COMMUNITY CHOICE AGGREGATION IMPLEMENTATION PLAN DEVELOPMENT

PCE Project Advisory CommitteeJanuary 28, 2016

CCA Implementation Plan: OverviewThe Plan is:• A statutory requirement: Public Utilities Code, Section 366.2.(c)(3)• Provides detail regarding process and consequences of aggregation• A document that must be considered and adopted at a public hearing• A document that must be submitted to (and certified by) the CPUC

The Plan is not:• A detailed business plan for all intended programs of the CCE• A detailed inventory of intended tariff options• A description of future projects that may be developed/financed by

the CCE

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Implementation Plan – What is required?To meet pertinent requirements of the Public Utilities Code (Code), the Plan must address the following elements:• An organizational structure of the program, its operations,

and its funding.• Ratesetting and other costs to participants.• Provisions for disclosure and due process in setting rates

and allocating costs among participants.• The methods for entering and terminating agreements with

other entities.

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Implementation Plan – Other required elementsThe Code also specifies that the Plan address:• The rights and responsibilities of program participants,

including, but not limited to, consumer protection procedures, credit issues, and shutoff procedures.

• Termination of the program.• A description of the third parties that will be supplying

electricity under the program, including, but not limited to, information about financial, technical, and operational capabilities.

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Plan Contents & AB117 Compliance: MCEAB 117 Requirement Implementation Plan Chapter*Statement of Intent Chapter 1: IntroductionProcess and consequences of aggregation Chapter 2: Aggregation ProcessOrganizational structure of the program, its operations and funding

Chapter 3: Organizational StructureChapter 4: Startup Plan and FundingChapter 7: Financial Plan

Ratesetting and other costs to participants Chapter 8: RatesettingChapter 9: Customer Rights and

ResponsibilitiesDisclosure and due process in setting rates and allocating costs among participants

Chapter 8: Ratesetting

Methods for entering and terminating agreements with other entities

Chapter 10: Procurement Process

Participant rights and responsibilities Chapter 9: Customer Rights and Responsibilities

Description of third parties that will be supplying electricity under the program, including information about financial, technical and operational capabilities

Chapter 10: Procurement Process

Termination of the program Chapter 11: Contingency Plan for Program Termination

*Chapter numbers not reflected in this table provide ancillary information, not specifically required by AB117 but useful to the CCE during its initial planning efforts as well as the CPUC while completing its document review. For example, Chapter 5 addresses Program Phase-In; Chapter 6 addresses MCE’s Load Forecast and Resource Plan. The organization of SCP’s 2013 (initial) iPlan was identical and substantially based on the MCE template.

Implementation Plan Examples• CPUC-Certified implementation plans have been submitted by the following CCE programs:• Marin Clean Energy (MCE)• Sonoma Clean Power (SCP)• Lancaster Choice Energy• CleanPowerSF

• PCE’s Plan preparation would be expedited by utilizing a previously certified document template – this is PCE’s intended approach• Template use may also expedite document review/certification

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Implementation Plan – Key PCE Decisions• Before PCE’s Implementation Plan can be submitted to the

CPUC, the following items must be decided upon and reflected in the Plan:• Initial JPA Membership: which communities are “in”?• General description of PCE service offerings: default product, voluntary

green pricing option(s), and others, if applicable• General description of PCE’s rate/pricing strategy: will PCE generally match

PG&E’s then effective schedule of customer rates or will there be substantial, noteworthy differences?

• Identification of customer programs: NEM, FIT, EE and others, if applicable• Customer enrollment: PCE must articulate its general plan for customer

enrollment (phases, schedule, targeted customer groups)• Description of PCE’s organizational structure

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Topic MCE’s Approach SCP’s ApproachProcess of aggregation

Per law, automatic enrollment w/opt-out notices – timing of opt-out notice distribution discussed for first phase (March 2010); description of process leading to CCE formation and launch also discussed (Chapter 2)

Per law, automatic enrollment w/opt-out notices – timing of opt-out notice distribution discussed for first phase (February 2014); description of process leading to CCE formation and launch also discussed (Chapter 2)

