or other agreements. The Alliance will
have the flexibility to consider rate adjustments, administer a standardized set of electric rates, and may
offer optional rates to encourage policy goals such as encouraging renewable generation and incentivizing
peak demand reduction, provided that the overall revenue requirement is achieved.
CEA's finance function will be responsible for preparing the annual budget, arranging financing necessary
for any capital projects, preparing financial reports, managing required audits and ensuring sufficient cash
flow for successful operation of the CEA Program. The finance function will play an important role in risk
management by monitoring the credit of energy suppliers so that credit risk is properly understood and
mitigated. In the event that changes in a supplier's financial condition and/or credit rating are identified,
the Alliance will be able to take appropriate action, as would be provided for in the electric supply
agreement(s).
3.6 MARKETING & PUBLIC AFFAIRS
The marketing and public affairs functions include general program marketing and communications as
well as direct customer interface ranging from management of key account relationships to call center
and billing operations. The Alliance will conduct program marketing to raise consumer awareness of the
CEA Program and to establish its "brand" in the minds of the public, with the goal of retaining and
attracting as many customers as possible into the CEA Program. Communications will also be directed at
key policy-makers at the state and local level, community business and opinion leaders, and the media.
In addition to general program communications and marketing, a significant focus on customer service,
particularly representation for key accounts, will enhance the Alliance's ability to differentiate itself as a
highly customer-focused organization that is responsive to the needs of the community. CEA, through its
data services provider, will also establish a customer call center designed to field customer inquiries and
routine interaction with customer accounts.
The customer service function also encompasses management of customer data. Customer data
management services include retail settlements/billing-related activities and management of a customer
database. This function processes customer service requests and administers customer enrollments and
departures from the CEA Program, maintaining a current database of enrolled customers. This function
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Clean Energy Alliance Implementation Plan
coordinates the issuance of monthly bills through SDG&E's billing process and tracks customer payments.
Activities include the electronic exchange of usage, billing, and payments data with SDG&E and CEA,
tracking of customer payments and accounts receivable, issuance of late payment and/or service
termination notices (which would return affected customers to bundled service), and administration of
customer deposits in accordance with credit policies of the Alliance.
The customer data management services function also manages billing-related communications with
customers, customer call centers, and routine customer notices. The Alliance will contract with an
experienced third party to perform the customer account and billing services functions.
3. 7 POWER RESOURCES & ENERGY PROGRAMS
CEA must plan for meeting the electricity needs of its customers utilizing resources consistent with its
policy goals and objectives as well as applicable legislative and/or regulatory mandates. CEA's long-term
resource plans (addressing the 10-20-year planning horizon) will comply with California Law and other
pertinent requirements of California regulatory bodies. In particular, CEA is aware of compulsory
Integrated Resource Planning requirements, as identified in Senate Bill 350 (de Leon, 2015), which require,
among other provisions, that CCAs periodically submit integrated resource planning documents and
related materials to the CPUC. Specifically, the Public Utilities Code requires that, "The plan of a
community choice aggregator shall be submitted to its governing board for approval and provided to the
commission for certification, consistent with paragraph (5) of subdivision (a) of section 366.2". The
Alliance intends to comply with this requirement similar to the manner in which other CCA organizations
have complied and will rely on the experience gained by such organizations in completing pertinent data
templates and documentation during future processes. Integrated resource planning efforts of the
Alliance will make use of demand side energy efficiency, distributed generation and demand response
programs as well as traditional supply options, which rely on structured wholesale transactions to meet
customer energy requirements. Integrated resource plans will be updated and adopted by the Board as
required by state law and applicable regulations. The Alliance is also aware of the need to periodically
prepare and submit RPS Procurement Plans, which shall address the manner in which the CEA Program
will achieve compliance with pertinent provisions of California's RPS mandate. As required, the first RPS
Procurement Plans will be developed and submitted during the 90-day certification period related to this
Implementation Plan.
The Alliance may develop and administer complementary energy programs that may be offered to CEA
customers, including green pricing, energy efficiency, net energy metering and various other programs
that may be identified to support the overarching goals and objectives of the Alliance.
3.7.1 Electric Supply Operations
Electric supply operations encompass the activities necessary for wholesale procurement of electricity to
serve end use customers. These highly specialized activities include the following:
► Electricity Procurement-assemble a portfolio of electricity resources to supply the electric needs
of Program customers.
► Risk Management -application of standard industry techniques to reduce exposure to the
volatility of energy and credit markets and insulate customer rates from sudden changes in
wholesale market prices.
Organization and Governance Structure 13 Draft November 2019
Clean Energy Alliance Implementation Plan
► Load Forecasting -develop load forecasts, both long-term for resource planning, short-term for
the electricity purchases, and sales needed to maintain a balance between hourly resources and
loads.
► Scheduling Coordination -scheduling and settling electric supply transactions with the California
Independent System Operator ("CAISO").
The Alliance will contract with one or more experienced and financially sound third-party energy services
firms to perform most of the electric supply operations for the CEA Program. These requirements include
the procurement of energy, capacity and ancillary services, scheduling coordinator services, short-term
load forecasting and day-ahead and real-time electricity trading.
3.8 GOVERNMENTAL AFFAIRS & LEGAL SUPPORT
The CEA Program will require ongoing regulatory and legislative representation to manage various
regulatory compliance filings related to resource plans, RA, compliance with California's RPS program and
overall representation on issues that will impact CEA customers. The Alliance will maintain an active role
at the CPUC, the California Energy Commission, the California Independent System Operator ("CAISO"),
the California legislature and, as necessary, the Federal Energy Regulatory Commission with either in-
house staff or contracted third parties with experience in the energy market arena.
CEA's General Counsel is hired by and reports to the Board of Directors. However, the CEO will assist the
Board in supervising the legal services as provided by General Counsel. The Alliance may retain specialized
outside legal services, as necessary, to review power purchase agreements, give advice on regulatory
matters, and provide other specialized legal services related to activities of the CEA Program. In addition,
CEA's wholesale services provider may assist with regulatory filings related to wholesale procurement.
Organization and Governance Structure 14 Draft November 2019
Clean Energy Alliance Implementation Plan
4 STARTUP PLAN AND FUNDING
This Chapter presents the Alliance's plans for the start-up period, including necessary expenses and capital
outlays. As described in the previous Chapter, the Alliance will utilize a mix of internal staff and
contractors in its CCA Program implementation and operation.
4.1 STARTUPACTIVITIES
The initial program startup activities include the following:
► Hire staff and/or contractors to manage implementation
► Adopt policies and procedures for the operation of CEA
► Identify qualified suppliers (of requisite energy products and related services) and negotiate
supplier contracts
• Electric supplier and scheduling coordinator
• Data management provider (if separate from energy supply)
► Define and execute communications plan
• Customer research/information gathering
• Media campaign
• Key customer/stakeholder outreach
• Informational materials and customer notices
• Customer call center
• Website
► Post financial security requirement and complete requisite registration requirements
► Establish reserves that may be required by energy suppliers
► Pay utility service initiation, notification and switching fees
► Perform customer notification, opt-out and transfers
► Conduct load forecasting
► Establish rates
► Legal and regulatory support
► Financial management and reporting
Some costs related to starting up the CEA Program may be the responsibility of the CEA Program's
contractors. These may include capital requirements needed for collateral/credit support for electric
Startup Plan and Funding 15 Draft November 2019
Clean Energy Alliance Implementation Plan
supply expenses, customer information system costs, bond requirements, electronic data exchange
system costs, call center costs, and billing administration/settlements systems costs.
4.2 STAFFING AND CONTRACT SERVICES
Personnel in the form of Alliance staff, Member Agency staff, or contractors will be utilized as needed to
match workloads involved in forming CEA, managing contracts, and initiating customer
outreach/marketing during the pre-operations period. During the startup period, minimal personnel
requirements may include a CEO, legal support, and other personnel needed to support regulatory,
procurement, finance, legal, marketing, and communications activities. This support will come from
existing Member Agency staff and contractors. Once operational, additional staff and/or contractors may
be retained, as needed, to support the rollout of additional value-added services (e.g., efficiency projects)
and local generation projects and programs.
