HomeMy WebLinkAbout2020-11-19; Clean Energy Alliance JPA; ; 11/19/2020 CEA JPA ExhibitsClean Energy Alliance
JOINT POWERS AUTHORITY
Regular Board Meeting
November 19, 2020, 2 p.m.
Hosted by the City of Solana Beach
11/19/20 CLEAN ENERGY ALLIANCE - FINAL
Item 6: Authorize Execution of Escrow
Agreement and Establishment of
Secured Account to Satisfy Updated
Financial Security Requirement
Barbara Boswell, Interim Chief Executive Officer
CLEAN ENERGY ALLIANCE - FINAL 2
Item 6: Updated Financial Security
Requirement
Recommendation
o Authorize Interim CEO to execute an escrow agreement with River
City Bank and San Diego Gas & Electric and establishment of a new
account with River City Bank in satisfaction of the new Financial
Security Requirement, subject to General Counsel approval.
o Appropriate $147,000 for the Financial Security Requirement, to be
funded by an increase in the loan from Calpine Energy Solutions.
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Item 6: Updated Financial Security
Requirement
•Background:
O CPUC issued Decision 18-05-022 which establishes financial
security requirements for CCAs
0 Purpose to cover costs borne by IOU in the event of a mass
involuntary return of CEA customers to the IOU.
0 Costs covered include procurement and administrative costs
O Sets minimum FSR at $147,000 — to be recalculated every 6
months
O CEA posted its initial CCA bond in March at $100,000
O Will be returned once new amount has been satisfied
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Item 6: Updated Financial Security
Requirement
•Background:
O FSR can be satisfied in three ways:
o Letter of credit.
o Surety Bond
o Cash deposited with 3rd party secured by Escrow Agreement
O Staff working with SDG&E and River City Bank to develop
Escrow Agreement
o CEA must file Advice Letter with CPUC showing evidence of
satisfying requirement by December 8, 2020.
•Proposed to be funded by loan from Calpine
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Item 6: Financial Security Requirement
Board Discussion
11/19/20 CLEAN ENERGY ALLIANCE - FINAL 5
Item 7: Approve Increase in
Promissory Note with Calpine
Energy Solutions
Barbara Boswell, Interim Chief Executive Officer
CLEAN ENERGY ALLIANCE - FINAL
Item 7: Approve Increase in Promissory
Note with Calpine Energy Solutions
•Recommendation
0 Authorize increase in promissory note with Calpine Energy Solutions
from $400,000 to $650,000 to provide funding for Financial Security
Requirement and Resource Adequacy collateral Requirements.
11/19/2u CLEAN ENERGY ALLIANCE - FINAL 8
Item 7: Approve Increase in Promissory
Note with Ca!pine Energy Solutions
•Background
o Agreement with Calpine Energy Solutions included loan up to
$650,000 for start up costs
o August 20, 2020 CEA Board authorized Promissory Note for
$400,000 for admin costs through January 2021
o Unforeseen costs have come up that result in recommendation to
increase to $650,000
o $147,000 Financial Security Requirement — must post prior to refund
of $100,000 current held by CPUC
0 Cash Collateral Requirements for RA transactions
11/19/20 CLEAN ENERGY ALLIANCE - FINAL 9
Item 7: Approve Increase in Promissory
Note with Calpine Energy Solutions
•Background
o Loan repayments to begin 3 months after serving customers
o Repayment over 12 months
o No recourse to Member Agencies
o Interest rate of 1-month LIBOR + 2%
0 Currently 1-Month LIBOR is 13638
CLEAN ENERGY ALLIANCL - FINAL 10
Item 7: Approve Increase in Promissory
Note with Calpine Energy Solutions
Board Discussion
11119/20 GLEAN ENERGY ALLIANCE- FINAL 11
Item 8: Authorize Chief Executive
Office to Negotiate Terms for CEA
Credit Solution
Barbara Boswell, Interim Chief Executive Officer
CLEAN ENERGY ALLIANCE - FINAL
Item 8: CEA Credit Solution
•Recommendation:
0 Authorize Interim CEO to negotiate terms for CEA Credit Solution
11/19/20 CLEAN ENERGY ALLIANCE - FINAL 13
Item 8: CEA Credit Solution
Background:
February 20, 2020
June 18, 2020
July 8, 2020
July 14, 2020
July 20, 2020
July 28, 2020
August 20, 2020
Considered RFP responses for Credit Solution and put selection on hold until June 2020
Considered Credit Solution offers from JP Morgan and River City Bank. Directed staff to
reach out to Member Agencies regarding providing guaranty for River City Bank option for
$2.5M of a total $4.0M credit solution.
City of Solana Beach City Council approved guaranty up to $175,000
City of Carlsbad City Council directed staff to return with to City Council with potential loan
to CEA in lieu of providing guaranty
City of Del Mar City Council approved guaranty up to $75,000
City of Carlsbad City Council considered loan terms and conditions; did not approve making
loan to CEA.
CEA Board approved executing promissory note with Calpine Energy Solutions for
administrative costs through January 2021
11/19/20 CLEAN ENERGY ALLIANCE - FINAL 14
Item 8: CEA Credit Solution
•Updated Funding Need:
Admin Costs Feb —June 2021 $540,000
CAISO Deposit 500,000
Deposits 245,000
Energy Supply Costs 3,057,808
TOTAL FUNDING NEED $4,342,808
11/19/20 CLEAN ENERGY ALLIANCE - FINAL 15
Item 8: CEA Credit Solution
•Updated Credit Terms:
•JP Morgan
o Increase term from 3 years to 5 years
o Revised rate covenants to only those costs not covered by
other sources
ID Open to discussions re: carve out for a rate subsidy program
•River City Bank
o Willing to consider no guaranty from Member Agencies
•Both options subject to credit approval
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Item 8: CEA Credit Solution
•Recommend working with both financial institutions to initiate
application process to determine best option
•Return with final option December 17, 2020
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Item 8: CEA Credit Solution
Board Discussion
11/19/20 CLEAN ENERGY ALLIANCE FINAL 18