Organizational structure and operations

Description of organization, governance, leadership, staff; roles/responsibilities described for each organizational element; General Manager to operate program under direction from Board; use of committees contemplated on an as-needed basis; formation of Energy Commission contemplated – this Commission has not been created by MCE; brief overview of JPA agreement and primary supply agreement included; identification of initial staffing requirements provided in tabular form (Chapter 3)

Description of organization, governance, leadership, staff; roles/responsibilities described for each organizational element; Chief Executive Officer to operate program under direction from Board; specific identification of Business Operations Committee and Ratepayer Advisory Committee; major operating functions to be managed by CEO are described, including resource planning, finance and rates, etc. (Chapter 3)

Startup plan and funding

Identification of staffing requirements and responsibilities during start-up, near-term and long-term operations (in tabular form); identification of capital requirements, startup activities and related cost summary for first 12 months in which costs will be incurred (Chapter 4); additional detail in Chapter 7

Identification of startup activities and capital requirements; indication that initial capital requirements will be addressed via bank credit facility with cost recovery to occur through SCP rates (Chapter 4); additional detail in Chapter 7

Phasing Three phases described, including customer composition and timing; flexibility preserved based on Board discretion; assumed account totals and sales volumes disclosed for each phase (Chapter 5)

Three phases described, including customer composition and timing; flexibility preserved based on Board discretion; assumed account totals and sales volumes disclosed for each phase (Chapter 5)

Key Plan Detail: MCE and SCP Examples

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Topic MCE’s Approach SCP’s ApproachLoad forecast and resource plan

Ten-year resource plan described: initial commitment to a minimum 25% renewable energy content; mid-term goal of 60% renewable by 2015; long-term (aspirational) goal of 100% renewable energy supply articulated; plans to support 12 MW of new distributed solar also identified; other supply and programmatic goals described in general terms: commitment to offering 100% green option; goal of 17% GHG reductions within Marin Communities; energy efficiency; demand response; intention to utilize long-term purchase agreements and, potentially, direct resource investment (Chapter 6)

Key SCP resource planning policies described: increased use of renewables and reduced reliance on fossil fuels; creation of economic benefits through local investment and program administration; resource diversity; cost control, rate competitiveness and stability; and overall cost reductions through efficiency enhancements and demand reduction programs; initial commitment to a minimum 33% renewable energy content; 50% renewable content by 2018; use of local resources to the greatest extent possible; availability of 100% green option; quantified load reduction (1-2% annually) through energy efficiency and demand response (Chapter 6)

Rate setting objectives

General: revenue sufficiency, stability, equity, competitiveness, similarity to PG&E options and support for NEM, FIT and green pricing; goal for Light Green rates to be equivalent to similar rates offered by PG&E (Chapter 8)

General: revenue sufficiency, stability, equity, competitiveness, similarity to PG&E options and support for NEM, FIT and green pricing; goal for standard tariff (default service option) rates to be equivalent to similar rates offered by PG&E (Chapter 8)

Customer rights Restatement of opt-out process; identification of termination fees for customers choosing to leave after first two months of service – Administrative Fee (fixed: $5 to $25) plus Cost Responsibility Charge (variable – note that CRC has always been zero); protection of confidential data (Chapter 9)

Restatement of opt-out process; identification of termination fees for customers choosing to leave after first two months of service – fixed fee ($5 for residential; $25 for non-residential), no ongoing exit fees; protection of confidential data (Chapter 9)

Procurement Description of RFP process and short-listed suppliers (3) (Chapter 10)

Description of RFP process and short-listed suppliers (4) (Chapter 10)

Key Plan Detail: MCE and SCP Examples (cont.)

