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Home My WebLink About2021-05-27; Clean Energy Alliance JPA; ; Clean Energy Alliance Operational, Administrative and Regulatory Affairs UpdateCLEAN ENERGYALLIANCE Staff Report DATE: May 27, 2021 TO: Clean Energy Alliance Board of Directors FROM: Barbara Boswell, Interim Chief Executive Officer ITEM 4: Clean Energy Alliance Operational, Administrative and Regulatory Affairs Update RECOMMENDATION 1)Receive and File Operational and Administrative Update Report from Interim CEO. 2)Receive Community Choice Aggregation Regulatory Affairs Report from Special Counsel. BACKGROUND AND DISCUSSION This report provides an update to the Clean Energy Alliance (CEA) Board regarding the status of the operational, administrative and regulatory affairs activities. OPERATIONAL UPDATE CEA is meeting its milestones for the implementation of its community choice aggregation (CCA) program and is on track to begin serving customers in May 2021/June 2021. CEA Launch Update CEA enrolled its first customers beginning May 1, 2021, and will enroll throughout May and June. The majority of customers will begin service with CEA in May, with Carlsbad and Del Mar Net Energy Metering (rooftop solar) and customers with complex billing enrolling in June. Customers will receive two more notices after being enrolled, the first within 30 days of enrollment and the last within 60 days of enrollment. Net Energy Metering (NEM) customers received a letter (Attachment A) that outlines CEA's NEM program and impacts of enrollment in CEA. NEM customers with a May true-up and Solana Energy Alliance NEM customers are enrolling in CEA in May, with all NEM customers scheduled for a June enrollment. A key impact for NEM customers to be aware of, is enrollment with CEA will trigger a true- up of their charges and credits with San Diego Gas & Electric (SDG&E) regardless of where they are in their relevant period. May 27, 2021 Admin & Regulatory Update Page 2 of 3 Call Center Activity CEA's call center opened in mid-March to coincide with the first enrollment notices. Through May 16 there have been 1,370 total calls to the call center, with 1,339 calls being connected to an agent. Calls are being answered on average in 9 seconds. Through May 16 there have been 2,262 opt outs, resulting in a current participation rate of 96.01% for new Carlsbad & Del Mar customers, and 95.33% after taking into account Solana Energy Alliance customers and their existing opt outs. CEA's pro forma had estimated a participation rate of 90%. There have been 66 opt ups to Green Impact 100% renewable and no opt downs to CEA's Clean Impact. Customers that do not opt-out of CEA will be automatically enrolled in CEA at the end of their billing period in the month of enrollment. SDG&E Envision Project After many years of planning, SDG&E's Envision system went live on April 4, 2021, and so far, there are no issues or concerns related to CEA's implementation. The Envision project is a major billing system replacement project for SDG&E, whose implementation schedule was delayed from January 2021 to April 2021. SDG&E worked closely with Calpine to fully test functionality and data exchange between the two entities. These efforts have resulted in the good results that are being seen in the live environment. CEA Communications and Marketing Update Over the past month CEA has been very busy with its Communications and Marketing efforts. These have included: Three social media posts weekly targeting areas of concern that have come to the attention of the communications team. Advertorials in the Coast News; a booth at the Carlsbad Chamber of Commerce Green Business Expo held at the Flower Fields on April 4; a presentation to the Encinitas and North County Democratic Club and presentation to the Carlsbad Chamber of Commerce Green Committee. Staff has also met with key customers including continuing to work with San Diego County Water Authority, Encinas Water Authority, Carlsbad Unified School District and Solana Beach School District. Expansion of Clean Energy Alliance Pursuant to CEA Board direction a letter has been sent to the cities of Escondido, Dana Point, San Clemente, San Marcos, Santee and Vista. No response has been received from the letters. Additional letters will be going out to cities of Lemon Grove, National City, Poway and El Cajon. Resource Adequacy Compliance As a load serving entity serving customers in 2021, CEA has an obligation to procure Resource Adequacy (RA), based on quantities allocated by CPUC and California Independent System Operator (CA150). RA