HomeMy WebLinkAbout2020-06-18; Clean Energy Alliance JPA; ; Clean Energy Alliance Resource Adequacy ProcurementClean Energy Alliance
JOINT POWERS AUTHORITY
Staff Report
DATE: June 18, 2020
TO: Clean Energy Alliance Board of Directors
FROM: Barbara Boswell, Interim Chief Executive Officer
ITEM 9: Clean Energy Alliance Resource Adequacy Procurement
RECOMMENDATION:
Authorize Interim Chief Executive Officer to execute agreements for resource adequacy procurement,
subject to Special Counsel approval.
BACKGROUND AND DISCUSSION:
As a load serving entity (LSE), Clean Energy Alliance (CEA) is required to procure resource adequacy (RA),
an energy product to ensure sufficient generating capacity to meet energy demands and ensure
reliability. RA procurement requirements are based on year-ahead forecasted energy demands and
allocated to each LSE by the California Public Utilities Commission.
There are three distinct types of RA that are needed to be procured:
• Local -Identified by the state grid operator (CAISO) to serve the local region
• System -Can be located anywhere in the state
• Flex-Can fulfill either
In recent years local RA has become increasing more difficult to procure due to recent regulatory
changes resulting in a multi-year (3-year) procurement requirement and diminishing supply due to
fewer natural gas plants and clean energy replacements being slow to come on line. These conditions
make it increasingly difficult to find local RA in necessary quantities and are driving up prices.
To increase the likelihood of acquiring the needed local RA, CEA is participating in a solicitation by San
Diego Gas & Electric (SDG&E) in which CEA will submit offers to purchase RA from SDG&E and in parallel
with that process initiated a solicitation process requesting offers from suppliers willing to sell local RA.
CEA's solicitation resulted in several offers of local RA as well as local RA with flex. While the pricing was
higher than what had been assumed in the CEA pro-forma, they are at levels that CEA's consultants are
seeing for other similar solicitations currently being held for other CCAs. It is recommended that CEA
target to procure from the solicitation to fulfill:
• 50% of the 2021-2022 requirements
• 255 -30% of the 2023 requirements
The SDG&E solicitation is still underway, and it is anticipated that some, if not all, of the remaining open
position can be filled through successfully participating in that solicitation. Once that is complete,
should CEA have a remaining open position, subsequent solicitations will continue to be completed to
meet the requirements.
June 18, 2020 Item #9 Page 1 of 2
June 18, 2020
Resource Adequacy
Procurement
Page 2 of 2
CEA is required to demonstrate com pliancy through adequacy procurement via a filing due October 31,
at which time all of CEA's RA obligation must be secured through contracts.
FISCAL IMPACT
Funding for resource adequacy will initially come from CEA's financing solution, to be replaced with
revenues from customers once CEA is operational.
ATTACHMENTS:
None
June 18, 2020 Item #9 Page 2 of 2