4.3 CAPITAL REQUIREMENTS
The start-up of the CCA Program will require capital for three major functions: (1) staffing and contractor
costs; (2) deposits and reserves; and (3) operating cash flow. Based on the Alliance's anticipated start-up
activities and implementation schedule, a total need of $4.4M has been identified to support the
aforementioned functions. Out of the $4.4 capital requirements, $450,000 will be funded from member
advances for costs incurred in fiscal year 19/20, $959,000 is related to the implementation/startup efforts
(i.e., rate setting, power procurement and contract negotiations, marketing and communications,
regulatory compliance, SDG&E security deposit, etc.) in order to serve customers by May 2021. A deposit
in the amount of $500,000 will also need to be posted to CAISO for the Alliance to be a Congestion
Revenue Rights Holder. The remaining $2,500,000 is the "float" required for CEA to pay its monthly bills
before the program generates enough internal cash to self-fund its working capital needs.
The capital requirement is further broken down as follows:
Clean Energy Alliance
Draft Budget
Fiscal Years 19/20 and 20/21
FY 19/20
Staffing/Consultants $ 50,000.00
Legal Services 130,000.00
Professiona I Services 115,000.00
CCA Bond 147,000.00
CAISO Fee
calCCA Membership & Dues 1,500.00
Print/Mail Services
Advertising
Graphic Design Services 6,500.00
Website Maintenance
Audit Services
Cash Flow & Lockbox Reserves
TOTAL PROJECTED BUDGET $450,000.00
Startup Plan and Funding 16
FY 20/21
$ 235,000.00
200,000.00
200,000.00
500,000.00
130,000.00
132,000.00
10,000.00
10,000.00
2,500.00
40,000.00
2,500,000.00
$ 3,959,500.00
Draft November 2019
Clean Energy Alliance Implementation Plan
The finance plan in Chapter 7 provides additional detail regarding the Alliance's expected capital
requirements and general Program finances. All the capital required for start-up will be provided through
in-kind support from Member Agencies, deferred fees, Member advances and direct loans.
Related to the Alliance's initial capital requirement, this amount is expected to cover staffing and
contractor costs during startup and pre-startup activities, including direct costs related to public relations
support, technical support, and customer communications. Requisite deposits and operating reserves are
also reflected in the initial capital requirement, including the following items: 1) operating reserves to
address anticipated cash flow variations; 2) deposit with the CAISO prior to commencing market
operations (if required); 3) Financial Security Requirement (CCA bond posted with the CPUC); and 4)
SDG&E service fee deposit, if required.
Operating revenues from sales of electricity will be remitted to CEA beginning approximately sixty days
after the initial customer enrollments. This lag is due to the distribution utility's standard meter reading
cycle of 30 days and a 30-day payment/collections cycle. CEA will need working capital to support
electricity procurement and costs related to program management, which is included in CEA's initial
$4,400,000 capital requirement.
4.4 FINANCING PLAN
CEA's initial capital requirement will be met through a combination of financing mechanisms. CEA will be
seeking assistance through deferred fees from contractors and vendors, loans and/or lines of credit from
financial institutions and in-kind services and advances provided by Member Agencies (to be reimbursed
in the future). CEA will repay back the principal and interest costs associated with the start-up funding
via retail generation rates charged to CEA customers. It is anticipated that the start-up costs will be fully
recovered through such customer generation rates within the first three years of operations.
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Clean Energy Alliance Implementation Plan
5 PROGRAM PHASE-IN
CEA plans to roll out its service offering to all eligible customers in a single phase at start-up. There are
approximately 58,000 eligible customer accounts within the Alliance's boundaries, resulting in a single-
phase roll-out being reasonable and the most efficient way for CEA to serve customers beginning in May
2021.
Solana Beach is currently providing energy to its residents and businesses through SEA, its community
choice aggregation program. During May 2021, SEA customers will transfer from SEA to CEA. Once, and
as long as CEA is operational and all SEA customers have transitioned to CEA, SEA will cease operating as
a community choice aggregation program.
It is possible that Net Energy Metering ("NEM") customers may be enrolled over multiple periods to
mitigate the impact of SDG&E NEM true-up treatment.
Program Phase-In 18 Draft November 2019
Clean Energy Alliance Implementation Plan
6 LOAD FORECAST & RESOURCE PLAN
6.1 INTRODUCTION
This Chapter describes the planned mix of electric resources that will meet the energy demands of CEA
customers using a diversified portfolio of electricity supplies. Several overarching policies govern the
resource plan and the ensuing resource procurement activities that will be conducted in accordance with
the plan. The key policies are as follows:
• Develop a portfolio with a minimum 50% renewable energy and lower greenhouse gas ("GHG")
emissions than SDG&E.
• Manage a diverse resource portfolio to increase control over energy costs and maintain competitive
and stable electric rates.
• Comply with RA procurement requirements as established by CPUC Resolution E-4907.
• Comply with applicable renewable energy procurement mandates, as increased under Senate Bill 100
("SB 100"; de Leon, 2018).
• Comply with SB 350, periodically preparing and submitting (for certification by the CPUC) an
Integrated Resource Plan ("IRP").
• Comply with applicable requirements for ensuring procurement from small, local and diverse business
enterprises in all categories, including, but not limited to, renewable energy, energy storage system,
and smart grid projects as required by SB 255 ("SB 255"; Bradford, 2019).
• As applicable, annually prepare and submit a detailed and verifiable plan to the CPUC for increasing
procurement from small, local and diverse business enterprises in all categories, including, but not
limited to, renewable energy, energy storage system, and smart grid projects as required by SB 255.
• As applicable, annually prepare and submit a report to the CPUC regarding its procurement from
women, minority, disabled veteran and LGBTQ business enterprises in all categories, including, but
not limited to, renewable energy, energy storage system, and smart grid projects as required by SB
255.
The plan described in this section would accomplish the following:
► Procure Competitive Supply: Procure energy, RA, renewables and low-GHG supply through
competitive processes in the open market to support the potential offering of service options to
include a 100% renewable energy voluntary opt-up product.
► Use Best Practices Risk Management: Maintain rate competitiveness by using a dollar-cost-
averaging approach with particular attention to the methodology used in the power charge
indifference adjustment ("PCIA") calculation. Use stochastic modeling to measure and achieve
risk management objectives.
► Achieve Environmental Objectives: Procure supply to offer two distinct generation rate tariffs: 1)
a voluntary 100% renewable energy offered to CEA customers on a price premium basis relative
Load Forecast & Resource Plan 19 Draft November 2019
Clean Energy Alliance Implementation Plan
to CEA's default retail option; and 2) a default CEA service option that is sourced from a minimum
50% renewable energy.
► Provide NEM Tariff: Encourage distributed renewable generation in the local area through the
offering of a net energy metering tariff that is more remunerative than SDG&E's NEM tariff.
► Compliance: Ensure compliance with participation in the Annual and Monthly RA process.
► Diversity: Encourage procurement from small, local and diverse business enterprises.
CEA will comply with regulatory rules applicable to California load serving entities. CEA will arrange for
the scheduling of sufficient electric supplies to meet the demands of its customers. CEA will adhere to
capacity reserve requirements established by the CPUC and the CAISO designed to address uncertainty in
load forecasts and potential supply disruptions caused by generator outages and/or transmission
contingencies. These rules also ensure that physical generation capacity is in place to serve CEA's
customers, even if there were a need for the Alliance's Program to cease operations and return customers
to SDG&E. In addition, the Alliance will be responsible for ensuring that its resource mix contains sufficient
production from renewable energy resources needed to comply with the statewide RPS mandate {33
percent renewable energy by 2020, increasing to 60 percent by 2030). The resource plan will meet or
exceed all of the applicable regulatory requirements related to RA and the RPS.
