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Home My WebLink About1 20 2016 Presentation - MV FinalSaratoga City Council, January 20, 2016 |1 City Council Meeting January 20, 2016 Saratoga City Council, January 20, 2016 |2 Discuss Community Choice Energy Program and the Technical Study findings Consider authorizing an ordinance to implement the Community Choice Aggregation Program This evening Saratoga City Council, January 20, 2016 |3 Community Choice Roadmap •4.15.2015 –Council adopts resolution authorizing City participation in Technical Feasibility Study •Fall/Winter –Council/staff attend 5 program meetings •11.4.2015 –Community Choice Energy Partnership presentation on CCE and proposed JPA •1.20.2016 –1st Reading of ordinance to implement a Community Choice Energy (CCE) Program •2.3.2016 –Council to consider adoption of CCE ordinance and joining the Silicon Valley CE Authority partnership Saratoga City Council, January 20, 2016 |4 Introduction to Community Choice Energy (CCE) Saratoga City Council, January 20, 2016 |5 What is Community Choice Energy? •Customers are automatically enrolled into CCE program •Customers can “opt-out” to stay with PG&E for bundled service •Customers receive at least 4 notices (2 pre-and 2 post-enrollment) Saratoga City Council, January 20, 2016 |6 Accelerating Renewables Solar Wind Biomass Saratoga City Council, January 20, 2016 |7 Why are we considering this? •Transportation and Electricity Consumption are the largest community contributors of GHG •Transforming Electricity Sourcing is essential to reaching goals •Community Choice Energy is the single most impactful strategy in reducing Greenhouse Gas Emissions. Saratoga City Council, January 20, 2016 |8 Saratoga City Council, January 20, 2016 |9 Silicon Valley Community Choice Energy Partnership (SVCCEP) Overview Saratoga City Council, January 20, 2016 |10 Silicon Valley Community Choice Energy Partnership Sponsoring Agencies Sunnyvale | Cupertino | Mountain View | Santa Clara County Also Participating Campbell | Gilroy | Los Altos | Los Altos Hills Los Gatos | Monte Sereno | Morgan Hill | Saratoga Saratoga City Council, January 20, 2016 |11 SVCCEP Priority Goals •Offer renewable energy supply options that exceed the renewable content offered by current utility, PG&E. •Reduce GHG emissions to support local climate action goals. •Provide competitive, potentially lower, electricity rates for all customers. •Facilitate the use of clean technology, local clean power, and other energy innovations. •Create and maintain a local public agency that is well managed and financially sustainable. Saratoga City Council, January 20, 2016 |12 SVCCEP Milestones and Timeline Phase 1 Phase 2 Phase 3 INITIAL STUDY TECHNICAL FEASIBILITY CCE PROGRAM DEVELOPMENT CCE LAUNCH ID potential agency partners ID opportunities, costs, and risks Investigate other CCEs Inform community and gather feedback Framework for next steps ID partners & funding Technical Study: load and rate analysis, economics, supply options, environmental outcomes Community outreach & input JPA Formation Enabling Ordinance Energy Svcs Pricing and Procurement Expand Outreach Implementation Plan to CPUC Agmt with PG&E Bridge financing to revenue Staffing and Org setup Energy and other Service Contracts Customer notifications and service Conservation & Renewables programming Fall 2015 Technical Study Completed Winter 2015-16 Communities Decide  JPA Spring 2016 Implementation Plan to CPUC Winter 2016-17 Program Launch! Summer 2016 Ramp-up Operations and Communications Completed July 2015 We are hereCompleted Nov 2015 Saratoga City Council, January 20, 2016 |13 Overview of Technical Study Key Findings Visit our website: http://www.svcleanenergy.org Saratoga City Council, January 20, 2016 |14 Customer Classification Customer Accounts Customer Accounts (%of Total)Energy Use (MWh)Share of Energy Use (%) Residential 218,049 90%1,336,200 34% Small Commercial 19,120 8%423,180 11% Medium Commercial 2,527 1%569,501 14% Large Commercial 1,166 <1%780,723 20% Industrial 43 <1%771,462 19% Ag and Pumping 944 <1%62,238 2% Street Lighting 1,588 1%20,619 1% TOTAL 243,440 100.0%3,971,985 100% Peak Demand (MW)660 (July) Bundled Energy Use by Customer Classification SVCCE Load Summary Saratoga City Council, January 20, 2016 |15 Technical Study -Scenarios •Additional Assumptions for All Scenarios: Scenario 1 No GHG Redux: Match PG&E GHG, Exceed PG&E RE MAXIMIZE$ Savings Scenario 2 Reduce GHG 20% Exceed CA min. RE51% (Yr 1), 66% (Yr 10) $ Savings Scenario 3 MAXIMIZERE/GHG-Free No $ Savings:Match PG&E $ 2% Opt-Upto 100% RE Local Energy Programs(Net Metering, Feed-in-Tariff) No Unbundled RECs No Nuclear, No Coal 85% Participation Saratoga City Council, January 20, 2016 |16 Tech Study Findings & Conclusions •No “correct” answer, but in general terms, the technical study indicates that the SVCCE program