Peninsula Clean Energy Board of Directors Special Mee9ng November - - PowerPoint PPT Presentation

Peninsula Clean Energy Board of Directors

Special Mee9ng

November 12, 2016 June 23, 2016

Agenda

Call to order / Roll call Ac9on to set the agenda: 8:30 – 9:00 Refreshments 9:00 – 9:05 Introduce Schedule for the day 9:05 – 9:15 Public Comment 9:15 – 11:15 Adopt PCEA Mission Statement and Long-term Strategic Goals (Ac9on) 11:15 – 11:45 Discuss and possibly adopt policies on qualita9ve evalua9on criteria for PCE suppliers (Ac9on)

Special Agenda

11:45 – 12:15 Lunch Break 12:15 – 1:30 Overview of PCE’s Procurement Requirements (Discussion) 1:30 – 2:00 PCIA – its History and Current Regulatory Issues (Discussion) 2:00 – 2:45 Provide Input on Future of Ci9zens Advisory Commi[ee (Discussion) 2:45 – 3:00 Wrap-Up

Special Agenda

Special Agenda 9:05 – 9:15 Public Comment

Special Agenda 9:15 – 11:15 Adopt PCEA Mission Statement and Long-term Strategic Goals

Special Agenda 11:15 – 11:45 Discuss and possibly adopt policies on qualita9ve evalua9on criteria for PCE suppliers

Special Agenda 11:45 – 12:15 Lunch Break

Special Agenda 12:15 – 1:30 Overview of PCE’s Procurement Requirements

Peninsula Clean Energy Board of Directors Special Mee9ng

November 12, 2016 June 23, 2016

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• Determining how much energy and other products we need to purchase

– Load forecast – Energy products – Matching supply to load – Load and resource status (2017 and beyond)

• Matching supply to load

– The duck curve – Renewable generaJon profiles

• Managing the grid

– Sources and sinks – Balancing authoriJes – California, regional, naJonal

• Solar PV basics

– Technology – Price trends – Examples

PCE’s Power Procurement Requirements

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Proprietary Slides Removed

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Special Agenda 1:30 – 2:00 PCIA – its History and Current Regulatory Issues

Power Charge Indifference Adjustment

History & Issues

Pradeep Gupta Peninsula Clean Energy Board Retreat November 12, 2016

What will I talk about?

• Should we care about PCIA? You bet..
• Why PCIA and what goes in it?
• A few serious issues we have discovered.

0.6 1.13 1.21 2.385 2.912

0.5 1 1.5 2 2.5 3 3.5 2013 2014 2015 2016 2017

PCIA (cents/kwh)

PG&E is asking $246 M in 2017 from its PCIA accounts. PCIA will rise to about 3 cents/ kwh, 0.5 cents higher than 2016.

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 2009 2010 2011 2012 2013 2014 2015 2016 2017

Proposed 2017 PCIA Charge (cents/ kwh)

Residen'al Small Commercial Medium Commercial Large Commercial

Note that residen'al customers are paying higher share of overall PCIA revenue.

9.7 2.4 7.3 9.4 2.9 6.4 2 4 6 8 10 12 PG&E Genera9on PCIA PCE Compe99ve Price

Impact on PCE Rates cents/kWh

2016 2017 Double Whammy

For every $1 PG&E will spend on electricity genera'on, PCE will only be able to spend $0.68 to remain compe''ve.

Power Charge Indifference Adjustment

• PCIA is a u9lity exit fee aimed at recovering stranded u9lity costs

resul9ng from depar9ng customer load. It pays for power that has been contracted by the u9lity but is no longer needed by depar9ng customers.

• The idea is to keep the bundled ratepayer from being adversely

impacted by depar9ng load brought about by CCAs.

• The PCIA methodology is in dire need of reform, greater

transparency, and greater accountability.

PCIA Methodology

§ The PCIA represents the difference between the u9li9es’ contracted rate and the market price benchmark set annually by the CPUC. In essence, we pay the difference between power prices of several years ago and wholesale prices today. § The market price benchmark (MPB) represents what the u9lity would get in the current market to sell-off unused power contracts. § RPS adder, a component of MPB, uses average of DOE Survey of Western energy premiums and PG&E’ RPS compliant resources.

PCIA Issues Discovered

(Oct 27 Workgroup Mee9ng)

• Structure unfair to CCAs

– Gas prices not adjusted for hedging ac9vi9es, so any gain from successful hedging remains with IOUs. – PCIA is based on forecast prices, and is not trued up for departed customers

• Transparency

– Confiden9ality provisions to prevent market manipula9on, reduce transparency.

• Methodological

– Both IOUs and CCAs agree that market price benchmark could be improved. – How contract amendments by IOUs get treated for PCIA purposes.

CCA Goals

• Fix PCIA issues
• Reduce vola9lity of PCIA

– Procurement of addi9onal renewables, reduce rates, launch new programs.

• IOUs should consider buying "op9ons" rather than "contracts".
• PCIA for small amounts of depar9ng loads may not be accurate

for higher penetra9on.

• Be[er transparency
• Sunset date
• Be[er understanding of "unavoidable" vs "avoidable" costs.

Special Agenda 2:00 – 2:45 Provide Input on Future of Ci9zens Advisory Commi[ee

Special Agenda 2:45 – 3:00 Wrap-Up

Adjourn – Thank You!

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