PeninsulaCleanEnergyBoardofDirectors

SpecialMee9ngNovember12,2016

June23,2016

AgendaCalltoorder/RollcallAc9ontosettheagenda:8:30–9:00Refreshments9:00–9:05IntroduceSchedulefortheday9:05–9:15PublicComment9:15–11:15AdoptPCEAMissionStatementandLong-termStrategicGoals(Ac9on)11:15–11:45Discussandpossiblyadoptpoliciesonqualita9veevalua9oncriteriaforPCEsuppliers(Ac9on)

SpecialAgenda

11:45–12:15LunchBreak12:15–1:30OverviewofPCE’sProcurementRequirements(Discussion)1:30–2:00PCIA–itsHistoryandCurrentRegulatoryIssues(Discussion)2:00–2:45ProvideInputonFutureofCi9zensAdvisoryCommi[ee(Discussion)2:45–3:00Wrap-Up

SpecialAgenda

SpecialAgenda

9:05–9:15PublicComment

SpecialAgenda

9:15–11:15AdoptPCEAMissionStatementandLong-termStrategicGoals

SpecialAgenda

11:15–11:45Discussandpossiblyadoptpoliciesonqualita9veevalua9oncriteriaforPCEsuppliers

SpecialAgenda

11:45–12:15LunchBreak

SpecialAgenda

12:15–1:30OverviewofPCE’sProcurementRequirements

PeninsulaCleanEnergyBoardofDirectorsSpecialMee9ng

November12,2016

June23,2016

9

•  Determininghowmuchenergyandotherproductsweneedtopurchase–  Loadforecast–  Energyproducts–  Matchingsupplytoload–  Loadandresourcestatus(2017andbeyond)

•  Matchingsupplytoload–  Theduckcurve–  RenewablegeneraJonprofiles

•  Managingthegrid–  Sourcesandsinks–  BalancingauthoriJes–  California,regional,naJonal

•  SolarPVbasics–  Technology–  Pricetrends–  Examples

PCE’sPowerProcurementRequirements

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ProprietarySlidesRemoved

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SpecialAgenda

1:30–2:00PCIA–itsHistoryandCurrentRegulatoryIssues

PowerChargeIndifferenceAdjustment

History&Issues

PradeepGupta

PeninsulaCleanEnergyBoardRetreatNovember12,2016

WhatwillItalkabout?

•  ShouldwecareaboutPCIA?Youbet..

•  WhyPCIAandwhatgoesinit?

•  Afewseriousissueswehavediscovered.

0.6

1.13 1.21

2.385

2.912

0

0.5

1

1.5

2

2.5

3

3.5

2013 2014 2015 2016 2017

PCIA(cents/kwh)

PG&Eisasking$246Min2017fromitsPCIAaccounts.PCIAwillrisetoabout3cents/kwh,0.5centshigherthan2016.

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

Proposed2017PCIACharge(cents/kwh)

Residen'al

SmallCommercial

MediumCommercial

LargeCommercial

Notethatresiden'alcustomersarepayinghighershareofoverallPCIArevenue.

9.7

2.4

7.3

9.4

2.9

6.4

0

2

4

6

8

10

12

PG&EGenera9on PCIA PCECompe99vePrice

ImpactonPCERatescents/kWh

2016

2017

DoubleWhammy

Forevery$1PG&Ewillspendonelectricitygenera'on,PCEwillonlybeabletospend$0.68toremaincompe''ve.

PowerChargeIndifferenceAdjustment

•  PCIAisau9lityexitfeeaimedatrecoveringstrandedu9litycostsresul9ngfromdepar9ngcustomerload.Itpaysforpowerthathasbeencontractedbytheu9litybutisnolongerneededbydepar9ngcustomers.

•  Theideaistokeepthebundledratepayerfrombeingadverselyimpactedbydepar9ngloadbroughtaboutbyCCAs.

•  ThePCIAmethodologyisindireneedofreform,greatertransparency,andgreateraccountability.

PCIAMethodology§  ThePCIArepresentsthedifferencebetweentheu9li9es’contracted

rateandthemarketpricebenchmarksetannuallybytheCPUC.Inessence,wepaythedifferencebetweenpowerpricesofseveralyearsagoandwholesalepricestoday.

§  Themarketpricebenchmark(MPB)representswhattheu9litywouldgetinthecurrentmarkettosell-offunusedpowercontracts.

§  RPSadder,acomponentofMPB,usesaverageofDOESurveyofWesternenergypremiumsandPG&E’RPScompliantresources.

PCIAIssuesDiscovered(Oct27WorkgroupMee9ng)

•  StructureunfairtoCCAs–  Gaspricesnotadjustedforhedgingac9vi9es,soanygainfromsuccessfulhedgingremainswithIOUs.

–  PCIAisbasedonforecastprices,andisnottruedupfordepartedcustomers

•  Transparency–  Confiden9alityprovisionstopreventmarketmanipula9on,reducetransparency.

•  Methodological–  BothIOUsandCCAsagreethatmarketpricebenchmarkcouldbeimproved.

–  HowcontractamendmentsbyIOUsgettreatedforPCIApurposes.

CCAGoals

•  FixPCIAissues•  Reducevola9lityofPCIA

–  Procurementofaddi9onalrenewables,reducerates,launchnewprograms.

•  IOUsshouldconsiderbuying"op9ons"ratherthan"contracts".•  PCIAforsmallamountsofdepar9ngloadsmaynotbeaccurate

forhigherpenetra9on.•  Be[ertransparency•  Sunsetdate•  Be[erunderstandingof"unavoidable"vs"avoidable"costs.

SpecialAgenda

2:00–2:45ProvideInputonFutureofCi9zensAdvisoryCommi[ee

SpecialAgenda

2:45–3:00Wrap-Up

Adjourn–ThankYou!

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