could be economically viable while also achieving the Partners’ environmental objectives Scenario 1 Yr. 1: 36% RE 63% GHG-free 4% cost savings Yr. 10: 49%RE 75% GHG-free 3% cost savings Scenario 2 Yr. 1: 51% RE, 70% GHG-Free 20% GHG savings 3% cost savings Yr.10: 66% RE 80% GHG-Free 20% GHG savings 1% cost savings Scenario 3 Yr. 1: 76% RE 85% GHG-Free 60% GHG savings 1% cost savings Yr.10: 76% RE 97% GHG-Free 86% GHG savings Rate Parity Rate Competitive No GHG Impacts Rate Competitive w/RE & Carbon- Free Content Rate Parity w/ Environmental Benefits Saratoga City Council, January 20, 2016 |17 Risks and Mitigation Risk Mitigation Financial Risk; what if CCE fails JPA structure buffers City liability Required bond posting supports return of customers to PG&E bundled service Competitive Rates Use conservative estimates Do not guarantee cheaper but competitive Invest in energy contracting expertise Phase in conservation programs Market Exposure Protect against opt-out Energy contracting expertise Legislative & Regulatory Risk Proactively engage in proceedings; be represented Partner with other CCEs Effect on Business Probability of Event Saratoga City Council, January 20, 2016 |18 Thank you. Saratoga City Council, January 20, 2016 |19 Additional slides as needed Saratoga City Council, January 20, 2016 |20 Timeline & Next Steps Saratoga City Council, January 20, 2016 |21 JPA Agreement •Engagement with Partners –August –November •Key Provisions: Purpose: energy and energy-related programs Board of Directors: regular Director appointed by and from each governing body; alternate appointed by gov’g body Voting: Action requires affirmative vote by majority of Directors; in addition, a “voting shares” vote may be called based on proportional energy share Funding of Initial Costs: Reimbursed within 4 years Withdrawal Provisions Saratoga City Council, January 20, 2016 |22 Cost Sharing Party Phase 1 Phase 2 and 3 Phase 2 & 3 w/Contingency Campbell --$100,000 $150,000 Cupertino $170,000 $350,000 $450,000 Gilroy --$100,000 $150,000 Los Altos --$100,000 $150,000 Los Altos Hills --$25,000 $25,000 Los Gatos --$100,000 $150,000 Monte Sereno --$25,000 $25,000 Morgan Hill --$100,000 $150,000 Mountain View $170,000 $350,000 $450,000 Santa Clara County (Unincorporated)$170,000 $350,000 $450,000 Saratoga --$100,000 $150,000 Sunnyvale $170,000 $350,000 $450,000 Total $680,000 $2,050,000 N/A Saratoga City Council, January 20, 2016 |23 Pocket Slides Saratoga City Council, January 20, 2016 |24 Risks & Uncertainties •PG&E rate uncertainty (generation rates and exit fees) •Length of current wholesale energy price trough •Availability of large hydro resources to meet carbon-free content goals •Opt-out rate uncertainty •Overall program size given participation of specific jurisdictions •Credit structure for power supply •Future CCA-specific legislation •Regulatory changes around renewable and capacity mandates Saratoga City Council, January 20, 2016 |25 Summary of Results –Year 1 Key Considerations Scenario 1 Scenario 2 Scenario 3 General Environmental Benefits 36% Renewable 63% GHG-Free 51% Renewable 70%GHG-Free 76%Renewable 85%GHG-Free Maximum Rate Competitiveness Average 4% savings relative to PG&E rate projections Average 3% savings relative to PG&E rate projections Average savings < 1% relative to PG&E rate projections Projected Residential Customer Relative Cost Impacts Average monthly usage for residential ≈ 510 kWh Average monthly cost relative to PG&E rate projections: $5.09 savings Average monthly cost relative to PG&E rate projections: $3.49 savings Average monthly cost relative to PG&E rate projections: $0.76 savings Comparative GHG Emissions Impacts 0.158 metric tons CO2/MWh Zero incremental GHG emissions impacts 0.126 metric tons CO2/MWh ≈38,000 metric ton GHG emissions reduction (20%) 0.064 metric tons CO2/MWh ≈112,000 metric ton GHG emissions reduction (60%) Saratoga City Council, January 20, 2016 |26 Summary of Results –Year 10 Key Considerations Scenario 1 Scenario 2 Scenario 3 General Environmental Benefits 49% Renewable 75% GHG-Free 66% Renewable 80%GHG-Free 76%Renewable 97%GHG-Free Maximum Rate Competitiveness Average 3% savings relative to PG&E rate projections Average 1% savings relative to PG&E rate projections General rate parity results in minimal cost impact. Projected Residential Customer Relative Cost Impacts Average monthly usage for residential ≈ 510 kWh Average monthly cost relative to PG&E rate projections: $4.19 savings Average monthly cost relative to PG&E rate projections: $1.93 savings Average monthly cost relative to PG&E rate projections: $0.14 increase Comparative GHG Emissions Impacts 0.109 metric tons CO2/MWh Zero incremental GHG emissions impacts 0.087 metric tons CO2/MWh ≈82,000 metric ton GHG emissions reduction (20%) 0.015 metric tons CO2/MWh ≈352,000 metric ton GHG emissions reduction (86%)