In relation to its RPS procurement obligation, CEA is aware that SB 100 was signed into law by Governor
Brown on September 10, 2018, with an effective date of January 1, 2019. One of SB l0O's key
requirements is to increase California's RPS procurement mandate to 44 percent by December 31, 2024,
52 percent by December 31, 2027, and 60 percent by December 31, 2030. The Alliance is also aware of
applicable long-term renewable energy contracting requirements and plans to satisfy such requirements
with one or more eligible contracts put in place prior to or during early-stage operation of the CCA
Program. As a local governmental agency, the Alliance's resource planning and procurement activities
are subject to and overseen by its Board through an open and public process.
In relation to its small, local and diverse business enterprise procurement requirement, the Alliance is
aware that SB 255 was signed into law by Governor Newsom on October 2, 2019. SB 255 requires the CEA
Implementation Plan that to include the methods for ensuring procurement from small, local and diverse
business enterprises in all categories, including, but not limited to, renewable energy, energy storage
system, and smart grid projects. These methods are described in the Small, Local and Diverse Business
Enterprise Procurement section.
6.2 RESOURCE PLAN OVERVIEW
To meet the aforementioned objectives and satisfy the applicable regulatory requirements pertaining to
CEA's status as a California load serving entity, CEA's resource plan includes a diverse mix of power
purchases, renewable energy, and potentially, new energy efficiency programs, demand response, and
distributed generation. A diversified resource plan minimizes risk and volatility that can occur from over-
reliance on a single resource type or fuel source, and thus increases the likelihood of rate stability. The
planned power supply is initially comprised of power purchases from third party electric suppliers and, in
the longer-term, may include renewable generation assets owned and/or controlled by CEA.
Load Forecast & Resource Plan 20 Draft November 2019
Clean Energy Alliance Implementation Plan
Once the CEA Program demonstrates it can operate successfully, CEA may begin evaluating opportunities
for investment in renewable generating assets, subject to then-current market conditions, statutory
requirements and regulatory considerations. Any renewable generation owned by CEA or controlled
under a long-term power purchase agreement with a proven public power developer, could provide a
portion of CEA's electricity requirements on a cost-of-service basis. Depending upon market conditions
and, importantly, the applicability of tax incentives for renewable energy development, electricity
purchased under a cost-of-service arrangement can be more cost-effective than purchasing renewable
energy from third party developers, which will allow the CEA Program to pass on cost savings to its
customers through competitive generation rates. Any investment decisions in new renewable generating
assets will be made following appropriate environmental reviews and in consultation with qualified
financial and legal advisors.
As an alternative to direct investment, CEA may consider partnering with an experienced public power
developer and could enter into a long-term (15-to-30 year) power purchase agreement that would
support the development of new renewable generating capacity. Such an arrangement could be
structured to reduce the CEA Program's operational risk associated with capacity ownership while
providing its customers with all renewable energy generated by the facility under contract.
CEA's indicative resource plan for the years 2021 through 2030 is summarized in the following table. Note
that CEA's projections reflect a portfolio mix of renewable energy compliant with the annual RPS
requirement and all other supply coming in the form of conventional resources or CAISO system power\
Table 1: Proposed Resource Plan
Oean Energy Alliance
Proposed Resource Plan (MWh)
2021 • 2030
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Demand (MWh)
Retail 144,022 928,654 949,406 965,616 980,219 990,867 997,196 1,017,140 1,037,482 1,058,232
losses 6,193 39,932 40,824 41,521 42,149 42,607 42,879 43,737 44,612 45,504
Wholesale 150,215 968,586 990,230 1,007,137 1,022,368 1,033,474 1,040,075 1,060,877 1,082,094 1,103,736
Supply (MWh)
Renewable 72,011 464,327 474,703 482,808 490,109 495,433 518,542 556,036 594,823 634,939
System 78,204 504,259 515,527 524,329 532,259 538,041 521,533 504,840 487,271 468,797
Total Supply 150,215 968,586 990,230 1,007,137 1,022,368 1,033,474 1,040,075 1,060,877 1,082,094 1,103,736
6.3 SUPPLY REQUIREMENTS
The starting point for CEA's resource plan is a projection of participating customers and associated electric
consumption. Projected electric consumption is evaluated on an hourly basis and matched with resources
best suited to serving the aggregate of hourly demands or the program's "load profile." The electric sales
forecast and load profile will be affected by CEA's plan to introduce the CEA Program to customers in one
single phase and the degree to which customers choose to remain with SDG&E during the customer
4 The Alliance has applied known RPS procurement targets, as reflected in SB 100, for calendar years 2024, 2027 and 2030. In the
intervening years, the Alliance has assumed a general straight-line trajectory between each of the aforementioned years (which
are associated with the final years of Compliance Periods 4, 5 and 6 respectively).
Load Forecast & Resource Plan 21 Draft November 2019
Clean Energy Alliance Implementation Plan
enrollment and opt-out period. The Alliance's rollout plan and assumptions regarding customer
participation rates are discussed below.
6.4 CUSTOMER PARTICIPATION RATES
Customers will be automatically enrolled in the CEA Program unless they opt-out during the customer
notification process conducted during the 60-day period prior to enrollment and continuing through the
60-day period following commencement of service. The Alliance anticipates an overall customer
participation rate of approximately 90 percent of eligible SDG&E bundled service customers, based on
reported opt-out rates for already operating CCAs. It is assumed that customers taking direct access
service from a competitive electricity provider will continue to remain with their current supplier.
The participation rate is not expected to vary significantly among customer classes, in part because the
Alliance will offer two distinct rate tariffs that will address the needs of cost-sensitive customers as well
as the needs of both residential and business customers that prefer a highly renewable energy product.
The assumed participation rates will be refined as CEA's public outreach and market research efforts
continue to develop.
6.5 CUSTOMER FORECAST
Once customers enroll, they will be transferred to service by CEA on their regularly scheduled meter read
date over an approximately thirty-one-day period. Approximately 2,900 service accounts per day will be
transferred during the first month of service. The number of accounts anticipated to be served by CEA at
the end of the enrollment period is shown in Table 2.
Table 2: Total Customer Counts at the end of First Month of Operation, here presuming enrollment occurs in May 2021.
Residential
Commercial & Agriculture
Street Lighting & Traffic
May-21
49,800
8,000
200
The Alliance assumes that customer growth will generally offset customer attrition (opt-outs) over time,
resulting in a relatively stable customer base (<1% annual growth) over the noted planning horizon. While
the successful operating track record of California CCA programs continues to grow, there is a relatively
short history with regard to CCA operations, which makes it difficult to anticipate the actual levels of
customer participation within the CEA Program. The Alliance believes that its assumptions regarding the
offsetting effects of growth and attrition are reasonable in consideration of the historical customer growth
(based on SDG&E data) within the JPA and the potential for continuing customer opt-outs following
mandatory customer notification periods. The following table shows the forecast of service accounts
(customers) served by CEA for each of the next ten years.
Table 3: Customer Accounts by Year
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Residential 49,800 49,800 49,900 49,900 50,000 50,100 50,100 51,100 52,200 53,200
Commercial & Agriculture 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,200 8,400 8,500
Street Lighting & Traffic 200 200 200 200 200 200 200 200 200 200
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Clean Energy Alliance Implementation Plan
6.6 SALES FORECAST
The Alliance's forecast reflects the rollout and customer enrollment schedule shown above.
Annual energy requirements are shown in Table 4.
Table 4: Demand Forecast in MWh, 2021-2030
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Demand (MWh)
Retail 144,022 928,654 949,406 965,616 980,219 990,867 997,196 1,017,140 1,037,482 1,058,232
Losses 6,193 39,932 40,824 41,521 42,149 42,607 42,879 43,737 44,612 45,504
Wholesale 150,215 968,586 990,230 1,007,137 1,022,368 1,033,474 1,040,075 1,060,877 1,082,094 1,103,736
6. 7 CAPACllY REQUIREMENTS
The CPUC's RA standards applicable to the CEA Program require a demonstration one year in advance that
CEA has secured physical capacity for 90 percent of its projected peak loads for each of the five months
May through September, plus a minimum 15 percent reserve margin.
