CCA s WHERE ARE THEY NOW? Dan Aschenbach AGVP Advisory Justin - - PowerPoint PPT Presentation
CCA s WHERE ARE THEY NOW? Dan Aschenbach AGVP Advisory Justin Riddell The Energy Authority Introduction Created to provide choice in energy California Physical Power Mission: S ustainable energy initiatives
Dan Aschenbach –AGVP Advisory Justin Riddell –The Energy Authority
Created to provide choice in energy
California Physical Power
Mission: S ustainable energy initiatives
Vision: Energy conservation and efficiency; Locally-sourced energy needs
Types of CCAs
Joint Powers Authority S
ingle Jurisdiction
Commercial Vendor Package
S
S
CCA
S ecure bulk power
S
Rate-setting authority
Opt-Out
Opt-Up
IOU
Billing & Collection
Transmission
Distribution
CCAs are self-regulated and have local control on power resource planning after CPUC approves initial plan
Rate-setting authority is responsibility of CCA governing board
Territory that the CCA is serving
Customers in service area of IOU are automatically CCA customers once CCA governing board approves program.
But CCA customer can opt-out and go back to IOU
CCA can charge an exit fee which could compensate CCA for any costs incurred on customer’s behalf-no experience thus far on implementing fee
CCA Base Rate Choice 100% Solar NEM AVCCE 35% 50% 100% 100% CPS F 39% 48% 100% CP A 36% 50% 100% MCE 60% 100% 100% PRIME 50% 100% 100% RMEA 50% 100% 100% S JCE 45% 100% 100% S VCE 50% 100% S EA 50% 100% 100%
S tart-up funding
Inherently the largest risk is during the start-up phase Invoicing and Payment schedule
IOU Payments
PG&E Bankruptcy Judge ruled that funds do not belong to the IOU (PG&E), must flow to CCA
Implicit vs Explicit support
Linkage to county/ city
Lockbox
Strengths
Rate-setting autonomy
Focus on popular renewable energy and efficiency programs
Few legacy out -of-the-money
contracts
Competitiveness
Broad political support from city mayors to legislators and statutory basis for CCA role
Comment
Local control and flexibility
Targeted service provides reputational strength
Thus far discount to maj or IOUs
Accepted role and continued evidence of legislative support
Risks
Opt-out risk
Long-term fixed power supply vs. adequacy of cost recovery
Competitiveness
Pressure to keep rates lower than
IOU
JP A withdrawal
PGE bankruptcy
Comment
Uncertainty about future cost recovery
Market risk
Relates to opt-out risk
S ection 6.2 untested
Judge ruling on CCA revenues are CCA revenues
A charge in the rate-setting structure that is meant to leave the IOU whole.
Determined by the California PUC.
CCAs do not have the ability to alter this PCIA charge to customers.
Exit-fee to all IOU customers.
Represents the cost the IOU bears for power that was already purchased for load prior to CCA establishment.
General Design
Accounts Receivables from ratepayers, collected through the IOU, are routed through the lockbox.
S uppliers have access to the lockbox and first right of withdraw.
S uppliers have the right to future cash flows through the lockbox in the event of default.
Customizable.
S trengths and Concerns
Form of collateral, especially during start-up phase.
Gives S upplier first right
How many S uppliers are in the lockbox?
S hortfalls: Can take time to get full reimbursement.
Moody’s Methodology: US Municipal Joint Action Agencies
Credit Quality & Cost Recovery Framework Resource Risk Management Competitiveness Financial S
trength & Liquidity
Willingness to Recover Costs
Marin Clean Energy: Baa2/ S table; Fitch-BBB/ S table
Peninsula Clean Energy Authority: Baa2/ S table
Little to no long-term debt
Positive Net Income
Cash Provided By (Used in) Operations
Larger established CCAs have
sizable Cash Provided by Operations.
S
maller CCAs are much lower and even negative (used in).
Cash Balances
Indicative of the county and
maturity
Look at the unrestricted cash
Little to no CAPEX.
Monterey Bay Community Power expansion to include eleven cities.
Largest, geographically speaking, of all CCAs in California.
Marin Clean Energy added Contra Costa County in 2019.
S
Desert Community Energy starts April 1, 2020.
Palm S
prings, Cathedral City, and Palm Desert.
Western Community Energy starts S pring 2020.
Norco, Perris, and Wildomar launch April 2020. Jurupa Valley, Hemet, and Eastvale will launch in May 2020.
Offsetting the effects of PG&E’s Public S afety Power S hutoffs
Infrastructure
S
some of PG&E's infrastructure for the Northern California counties
Valley Clean Energy board made a $300 million offer for PG&E’s assets
Microgrids
CPUC Rulemaking
RA Requirements
Grants available from the S
tate
Battery S torage
32.7 megawatts of battery energy storage devices
The CCAs in Nov. 2019 passed 3,000 MW of contracted renewable energy.
10,000 MW of renewable energy contracts are planned by 2030.