Key PCE Decisions: Detail• Retails Service Options• Define PCE’s default service offering (ex: minimum 50%

renewable)• Define any voluntary service offering(s) (ex: 100% Green option)• Offering(s) should be characterized in a way that will ensure PCE

satisfies its objectives w/out compromising program launch; “pushing the needle” to high may result in unachievable outcomes if markets change

• For example, MCE’s iPlan (2010) noted minimum 25% renewable content at launch; SCP iPlan (2013) noted minimum 33% renewable content at launch

• Both MCE and SCP specified 100% renewable tariff and NEM availability

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Key PCE Decisions: Detail (continued)• Rate Setting• Define PCE’s key rate setting principle(s):• Example 1: PCE’s rates for the default service option shall be at

or below similar rates charged by PG&E at the time of program launch; and

• Example 2: PCE’s available rate options/structures shall generally resemble rate options offered by PG&E (i.e., a customer currently served under PG&E’s E-1 rate option will remain on a similarly structured rate option following the transition to PCE service)

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Key PCE Decisions: Detail (continued)• Rate Setting• Key rate principles should be clear, realistic, supportive of PCE’s

objectives but should also incorporate a reasonable amount of flexibility (in consideration of prospective market changes)• Example: a rate policy specifying that PCE rates will always remain 5%

below similar rates of the incumbent utility may compromise future program viability under certain market conditions

• PCE will offer the cleanest possible power supply while promoting rate competitiveness with PG&E

• CARE, FERA and Medical Baseline programs will remain available to PCE customers (with discounts applied via T&D rate adjustments)

• Both MCE and SCP expressed a goal that default service rates would be generally equivalent (and possibly lower) than the comparable rate offered by PG&E

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Key PCE Decisions: Detail (continued)• Complementary Energy Programs• Identification of anticipated programs: energy efficiency, net energy

metering and feed-in tariff; any others?• General characterization of program impacts to PCE operations: load

reduction, participatory limitations, etc.• Per Code, specific details of such programs are not required to be

reflected in the plan – programmatic details can be described in specific tariffs, terms and conditions, etc.

• Both MCE and SCP indicated:• That a NEM service option would be available for participating customers• That energy efficiency and demand reduction programs would be pursued,

including projected load reductions associated with such programs• That local, distributed renewable resources would be supported through

programs/tariffs of the aggregation program

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Key PCE Decisions: Detail (continued)• Program Phase-In• What is PCE’s financial capacity to support program launch: capital

+ credit• Other key phase-in considerations: 1) size (energy and customer

count); 2) geographic representation; and 3) customer groups• Will PCE’s phase-in strategy be designed to promote overall financial

performance, diverse customer inclusion and geographic representation… other considerations?

• Certain phase-in strategies may yield improved early-state financial performance at the expense of broad customer representation

• Both MCE and SCP identified three-phase implementation approaches with Board discretion to adjust phase-in options subject to various considerations (market pricing, availability of supply, etc.)

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Key PCE Decisions: Detail (continued)• PCE Organization• Initial staffing• Identification of responsibilities• Outsourced functions/roles• MCE and SCP identified the following details:• General Manager/CEO would be appointed to oversee operations of the

aggregation program• Staff and contractors would be engaged to support the GM/CEO in administering

program operations• Committees could be formed to support specific areas of interest and decisions• SCP specified creation of Business Operations Committee and Ratepayer

Advisory Committee• MCE retained discretion related to committee formation but noted that an

Energy Commission might be formed (though this has yet to be done)

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Key PCE Decisions: Detail (continued)• Identification of prospective Energy Services Provider(s)• Supplier selection won’t likely occur in advance of Plan submittal• Description of RFP process and short-listed respondents should

satisfy requirements of the Code (while ongoing negotiations and final supplier selection occurs)

• MCE and SCP both generally described the solicitation/selection process that was utilized to identify qualified energy services providers• Identification of short-listed suppliers was included in the iPlan• High-level detail regarding supplier qualifications and financial

standing (credit rating) was also included

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Key PCE Decisions: Detail (continued)• Pro Forma• Definition of key inputs: membership, resource mix and

financing requirements• Run operating projections (in consideration of initial program

operations) for inclusion in Plan• Both MCE and SCP provided pro forma financial projections in

consideration of anticipated customer enrollment, operational expenditures, resource mix and other factors (Chapter 7 of iPlan)

• MCE and SCP also provided a summary of anticipated financing requirements during early-stage operations; each program also indicated the possibility of longer-term financing needs associated with direct project investment

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Questions & Discussion

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