procurements do not supply any energy to CEA or its customers, rather it commits the seller to be available to supply energy to the grid if called upon by the CAISO and reduce the possibility of outages. This process is key to ensuring grid reliability. CEA successfully procured all its RA requirements and is fully compliant with its RA obligation. May 27, 2021 Admin & Regulatory Update Page 3 of 3 Long-Term Renewable Procurement As a load serving entity, CEA will be required to procure 65% of its minimum state required renewable portfolio standards in contracts of ten-years or longer. To ensure compliance with this requirement, CEA's initial renewable energy solicitation is underway. The solicitation process, from beginning through final execution can be lengthy, particularly in light of the impacts of COVID-19 on the renewable development industry. The solicitation opened on July 1, 2020, with proposals due July 27, 2020. CEA's consultant, Pacific Energy Advisors, has identified a short list of projects and negotiations are proceeding. Final power purchase agreements will be brought to the CEA Board for consideration of approval. Staff has also begun discussions with SDG&E regarding entering into bilateral agreements for the procurement of renewable energy. These discussions are on-going, and any proposed agreement will be brought to the CEA Board for consideration of approval. Contracts $50,000 - $100,000 entered into by Interim Chief Executive Officer VENDOR DESCRIPTION AMOUNT None REGULATORY UPDATE CEA's regulatory attorney, Ty Tosdal, will provide an update to the Board on current regulatory activities (Attachment B). FISCAL IMPACT There is no fiscal impact by this action. ATTACHMENTS Attachment A — Letter sent to Clean Energy Alliance Net Energy Metering customers Attachment B — Tosdal APC Regulatory Update Report Item 4 Attachment A CLEAN ENERGY ALLIANCE «Customer_Name» «Mail_Address_1» «AD_CITY», «AD_ST» «AD_ZIP» RE: Clean Energy Alliance Implementation and Related Changes to your Net Energy Metering Program SDG&E® Account #: «ACCT_NBR» Service Address: aService_Address_1» Dear «Customer_Name»: As a Net Energy Metering (NEM) customer, we have some exciting news to share with you! As you may be aware, the Cities of Carlsbad, Del Mar and Solana Beach are in the process of launching Clean Energy Alliance (CEA), a community choice energy program that provides greener energy to residents and businesses at competitive rates. Beginning in May 2021 with enrollments happening through June, CEA will replace San Diego Gas & Electric® (SDG&E®) as the default energy provider, with energy produced from 50% renewable/75% greenhouse gas- free sources. As an SDG&E NEM customer, you will be automatically enrolled in CEA's NEM program, which provides a NEM Net Surplus Compensation Rate that exceeds SDG&E's current rate. When your service account(s) transfers to CEA, SDG&E and CEA will work together to continue providing your account(s) with NEM service. Under this arrangement, SDG&E will be responsible for monthly NEM electric delivery service charges, credits and tracking excess generation and CEA will be responsible for monthly NEM electric generation charges and credits, based on CEA's lower rates. Any NEM credits received from CEA cannot be used to offset SDG&E charges, and NEM credits received from SDG&E cannot be used to offset CEA charges. At the end of the 12- month relevant true-up period, if your system has generated more power than you have used, you will be eligible for Net Surplus Compensation (NSC) at CEA's higher rate of $.06 per kWh. There is no impact to customers NEM 1.0 and NEM 2.0 qrandfatherinq status by enrolling in CEA NEM service. On the effective date that your account(s) begin service with CEA: •Your SDG&E Net Energy Metering Relevant Period will be trued-up regardless of what month you are in your current relevant period. When customers switch from one energy supply provider to a new energy provider, all credits and charges need to be reconciled before starting the new service. Any balance owed at the time of true-up will be due. The 1200 Carlsbad Village Drive I Carlsbad, CA 92008 I (833) 232-3110 thecleanenergyalliance.org 2 effective date that you begin service with CEA is also the effective date of your new relevant true-up period for SDG&E and CEA. •Your relevant true-up period will be reset to end 12-months after the start of the new relevant period of each year. •SDG&E will be responsible for tracking charges and credits related to energy delivery only. •Your CEA electric generation charges will be escrowed and tracked