1. Kirsten Pringle, Office of Sustainability Gordon Tong, Office of Sustainability Community Choice Energy A Local Energy Model to Green the Grid, Provide Customer Choice and Boost Local Economies 10/28/15 Community Workshop

2. Agenda Welcome; Opening Remarks What is Community Choice Energy? Peninsula Clean Energy—CCE in San Mateo County Community Input Conclusion

3. What is Community Choice Energy?

4. The Electricity Grid o California residents and businesses receive their power from a networked grid: Western U.S. + parts of Canada and Mexico. o Physically, all electricity is the same – the energy received by customers is determined by power flows rather than contract rights. o A utility’s power mix is determined by the amount of electricity injected into the grid from generation resources it owns or controls (under contract).

5. Did you know… o What percentage of CA’s energy is produced in- state? o What percentage of CA’s generating capacity uses renewable fuel sources? o What percentage of CA’s generating capacity is natural gas? 70% 20% 58%

6. Background CCE Authorized by CA Assembly Bill 117 in 2002 CCE allows communities to pool their electricity demand in order to purchase and potentially develop power on behalf of local residents, businesses, and municipal facilities. CCEs in 6 States California Illinois Massachusetts New Jersey Ohio Rhode Island New York Under Consideration Utah, Delaware, Minnesota

7. How Does It Work? CCE leverages the market power of group purchasing and local control. CCE allows communities to pool their electricity demand in order to purchase and potentially develop power on behalf of local residents, businesses, and municipal facilities.

8. Why is CCE So Powerful? Local, community control over electricity Offers consumers a choice where none currently exists Stable, often cheaper, electricity rates; Rate-payer subsidized, NOT taxpayer Cleaner power supply Reduced air pollution Provides funding source for energy efficiency and innovative energy programs like energy storage and electric vehicle (EV) charging stations

9. Basic Program Features Utility (PG&E) continues to provide consolidated billing, customer service, line maintenance CCE electric generation charges appear as a new section of customer bill; all other charges are the same CCE becomes default electric provider. Customers receive a minimum 4 opt-out notices over 120 days and can return to PG&E service any time. Joint Powers Agency: Local governments participate by passing an ordinance

10. Sample Energy Bill – Marin Clean Energy Page 1 Page 2

11. Case Study – Marin Clean Energy May 2010: service starts for Phase I customers Service area includes Marin County, unincorporated Napa County, and the cities of Benicia, El Cerrito, Richmond and San Pablo 17-Member Board of Directors 177 MW new renewable energy in development for MCE customers, including 20 MW of local solar (enough clean power for 85,000 homes) 131 million pounds of GHG reductions to date (2010-2013 reporting periods) 1,800 jobs created/supported by MCE; most in construction sector May 2010: service starts for Phase I customers Service area includes Marin County, unincorporated Napa County, and the cities of Benicia, El Cerrito, Richmond and San Pablo 17-Member Board of Directors 177 MW new renewable energy in development for MCE customers, including 20 MW of local solar (enough clean power for 85,000 homes) 131 million pounds of GHG reductions to date (2010-2013 reporting periods) 1,800 jobs created/supported by MCE; most in construction sector

12. 2015 MCE Residential Cost Comparison Delivery rates stay the same Generation rates vary by service option PG&E adds exit fees on CCA customer bills Even with exit fees, total cost for Light Green is less than PG&E PG&E 22% MCE Light Green 50% MCE Deep Green 100% MCE Local Solar 100% Delivery$44.37 Generation$49.50$40.13$45.21$72.14 PG&E Fees-$6.27 Total Cost$93.87$90.77$95.85$122.78 508 kWh E-1/Res-1

13. 2015 MCE Commercial Cost Comparison Delivery rates stay the same Generation rates vary by service option PG&E adds exit fees on CCA customer bills Even with exit fees, total cost for Light Green and Dark Green is less than PG&E PG&E 22% MCE Light Green 50% MCE Deep Green 100% MCE Local Solar 100% Delivery$154.70 Generation$142.54$111.00$125.05$199.51 PG&E Fees-$15.45 Total Cost$297.24$281.15$295.20$369.66 1,405 kWh A-1/Com-1

14. 14 Sonoma Clean Power May/December 2014: service starts for 22,000 commercial customers; December roll out to 140,000 residential customers SCP has 11% opt out rate so far, and projects about 15% over time. SCP customers are saving $6M in first year of program 100% renewable product sourced from Calpine/local geo- thermal plant 70MWs plus 12.5 MW new solar project with County water agency for solar on floating docks in irrigation holding pond

15. 2015 Residential Cost Comparison

16. 2015 Commercial Cost Comparison

17. CCE: What are the Risks Rate Competition/Market Fluctuation PG&E rate uncertainty Exit fee fluctuation Length of current wholesale energy price trough Customer Opt-Out Political Overall program size given participation of certain jurisdictions Regulatory/Legislative Future CCE specific legislation Regulatory changes around renewable and capacity mandates

18. FAQs Will my electricity service be altered? Will I be treated differently if I have an issue with my power supply and I am a CCE customer? I have solar panels on my house, how will this program affect me? What about programs for low-income individuals? Will I still have access to PG&E’s energy efficiency programs? Why is CCE an “opt-out” program? Why do people choose to opt out?