Additionally, the Alliance must demonstrate one year in advance that it has secured physical capacity for
100 percent of its local RA obligation across all months in the upcoming compliance year 2021 and the
following compliance year 2022 and SO percent across all months in 2023. On a month-ahead basis, CEA
must demonstrate 100 percent of the peak load plus a minimum 15 percent reserve margin. Per CPUC
Resolution E-4907, the Alliance must participate in the year-ahead RA compliance cycle in order to serve
customers in the following calendar year. The Alliance will follow the prescribed year-ahead RA
compliance timeline outlined within Appendix A of Resolution E-4907; this includes:
• Submission of year-ahead load forecast to the CEC and CPUC in April 2020;
• Submission of updated year-ahead load forecast to the CEC and CPUC in August 2020;
• Submission of year-ahead compliance materials in October 2020; and
• Submission of month-ahead load migration forecast by February 2021.
A portion of CEA's capacity requirements must be procured locally, from the San Diego -Imperial Valley
local capacity area as defined by the CAISO. The Alliance would be required to demonstrate its local
capacity requirement for each month of the following calendar year. The local capacity requirement is a
percentage of the total (SDG&E service area) local capacity requirements adopted by the CPUC based on
CEA's forecasted peak load. CEA must demonstrate compliance or request a waiver from the CPUC
requirement as provided for in cases where local capacity is not available.
CEA is also required to demonstrate that a specified portion of its capacity meets certain operational
flexibility requirements under the CPUC and CAISO's flexible RA framework.
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Clean Energy Alliance Implementation Plan
The estimated forward RA requirements for 2021 through 2023 are shown in the following tables5:
Table 5: Forward Capacity Requirements {Total) for 2021-2023 in MW, presuming service starts in May 2021
Month
January
February
March
April
May
June
July
August
September
October
November
December
139.9
165.6
176.0
168.8
172.7
164.5
155.3
172.1
2022 2023
182.8 186.1
171.2 174.2
151.2 153.8
144.1 152.4
143.7 140.5
170.1 172.9
188.0 191.2
167.0 169.8
177.4 180.5
168.9 171.7
159.5 162.2
176.7 186.9
CEA's plan ensures that sufficient reserves will be procured to meet its peak load at all times. The
projected CEA annual capacity requirements are shown in the following table:
Table 6: Annual Maximum Capacity Requirements 2021-2030
ml mz ~ ~ ~ mi ml ~ 2029 2030
Max Wholesale Demand 176.0 188.0 191.l 191.2 189.2 190.6 194.6 198.S 202.S 206.S
Reserve Requirement (1596) 26.4 18.1 28.7 28.7 28.4 28.6 29.2 29.8 30.4 31.0
Total Capacity Requirement 202.4 216.2 219.8 219.9 217.S 219.2 223.8 228.3 232.9 237.S
Local capacity requirements are a function of the SDG&E area RA requirements and CEA's projected peak
demand. CEA will need to work with the CPUC's Energy Division and staff at the California Energy
Commis~ion to obtain the data necessary to calculate its monthly local capacity requirement. A
preliminary estimate of CEA's annual maximum local capacity requirement for the ten-year planning
period ranges between 132-155 MW as shown in Table 7.
Max Wholesale Demand
Local Capacity ('6 of Total)
San D;ego -IV (MW)
Table 7: Annual Maximum Local Capacity Requirements 2021-2030
2021
176.0
75%
132.0
mz
188.0
75%
141.0
~
191.2
75%
143.4
~
191.2
75%
143.4
189.2
75%
141.9
190.6
75%
142.9
l,!!ll
194.6
75%
146.0
198.S
75%
148.9
202.S
7S%
1S1.9
206.S
75%
154.9
The CPUC assigns local capacity requirements during the year prior to the compliance period; thereafter,
the CPUC provides local capacity requirement true-ups for the second half of each compliance year.
CEA will coordinate with SDG&E and appropriate state agencies to manage the transition of responsibility
for RA from SDG&E to CEA during CCA program phase-in. For system RA requirements, CEA will make
month-ahead showings for each month that CEA plans to serve load, and load migration issues would be
addressed through the CPUC's approved procedures. CEA will work with the California Energy
5 The figures shown in the tables are estimates. CEA's RA requirements will be subject to modification due to application of
certain coincidence adjustments and resource allocations relating to utility demand response and energy efficiency programs, as
well as generation capacity allocated through the Cost Allocation Mechanism. These adjustments are addressed through the
CPUC's RA compliance process.
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Clean Energy Alliance Implementation Plan
Commission and CPUC prior to commencing service to customers to ensure it meets its local and system
RA obligations through its agreement(s) with its chosen electric supplier(s).
6.8 RENEWABLES PORTFOLIO STANDARDS ENERGY REQUIREMENTS
6.8.1 Basic RPS Requirements
CEA will be required by statute and CPUC regulations to procure a certain minimum percentage of its retail
electricity sales from qualified renewable energy resources. For purposes of determining CEA's renewable
energy requirements, many of the same standards for RPS compliance that are applicable to the
distribution utilities will apply to CEA.
California's RPS program is currently undergoing reform. On October 7, 2015, Governor Brown signed
Senate Bill 350 ("SB 350"; De Leon and Leno), the Clean Energy and Pollution Reduction Act of 2015, which
increased California's RPS procurement target from 33 percent by 2020 to 50 percent by 2030 amongst
other clean-energy initiatives. The RPS program was further amended on September 10, 2018 when
Governor Brown signed SB 100, increasing California's RPS procurement target to 60 percent by 2030
amongst other clean-energy initiatives. Many details related to SB 100 implementation will be developed
over time with oversight by designated regulatory agencies. However, it is reasonable to assume that
interim annual renewable energy procurement targets will be imposed on CCAs and other retail electricity
sellers to facilitate progress towards the 60 percent procurement mandate. For planning purposes, CEA
has assumed straight-line annual increases (1.7 percent per year) to the RPS procurement target
beginning in 2021, as the state advances on the 60 percent RPS in 2030. CEA will also adopt an integrated
resource plan in compliance with SB 350. Furthermore, the Alliance will ensure that all long-term
renewable energy contracting requirements, as imposed by SB 350, will be satisfied through appropriate
transactions with qualified suppliers and will also reflect this intent in ongoing resource planning and
procurement efforts.
6.8.2 CEA's Renewables Portfolio Standards Requirement
CEA's annual RPS procurement requirements, as specified under California's RPS program, are shown in
Table 8.
Table 8: Renewable Procurement Obligation and Target Percentages and Volumes 2021-2030
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Retail Load (MWh) 144,022 928,654 949,406 965,616 980,219 990,867 997,196 1,017,140 1,037,482 1,058,232
RPS% Target 36% 39% 41% 44% 47% 49% 52% 55% 57% 60%
RPS Obligation (MWh) 51,560 357,532 392,105 424,871 457,762 488,497 518,542 556,036 594,823 634,939
CEA% Target 50% 50% 50% 50% 50% 50% 52% 55% 57% 60%
CEA Target (MWh) 72,011 464,327 474,703 482,808 490,109 495,433 518,542 556,036 594,823 634,939
6.9 PURCHASED POWER
Power purchased from power marketers, public agencies, generators, and/or utilities will be a significant
source of supply during the first several years of CEA Program operation. CEA will initially contract to
obtain all of its electricity from one or more third party electric providers under one or more power supply
agreements, and the supplier(s) will be responsible for procuring the specified resource mix, including
CEA's desired quantities of renewable energy, to provide a stable and cost-effective resource portfolio for
the CEA Program.
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Clean Energy Alliance Implementation Plan
6.10 RENEWABLE RESOURCES
CEA will initially secure necessary renewable power supply from its third-party electric supplier(s). CEA
may supplement the renewable energy provided under the initial power supply contract(s) with direct
purchases of renewable energy from renewable energy facilities or from renewable generation developed
and owned by CEA. At this point in time, it is not possible to predict what projects might be proposed in
response to future renewable energy solicitations administered by CEA, unsolicited proposals or
discussions with other agencies. Renewable projects that are located virtually anywhere in the Western
Interconnection can be considered as long as the electricity is deliverable to the CAISO control area, as
required to meet the Commission's RPS rules and any additional guidelines ultimately adopted by the
Alliance. The costs of transmission access and the risk of transmission congestion costs would need to be
considered in the bid evaluation process if the delivery point is outside of CEA's load zone, as defined by
the CAISO.