throughout the relevant period. •At the end of the relevant period your account will be trued-up. o Energy generation credits, (based on applicable retail rates), accrued during the relevant true-up period will be used to offset energy generation charges (based on applicable retail rates). o Any energy charges not offset by energy credits at the time of true-up will be billed to you on the CEA portion of your SDG&E bill. o Any energy credits that exceed energy charges are set to zero for the start of the new relevant true-up period. •The amount of your excess generation kWh will be paid out at CEA's higher Net Surplus Compensation (NSC) of $.06 per kWh. •NSC Payments in equal to or greater than $100 will be paid via a check. •NSC payments less than $100 will be credited to the customer's bill to offset future charges in the next relevant period. •Once your account(s) transfers to CEA's NEM program, your account(s) will be eligible for CEA's NSC and no longer eligible for SDG&E's NSC. •There is no impact to NEM 1.0 and NEM 2.0 grandfathering status by enrolling in CEA NEM service. If you have any questions regarding CEA's program, rates, or opt out procedures, please contact us directly at (833) 232-3110 or visit us online at www.TheCleanEnergyAlliance.org. If you have any questions regarding SDG&E service, related programs or rate options, please contact SDG&E's Customer Care Center at (800) 411-7343. Thank you, Clean Energy Alliance Item 4 Attachment B Clean Energy Alliance Board Update May 27, 2021 T SDAL Ty Tosdal Tosdal APC ENERGY 8. ENVIRONMENTAL LAW Overview •AB I 139 and NEM Proceeding (R.20-08-020) •Update: SB 612 and PCIA Decision (R. 17-06-026) •Direct Access Expansion (R.19-03-009) AB 1139 •Directs CPUC to overhaul NEM rates. •Eliminates grandfathering for customers who have been on any previous NEM tariff for 10 + years. •Projects eligible for the new tariff after 2023 are "public works projects" under the Labor Code. •Imposes interconnection fees and wholesale net generation credits on the NEM tariff if the CPUC does not adopt a new tariff by February 2022. NEM Proceeding Background •Rulemaking established to modify the NEM Tariff. •Referred to as NEM 3.0 because this is the third iteration of the NEM rulemaking. •Previous NEM rulemakings (NEM 1.0 and 2.0) have been extremely controversial. •New tariff is applicable to IOU customers, but not directly applicable to CCA customers. •Eighteen different party proposals under consideration. NEM Proceeding Proposals •Joint IOU proposal would (I) default NEM customers onto new TOU rates, (2) set new export compensation, (3) impose a grids benefit charge commensurate to size of system, and (4) a customer charge to recover billing costs. •CALSSA proposal would (I) step down existing, export compensation over time to 45% of retail compensation based on capacity thresholds, (2) Full retail compensation for exports from low income, CARE and multi-family, (3) no changes for commercial customers, (4) monthly true ups. NEM Proceeding Procedural Schedule •May 28 — Cost Effectiveness Analysis Results •June 18 — Opening Testimony Served •July 26 — Evidentiary Hearings •August 27 — Opening Briefs •September 10 — Closing Briefs •December I 0 or sooner — Proposed Decision Update: Senate Bill 612 •Passed Senate Utilities Committee. •SB 612 would require IOUs to offer an allocation of each power product (RPS, RA, GhG-free) in the IOU portfolio to CCA programs. •RPS resources with I 0 or more years remaining under contract must also be offered for allocation. •CCA programs can elect amount •Resources are valued at the Market Price Benchmark currently used in the PCIA formula. PCIA Decision •Revised Proposed Decision lifts annual PCIA cap, but leaves cap in place for SDG&E in 2021. •Adopts RPS, but rejects RA and GHG-Free allocation mechanisms. •Allocated RPS can be resold. •Declines to address ERRA timing issues. Direct Access Expansion •Proposed Decision recommends against further expansion of direct access. •"[U]nacceptable risk to the state's long-term reliability goals" considering recent outages in CA,TX. •Potential to undermine state GhG emissions goals due to heavy reliance on unspecified system power (75.6%) and challenges meeting long-term RPS requirements •Previous expansion pursuant to SB 237 (4,000 GwH = 2% statewide load) •Final decision expected June 24, 2021. Direct Access Expansion Figure: Estimated 2021 California Load CCA Load •IOU Load Source: CPUC Staff Report on DA Expansion. 24,488 14% 90,921 51% 60,021 33% •Current Direct Access Load •Additional Direct Access Load (SB 237)