6.11 SMALL, LOCAL AND DIVERSE BUSINESS ENTERPRISE PROCUREMENT
CEA's procurement processes will be developed to ensure compliance with SB 255 regarding procurement
from small, local and diverse business enterprises as applicable. These methods may include, but are not
limited to, providing preferences to small, local and diverse business enterprises as permitted by law,
developing specifications that encourage responses by small, local and diverse business enterprises,
conducting outreach to these enterprises and other methods as may be directed by the CEA Board. CEA
will request from contractors and information related to the hiring of small, local and diverse business
enterprises that will be reported to commission.
6.12 ENERGY EFFICIENCY
CEA does not currently anticipate running locally managed energy efficiency programs. In the future, CEA
may apply to become EE program administrators. In the meantime, CEA will support already existing
energy efficiency efforts within its service territory.
Load Forecast & Resource Plan 26 Draft November 2019
Clean Energy Alliance Implementation Plan
7 FINANCIAL PLAN
This Chapter examines the monthly cash flows expected during the startup and customer phase-in period
of the CEA Program and identifies the anticipated financing requirements. It includes estimates of
program startup costs, including necessary expenses and capital outlays. It also describes the
requirements for working capital and long-term financing for the potential investment in renewable
generation, consistent with the resource plan contained in Chapter 6.
7.1 DESCRIPTION OF CAsH FLOW ANALYSIS
The Alliance's cash flow analysis estimates the level of capital that will be required during the startup and
phase-in period. The analysis focuses on the CEA Program's monthly costs and revenues and the lags
between when costs are incurred and revenues received.
7.2 COST OF PROGRAM OPERATIONS
The first category of the cash flow analysis is the Cost of CCA Program Operations. To estimate the overall
costs associated with CCA Program Operations, the following components were taken into consideration:
► Electricity Procurement;
► Ancillary Service Requirements;
► Exit Fees;
► Staffing and Professional Services;
► Data Management Costs;
► Administrative Overhead;
► Billing Costs;
► Scheduling Coordination;
► Grid Management and other CAISO Charges;
► CCA Bond and Security Deposit; and,
► Pre-Startup Cost Reimbursement.
7.3 REVENUES FROM CCA PROGRAM OPERATIONS
The cash flow analysis also provides estimates for revenues generated from CCA operations or from
electricity sales to customers. In determining the level of revenues, the analysis assumes the customer
phase-in schedule described herein, and assumes that CEA charges a standard, default electricity tariff
similar to the generation rates of SDG&E for each customer class and an optional renewable energy tariff
(with a renewable energy content that exceeds the CEA default retail option) at a premium reflective of
incremental renewable power costs. More detail on CEA Program rates can be found in Chapter 8.
Financial Plan 27 Draft November 2019
Clean Energy Alliance Implementation Plan
7.4 CAsH FLOW ANALYSIS RESULTS
The results of the cash flow analysis provide an estimate of the level of capital required for the Alliance to
move through the CCA startup and phase-in periods. This estimated level of capital is determined by
examining the monthly cumulative net cash flows (revenues from CCA operations minus cost of CCA
operations) based on assumptions for payment of costs or other cash requirements (e.g., deposits) by
CEA, along with estimates for when customer payments will be received. This identifies, on a monthly
basis, what level of cash flow is available in terms of a surplus or deficit.
The cash flow analysis identifies funding requirements in recognition of the potential lag between
revenues received and payments made during the phase-in period. The estimated financing requirements
for the startup and phase-in period, including working capital needs associated with the customer
enrollments, is determined to be $4.4M. Of the $4.4M in capital requirements, $1.4 is related to the
implementation/startup efforts, to be incurred during fiscal years 19/20 and 20/21, (i.e., rate setting,
power procurement and contract negotiations, marketing and communications, regulatory compliance,
CPUC bond, SDG&E security deposit, etc.) in order to serve customers by May 2021. A deposit in the
amount of $500,000 will also need to be posted to CAISO for the Alliance to be a Congestion Revenue
Rights Holder. The other $2,500,000 is the "float" required for CEA to pay its monthly bills before the
program generates enough internal cash to self-fund its working capital needs. Working capital
requirements peak soon after enrollment of all CEA customers.
7.5 PROGRAM IMPLEMENTATION PROFORMA
In addition to developing a cash flow analysis that estimates the level of working capital required to move
CEA through full CCA phase-in, a summary proforma analysis that evaluates the financial performance of
the CCA program during the phase-in period is shown in Table 9. The difference between the cash flow
analysis and the CCA pro forma analysis is that the proforma analysis does not include a lag associated
with payment streams. In essence, costs and revenues are reflected in the month in which service is
provided. All other items, such as costs associated with CCA Program operations and rates charged to
customers remain the same. Cash provided by financing activities are not shown in the proforma analysis,
although payments for loan repayments are included as a cost item.
The results of the pro forma analysis are shown in Table 9. In particular, the summary of CCA program
startup and phase-in addresses projected CEA Program operations for the period beginning May 2021
through June 2030. The Alliance has also included a summary of Program reserves, which are expected to
accrue over this same period.
Table 9: Pro Forma including Reserves Accumulation 2021-2030
Table 9: Pro Forma Including Reserves Accumulation 2021-2030
Revenues from Operations (S}
Electric Sales Revenues
Uncollected Accounts
Total Revenues
Cost of Operations (S)
Staffing & Consulting
Wholesale Services
Data Management Services
IOU Fees
Energy Procurement
Total Operations
Net Program Revenues
Cumulative Reserves
Financial Plan
ml ~ 2023
S 11,461,369 S 71,583,581 $ 73,964,197 $ 76,857,180 $ 79,688,575 $ 83,285,097 $ 88,240,950 $ 90,005,769 $ 91,805,885 $ 93,642,002
S (34,384) $ (214,751) $ (221,893) $ (230,572) $ (239,066) $ (249,855) $ (264,723) $ (270,017) $ (275,418) $ (280,926)
$ 11,426,985 $ 71,368,830 $ 73,742,304 $ 76,626,609 $ 79,449,510 S 83,035,242 $ 87,976,228 $ 89,735,752 $ 91,530,467 $ 93,361,076
s 421,013 2,570,281 s 2,647,390 s 2,726,811 2,808,616 s 2,892,874 s 2,979,660 s 3,039,254 s 3,100,039 s 3.162,040 s 152,250 929,318 $ 957,197 s 985,913 1,015,490 s 1,045,955 s 1,077,334 s 1,098,880 s 1,120,858 s 1,143,275 s 146,492 879,504 s 880,609 s 881,725 882,853 s 883,992 s 885,142 s 902,845 s 920,902 s 939,320
$ 33,662 203,090 s 205,339 s 207,615 209,919 s 212,252 s 214,613 s 218,906 s 223,284 s 227,749 s 5,866,343 S 54,089,555 $ 59,546,313 S 61,419,452 $ 62,917,913 S 64,521,128 S 66,312,081 s 67,638,323 s 68,991,089 s 70,370,911 s 6,619,760 $ 58,671,747 S 64,236,847 $ 66,221,516 $ 67,834,791 $ 69,556,202 $ 71,468,831 s 72,898,208 s 74,356,172 s 75,843,295 s 4,807,225 $ 12,697,083 s 9,505,457 S 10,405,092 $ 11,614,718 $ 13,479,041 $ 16,507,397 s 16,837,545 s 17,174,295 s 17,517,781 s 4,807,225 $ 17,504,308 S 27,009,765 $ 37,414,858 S 49,029,576 $ 62,508,617 S 79,016,013 s 95,853,558 $ 113,027,853 S 130,545,635
28 Draft November 2019
Clean Energy Alliance Implementation Plan
The surpluses achieved during the phase-in period serve to build CEA's net financial position and credit
profile and to provide operating reserves for CEA in the event that operating costs (such as power
purchase costs) exceed collected revenues for short periods of time.
7.6 CLEAN ENERGY ALLIANCE FINANCINGS
It is anticipated that CEA will need financing for its start-up activities. CEA plans to seek financing through
its service providers that will amortize their start-up costs over the subsequent months following when
revenues begin flowing, through a loan or line of credit from a financial institution and through in-kind
services and advances from its Member Agencies that will be repaid in the future. Subsequent capital
requirements will be self-funded from accrued CEA financial reserves.
7. 7 RENEWABLE RESOURCE PROJECT FINANCING
CEA may consider project financings for renewable resources, likely local wind and solar projects. These
financings would only occur after a sustained period of successful CEA Program operation and after
appropriate project opportunities are identified and subjected to appropriate environmental review.
In the event that such financing occurs, funds would include any short-term financing for the renewable
resource project development costs and would likely extend over a 20 to 30-year term. The security for
such bonds would be the revenue from sales to the retail customers of CEA.
Financial Plan 29 Draft November 2019
Clean Energy Alliance Implementation Plan
8 RATE SITTING, PROGRAM TERMS AND CONDITIONS
8.1 INTRODUCTION
This Chapter describes the initial policies proposed for CEA in setting its rates for electric aggregation
services. These include policies regarding rate design, rate objectives, and provision for due process in
setting Program rates. Program rates are ultimately approved by the CEA Board. The Alliance would
retain authority to modify program policies from time to time at its discretion.
8.2 RATE POLICIES
The Alliance will establish rates sufficient to recover all costs related to operation of the CEA Program,
including any reserves that may be required as a condition of financing and other discretionary reserve
funds that may be approved by CEA. As a general policy, rates will be uniform for all similarly situated
customers enrolled in the CEA Program throughout the JPA service territory.
The primary objectives of the rate setting plan are to set rates that achieve the following:
► Rate competitive tariff option (default service offering), including a proportionate quantity of
renewable energy in excess of California's prevailing renewable energy procurement mandate;
► Voluntary renewable energy supply option (renewable content greater than the CEA default retail
service offering);
► Rate stability;
► Equity among customers in each tariff;
► Customer understanding; and
► Revenue sufficiency.
Each of these objectives is described below.
8.3 RATE COMPETITIVENESS
The primary goal is to offer competitive rates for electric services that CEA would provide to participating
customers. For participants in the CEA default energy product, the goal would be for CEA Program target
generation rates to be initially at least two percent below, subject to actual energy product pricing and
decisions of the Board, similar generation rates offered by SDG&E. For participants in the CEA's Program's
voluntary 100% renewable energy product, the goal would be to offer the lowest possible customer rates
with an incremental monthly cost premium reflective of the actual cost of additional renewable energy
supply required to serve such customers.
Competitive rates will be critical to attracting and retaining key customers. In order for CEA to be
successful, the combination of price and value must be perceived as superior when compared to the
bundled SDG&E alternative. As planned, the value provided by the CEA Program will include a local
community focus, investment and control.
Rate Setting, Program Terms and Conditions 30 Draft November 2019
Clean Energy Alliance Implementation Plan
As previously discussed, the CEA Program will increase renewable energy supply to program customers
by offering two distinct energy products. The default product for CEA Program customers will increase
renewable energy supply to a minimum 50%, while maintaining generation rates that are targeted to
provide a minimum two percent discount from comparable SDG&E rates. The initial renewable energy
content provided under CEA's default product will exceed California's prevailing renewable energy
procurement mandate during the initial years of operation, increasing to 60% by 2030. CEA will also offer
its customers a voluntary 100% renewable energy tariff at rates that reflect CEA's cost for procuring
related energy supplies.
Participating qualified low-or fixed-income households, such as those currently enrolled in the California
Alternate Rates for Energy ("CARE") program, will be automatically enrolled in the default energy product
and will continue to receive related discounts on monthly electricity bills through SDG&E.
8.4 RATE STABILllY
CEA will offer stable rates by hedging its supply costs over multiple time horizons and by including
renewable energy supplies that exhibit stable costs. Rate stability considerations may prevent CEA
Program rates from directly tracking similar rates offered by the distribution utility, SDG&E, and may result
in differences from the general rate-related targets initially established for the CEA Program. The Alliance
plans to offer the most competitive rates possible after all Program operating costs are recovered and
reserve targets are achieved.
8.5 EQUllY AMONG CUSTOMER CLASSES
Initial rates of the CEA Program will be set based on cost-of-service considerations with reference to the
rates customers would otherwise pay to SDG&E. Rate differences among customer classes will reflect the
rates charged by the local distribution utility as well as differences in the costs of providing service to each
class. Rate benefits may also vary among customers within the major customer class categories,
depending upon the specific rate designs adopted by the Alliance.
8.6 CUSTOMER UNDERSTANDING
The goal of customer understanding involves rate designs that are relatively straightforward so that
customers can readily understand how their bills are calculated. This not only minimizes customer
confusion and dissatisfaction but will also result in fewer billing inquiries to the CEA Program's customer
service call center. Customer understanding also requires rate structures to reflect rational rate design
principles (i.e., there should not be differences in rates that are not justified by costs or by other policies
such as providing incentives for conservation).
8.7 REVENUE SUFFICIENCY
CEA Program rates must collect sufficient revenue from participating customers to fully fund the annual
CEA operating budget. Rates will be set to collect the adopted budget based on a forecast of electric sales
for the budget year. Rates will be adjusted as necessary to maintain the ability to fully recover all costs of
the CEA Program, subject to the disclosure and due process policies described later in this chapter. To
ensure rate stability, funds available in CEA's rate stabilization reserve may be used from time to time to
augment operating revenues.
Rate Setting, Program Terms and Conditions 31 Draft November 2019
Clean Energy Alliance Implementation Plan
8.8 RATE DESIGN
CEA will generally match the rate structures from SDG&E's standard rates to avoid the possibility that
customers would see significantly different bill impacts as a result of changes in rate structures that would
take effect following enrollment in the CEA Program.
8.9 NET ENERGY METERING
As planned, customers with on-site generation eligible for net metering from SDG&E will be offered a net
energy metering rate from CEA. Net energy metering allows for customers with certain qualified solar or
wind distributed generation to be billed on the basis of their net energy consumption. CEA's net energy
metering tariff will apply to the generation component of the bill, and the SDG&E net energy metering
tariff will apply to the utility's portion of the bill. CEA plans to pay customers for excess power produced
from net energy metered generation systems in accordance with the rate designs adopted by the JPA.
The goal is to offer a higher payout for surplus generation than SDG&E. In order to minimize the impact
of mid-relevant period true-ups, NEM customers may be enrolled over multiple phases.
8.10 DISCLOSURE AND DUE PROCESS IN SETTING RATES AND ALLOCATING COSTS AMONG
PARTICIPANTS
Initial program rates will be adopted by the CEA Board following the establishment of the first year's
operating budget prior to initiating the customer notification process. Subsequently, CEA will prepare an
annual budget and corresponding customer rates. Following the commencement of service, any
proposed rate adjustment will be made to the Board and affected customers will be given the opportunity
to provide comment on the proposed rate changes.
After proposing a rate adjustment, CEA will furnish affected customers with a notice of its intent to adjust
rates, either by mailing such notices postage prepaid to affected customers, by including such notices as
an insert to the regular bill for charges transmitted to affected customers, by including a related message
directly on the customer's monthly electricity bill (on the page addressing CEA charges) or by following
CEA's public hearing noticing procedures adopted by the Board. The notice will provide a summary of the
proposed rate adjustment and will include a link to the CEA Program website where information will be
posted regarding the amount of the proposed adjustment, a brief statement of the reasons for the
adjustment, and the mailing address of the CEA Program to which any customer inquiries relative to the
proposed adjustment, including a request by the customer to receive notice of the date, time, and place
of any hearing on the proposed adjustment, may be directed.
Rate Setting, Program Terms and Conditions 32 Draft November 2019
Clean Energy Alliance Implementation Plan
9 CUSTOMER RIGHTS AND RESPONSIBILITIES
This Chapter discusses customer rights, including the right to opt-out of the CEA Program and the right to
privacy of customer usage information, as well as obligations customers undertake upon agreement to
enroll in the CCA Program. All customers that do not opt out within 30 days of the fourth enrollment
notice will have agreed to become full status program participants and must adhere to the obligations set
forth below, as may be modified and expanded by the Board from time to time.
By adopting this Implementation Plan, the Alliance will have approved the customer rights and
responsibilities policies contained herein to be effective at Program initiation. The Alliance retains
authority to modify program policies from time to time at its discretion.
9.1 CUSTOMER NOTICES
At the initiation of the customer enrollment process, four notices will be provided to customers describing
the Program, informing them of their opt-out rights to remain with utility bundled generation service, and
containing a simple mechanism for exercising their opt-out rights. The first notice will be mailed to
customers approximately sixty days prior to the date of automatic enrollment. A second notice will be
sent approximately thirty days later. The Alliance will likely use its own mailing service for requisite
enrollment notices rather than including the notices in SDG&E's monthly bills. This is intended to increase
the likelihood that customers will read the enrollment notices, which may otherwise be ignored if included
as a bill insert. Customers may opt out by notifying CEA using the CEA Program's designated telephone-
based or Internet opt-out processing service. Should customers choose to initiate an opt-out request by
contacting SDG&E, they would be transferred to the CEA Program's call center to complete the opt-out
request. Consistent with CPUC regulations, notices returned as undelivered mail would be treated as a
failure to opt out, and the customer would be automatically enrolled.
Following automatic enrollment, at least two notices will be mailed to customers within the first two
billing cycles (approximately sixty days) after CEA service commences. Opt-out requests made on or
before the sixtieth day following start of CEA Program service will result in customer transfer to bundled
utility service with no penalty. Such customers will be obligated to pay charges associated with the electric
services provided by CEA during the time the customer took service from the CEA Program, but will
otherwise not be subject to any penalty or transfer fee from CEA.
Customers who establish new electric service accounts within the Program's service area will be
automatically enrolled in the CEA Program and will have sixty days from the start of service to opt out if
they so desire. Such customers will be provided with two enrollment notices within this sixty-day post-
enrollment period. Such customers will also receive a notice detailing CEA's privacy policy regarding
customer usage information. CEA will have the authority to implement entry fees for customers that
initially opt out of the Program, but later decide to participate. Entry fees, if deemed necessary, would
aid in resource planning by providing additional control over the CEA Program's customer base.
Customer Rights and Responsibilities 33 Draft November 2019
Clean Energy Alliance Implementation Plan
9.2 TERMINATION FEE
Customers that are automatically enrolled in the CEA Program can elect to transfer back to the incumbent
utility without penalty within the first two months of service. After this free opt-out period, customers
will be allowed to terminate their participation but may be subject to payment of a Termination Fee,
which CEA reserves the right to impose, if deemed necessary. Customers that relocate within CEA's
service territory would have CEA service continued at their new address. If a customer relocating to an
address within CEA's service territory elected to cancel CCA service, the Termination Fee could be applied.
Program customers that move out of CEA's service territory would not be subject to the Termination Fee.
If deemed applicable by CEA, SDG&E would collect the Termination Fee from returning customers as part
of CEA's final bill to the customer.
If adopted, the Termination Fee would be clearly disclosed in the four enrollment notices sent to
customers during the sixty-day period before automatic enrollment and following commencement of
service. The fee could also be adopted or changed by the CEA Board subject to applicable customer
noticing requirements. Other CCAs have adopted small or zero-dollar termination fees, and CEA would
likely do the same initially.
Customers electing to terminate service after the initial notification period would be transferred to SDG&E
on their next regularly scheduled meter read date if the termination notice is received a minimum of
fifteen days prior to that date. Such customers would also be liable for the reentry fees imposed by SDG&E
and would be subject to SDG&E's current terms and conditions, including being required to remain on
bundled utility service for a period of one year, as described in the utility CCA tariffs.
9.3 CUSTOMER CONFIDENTIALITY
CEA will establish policies covering confidentiality of customer data that are fully compliant with the
required privacy protection rules for CCA customer energy usage information, as detailed within Decision
12-08-045. CEA will maintain the confidentiality of individual customers' names, service addresses, billing
addresses, telephone numbers, account numbers, and electricity consumption, except where reasonably
necessary to conduct business of the CEA Program or to provide services to customers, including but not
limited to where such disclosure is necessary to (a) comply with the law or regulations; (b) enable CEA to
provide service to its customers; (c) collect unpaid bills; (d) obtain and provide credit reporting
information; or (e) resolve customer disputes or inquiries. CEA will not disclose customer information for
telemarketing, e-mail, or direct mail solicitation. Aggregate data may be released at CEA's discretion.
9.4 RESPONSIBILITY FOR PAYMENT
Customers will be obligated to pay CEA Program charges for service provided through the date of transfer
including any applicable Termination Fees. Pursuant to current CPUC regulations, CEA will not be able to
direct that electricity service be shut off for failure to pay CEA bills. However, SDG&E has the right to shut
off electricity to customers for failure to pay electricity bills, and SDG&E Electric Rule 23 mandates that
partial payments are to be allocated pro rata between SDG&E and the CCA. In most circumstances,
customers would be returned to utility service for failure to pay bills in full and customer deposits (if any)
would be withheld in the case of unpaid bills. SDG&E would attempt to collect any outstanding balance
from customers in accordance with Rule 23 and the related CCA Service Agreement. The proposed
process is for two late payment notices to be provided to the customer within 30 days of the original bill
Customer Rights and Responsibilities 34 Draft November 2019
Clean Energy Alliance Implementation Plan
due date. If payment is not received within 45 days from the original due date, service would be
transferred to the utility on the next regular meter read date, unless alternative payment arrangements
have been made. Consistent with the CCA tariffs, Rule 23, service cannot be discontinued to a residential
customer for a disputed amount if that customer has filed a complaint with the CPUC, and that customer
has paid the disputed amount into an escrow account.
9.5 CUSTOMER DEPOSITS
Under certain circumstances, CEA customers may be required to post a deposit equal to the estimated
charges for two months of CCA service prior to obtaining service from the CEA Program. A deposit would
be required for an applicant who previously had been a customer of SDG&E or CEA and whose electric
service has been discontinued by SDG&E or CEA during the last twelve months of that prior service
arrangement as a result of bill nonpayment. Such customers may be required to reestablish credit by
depositing the prescribed amount. Additionally, a customer who fails to pay bills before they become
past due as defined in SDG&E Electric Rule 11 (Discontinuance and Restoration of Service), and who
further fails to pay such bills within five days after presentation of a discontinuance of service notice for
nonpayment of bills, may be required to pay said bills and reestablish credit by depositing the prescribed
amount. This rule will apply regardless of whether or not service has been discontinued for such
nonpayment6• Failure to post deposit as required would cause the account service transfer request to be
rejected, and the account would remain with SDG&E.
6 A customer whose service is discontinued by Clean Energy Alliance is returned to SDG&E generation service.
Customer Rights and Responsibilities 35 Draft November 2019
Clean Energy Alliance Implementation Plan
10 PROCUREMENT PROCESS
10.1 INTRODUCTION
This Chapter describes CEA's initial procurement policies and the key third party service agreements by
which the Alliance will obtain operational services for the CEA Program. By adopting this Implementation
Plan, the Alliance will have approved the general procurement policies contained herein to be effective
at Program initiation. CEA retains authority to modify Program policies from time to time at its discretion.
10.2 PROCUREMENT METHODS
CEA will enter into agreements for a variety of services needed to support program development,
operation and management. It is anticipated that CEA will generally utilize competitive procurement
methods for services but may also utilize direct procurement or sole source procurement, depending on
the nature of the services to be procured. Direct procurement is the purchase of goods or services without
competition when multiple sources of supply are available. Sole source procurement is generally to be
performed only in the case of emergency or when a competitive process would be an idle act.
CEA will utilize a competitive solicitation process to enter into agreements with entities providing
electrical services for the program. Agreements with entities that provide professional legal or consulting
services, and agreements pertaining to unique or time sensitive opportunities, may be entered into on a
direct procurement or sole source basis at CEA's discretion. Authority for terminating agreements will
generally mirror the authority for entering into such agreements.
10.3 KEY CONTRACTS
10.3.1 Electric Supply
CEA will procure initial energy supply, as well as Scheduling Coordinator Services, through competitive
solicitation in the over-the-counter electricity markets. Suppliers will be selected to hedge CEA's financial
risk, meet its capacity obligations and achieve its environmental objectives. CEA will administer Request
for Proposal processes for energy supply. Procurement will commence once this implementation plan has
been approved and the CEA Board has made the final determination to proceed to going live with the
CCA.
Procurement will be an ongoing process in order to achieve desired levels of risk mitigation by dollar-cost-
averaging supply costs. In addition, particular strategies will be employed to mitigate the risk of changes
to the PCIA impacting CEA's rate competitiveness. Specifically, this entails procuring a certain amount of
supply annually during the month of October when the PCIA market price benchmark is set for the coming
year.
CEA's wholesale services provider will also serve as the Scheduling Coordinator for scheduling loads,
resources and Inter-SC trades into the CAISO market. In addition, the provider will be responsible for
ensuring CEA's compliance with all applicable RA and regulatory requirements imposed by the CPUC or
FERC.
Procurement Process 36 Draft November 2019
Clean Energy Alliance Implementation Plan
10.3.2 Data Management Contract
A data manager will provide the retail customer services of billing and other customer account services
(electronic data interchange or EDI with SDG&E, billing, remittance processing, and account
management). The data management contract will be awarded to an experienced data management
services provider.
The data manager is responsible for the following services:
► Data exchange with SDG&E;
► Technical testing;
► Customer information system;
► Customer call center;
► Billing administration/retail settlements;
► Settlement quality meter data reporting; and
► Reporting and audits of utility billing.
Utilizing a third party for account services eliminates a significant expense associated with implementing
a customer information system. Such systems can impose significant information technology costs and
take significant time to deploy. Separation of the data management contract from the energy supply
contract provides the JPA with greater flexibility to change energy suppliers, if desired, without facing an
expensive data migration issue.
11 CONTINGENCY PLAN FOR PROGRAM TERMINATION
11.1 INTRODUCTION
This Chapter describes the process to be followed in the case of CEA Program termination. By adopting
the original Implementation Plan, the Alliance will have approved the general termination process
contained herein to be effective at Program initiation. In the unexpected event that the JPA would
terminate the CEA Program and return its customers to SDG&E service, the proposed process is designed
to minimize the impacts on its customers and on SDG&E. The proposed termination plan follows the
requirements set forth in SDG&E's tariff Rule 27 governing service to CCAs. The JPA retains authority to
modify program policies from time to time at its discretion.
11.2 TERMINATION BY CLEAN ENERGY ALLIANCE
CEA will offer services for the long term with no planned Program termination date. In the unanticipated
event that the JPA decides to terminate the Program, the Board would vote on Program termination.
After any applicable restrictions on such termination have been satisfied, notice would be provided to
customers six months in advance that they will be transferred back to SDG&E. A second notice would be
provided during the final sixty-days in advance of the transfer. The notice would describe the applicable
Contingency Plan for Program Termination 37 Draft November 2019
Clean Energy Alliance Implementation Plan
distribution utility bundled service requirements for returning customers then in effect, such as any
transitional or bundled portfolio service rules.
At least one-year advance notice would be provided to SDG&E and the CPUC before transferring
customers, and CEA would coordinate the customer transfer process to minimize impacts on customers
and ensure no disruption in service. Once the customer notice period is complete, customers would be
transferred en masse on the date of their regularly scheduled meter read date.
CEA will post a bond or maintain funds held in reserve to pay for potential transaction fees charged to the
Program for switching customers back to distribution utility service. Reserves would be maintained
against the fees imposed for processing customer transfers (CCA Service Requests). The Public Utilities
Code requires demonstration of insurance or posting of a bond sufficient to cover reentry fees imposed
on customers that are involuntarily returned to distribution utility service under certain circumstances.
The cost of reentry fees is the responsibility of the energy services provider or the community choice
aggregator, except in the case of a customer returned for default or because its contract has expired. CEA
will post financial security in the appropriate amount as part of its registration materials and will maintain
the financial security in the required amount, as necessary.
Contingency Plan for Program Termination 38 Draft November 2019
Clean Energy Alliance Implementation Plan
12 APPENDIX A: CLEAN ENERGY ALLIANCE RESOLUTION No. 2019-###
(ADOPTING IMPLEMENTATION PLAN)
Appendix A: Clean Energy Alliance Resolution No. 2019-### (Adopting Implementation Plan) 39
Draft November 2019
Clean Energy Alliance
l ~ u ~.I :
Draft Community Choice Aggregation Implementation Plan Overview
November 19, 2019
Community Choice Aggregation
• Assembly Bill 117 -Approved 2002
• Authorizes cities, counties and JPAs to establish Community Choice
Aggregation (CCA) programs
• Public Utilities Code Section 366.2
• Establishes process for establishing CCA
• Requirement for implementation plan
• Establishes CCA as an "Opt-Out" program
11/19/2019
1
Implementation Plan
• Must include:
• Organizational structure of CCA, its operations & funding;
• Ratesetting and other costs to participants;
• Disclosure and due process in setting rates and allocating costs
among participants;
• Methods for entering and terminating agreements with other
entities;
• Rights & responsibilities of program participants;
• Termination of the program
• Description of third parties supplying electricity.
Statement of Intent
• CCA must provide:
• Universal access;
• Reliability;
• Equitable treatment of all classes of customers;
• Any requirements established by state law or by the California
Public Utilities Commission (CPUC) including rules for the
application of greenhouse gas emission performance standard.
11/19/2019
2
Clean Energy Alliance (CEA) Draft
Implementation Plan & Statement of Intent
• Meets requirements of Public Utilities Code;
• Modeled after implementation plans successfully certified by
CPUC;
• Must be filed by January 1, 2020 to serve customers in 2021;
• CPUC has 90 days to review and certify.
Implementation Plan Assumptions
• Carlsbad, Del Mar, Solana Beach
• Solana Energy Alliance customers will transition to CEA
• Target May 2021 launch
• Optimal cash flows for new CCA
• Flexibility exists to adjust date if circumstances warrant
• CEA to work with San Diego Gas & Electric
• Customers enrolled in single phase
• Net Energy Metering customers may be enrolled over multiple periods
• Minimize impact of enrollment to customers
• Assumed opt out rate of 10%
11/19/2019
3
Implementation Plan Assumptions (cont.)
• Energy Supply:
• Default 50% Renewables
• Voluntary 100% Renewables Opt-Up
• Meet state requirements renewable portfolio standards (RPS) &
greenhouse gas emissions
• Rate:
• Target 2% discount
• Consistent with CEA's Joint Powers Agreement
• Confirmed by CEA Board 11/5/19
• Supports Climate Action Plan goals of Member Agencies
Clean Energy Alliance Customers
Non-Residential
14%
Residential -49,800
Non-Residential -8,200
Residential
86%
11/19/2019
4
11/19/2019
■..-.;
FY 2021
Next Steps
• Adopt Implementation Plan -12/19/19
• File with CPUC by 12/31/19
• Complete CCA Registration Process within 90 days
• Prepare, approve & file draft Customer Notice
• Prepare, approve & file RPS Procurement Plan
• Execute CCA Service Agreement with SDG&E
• Submit CCA bond ($147,000) with CCA Service Agreement with CPUC
5
11/19/201$
6