19. Peninsula Clean Energy: CCE in San Mateo County

20. Why CCE in San Mateo County? San Mateo County fosters a culture of innovation, environmental health and clean technology Became aware of Marin and Sonoma’s positive results County and its cities have aggressive Climate Action goals Intrigued by consumer and local economic benefits Local advocacy groups supporting the effort; feedback from public and business community has been positive Potentially a very good fit for San Mateo County and Cities

21. CCE in San Mateo County Led by County; All 20 cities participated in technical study Community & stakeholder engagement: Stakeholder database, e- notifications, website, educational workshops, 1:1 briefings and community events Monthly Advisory Committee meetings – Open to public Return to Board of Supervisors in October/November for study results, Phase II funding, and CCE ordinance Form JPA in March 2016; Start serving customers in Fall 2016

22. Overview of PCE Formation Timeline Peninsula Clean Energy could launch a CCE by Fall 2016. January 2015 - October 2015October 2015 – February 2016March 2016 – August 2016 Pre-Planning & Due DiligenceCommunity Outreach; CCE Planning & Development Preparing for Launch Internal planning team Initial outreach to cities and key stakeholders Workshops & education CCE technical study Formation of CCE advisory committee CCE Program design, JPA formation Public outreach Local ordinances Implementation Plan RFP for Energy Services JPA staffing/working capital Energy supply and other service contracts Utility Service Agreement Regulatory registrations Call Center & Customer Enrollment Phase 1 Phase 2 Phase 3

23. Technical Study Results

24. CCE Technical Study Overall size of the program (megawatt hours and peak demand levels) Forecasted demand into the future Resource availability and other compliance issues Ability to be rate competitive Development of different power supply scenarios and their impact on GHGs, jobs created, etc. Robust risk analysis

25. PCE Load Composition Energy Use by Customer Classification

26. Supply Portfolio Scenarios Identification of Planning Priorities – Tradeoffs are inherent in CCE program development – Generally, “program enhancements” will increase costs/rates, etc. Costs/Rates Renewable Energy Complementary Programs GHG Emissions Reductions Administrative Complexity Expertise/Staff

27. Take a guess… What is the difference between “renewable energy” and “greenhouse gas free” energy?

28. Supply Portfolio Scenarios Current Electric Resource Mix: 2014 Energy Resources2014 PG&E Power Mix 1 2014 California Power Mix 2 Eligible Renewable27%20% --Biomass & Waste5%3% --Geothermal5%4% --Small Hydroelectric1% --Solar9%4% --Wind7%8% Coal0%6% Large Hydroelectric8%6% Natural Gas24%45% Nuclear21%9% Unspecified Sources of Power21%14% Total 3 100%

29. Supply Portfolio Scenarios  Unbundled renewable energy certificates excluded from all scenarios  Nuclear- and coal-based energy also excluded from all scenarios Scenario 1: Baseline, minimum 35% renewable energy content scaling up to 50% by 2030 Scenario 2: Minimum 50% renewable energy content scaling up to 75% by 2030; reduced overall GHG emissions relative to PG&E projections  Large hydro resources to be used for non-renewable, GHG-free supply Scenario 3: 100% renewable energy content with significant GHG emissions reductions

30. Summary of Scenario Results: Year 1 Key ConsiderationsScenario 1Scenario 2Scenario 3 General Environmental Benefits35% Renewable 35% GHG-Free 50% Renewable 63% GHG-Free 100% Renewable 100% GHG-Free Rate CompetitivenessAverage 6% savings relative to PG&E rate projections Average 4% savings relative to PG&E rate projections Average 2% increase relative to PG&E rate projections Projected Residential Customer Cost Impacts 1 1 Average monthly usage for PCE residential customers ≈ 450 kWh Average $5.40 monthly cost savings relative to PG&E rate projections Average $4.05 monthly cost savings relative to PG&E rate projections Average $1.80 monthly cost increase relative to PG&E rate projections Assumed PCE Participation85% customer participation rate assumed across all customer groups 75% customer participation rate assumed for residential and small commercial customers; 50% for all other groups Comparative GHG Emissions Impacts0.278 metric tons CO2/MWh emissions rate; additional GHG emissions of ≈211,000 metric tons in Year 1 0.115 metric tons CO2/MWh emissions rate; ≈75,000 metric ton GHG emissions reduction in Year 1 Zero emissions rate; ≈204,000 metric ton GHG emissions reduction in Year 1

31. Summary of Environmental Impacts: 10-Year Average GHG ImpactScenario 1Scenario 2Scenario 3 Annual Change in GHG Emissions (Tons CO 2 /Year) 476,125-145,036-301,269 Change in Electric Sector CO 2 Emissions in San Mateo County (%) +111%-34%-100% Projected PCE Portfolio Emissions Factor (metric tons/MWh) 0.2680.0860 Projected PG&E Portfolio Emissions Factor (metric tons/MWh) 0.128

32. Risks and Uncertainties Consultants tested the sensitivity of PCE’s electricity rates to the following factors:  Natural gas prices  Renewable energy prices*  Carbon Free energy prices  PG&E generation rates*  PG&E exit fees*  Opt-out rates *Key comparative influences

33. Technical Study Conclusions Scenario 1 highlights CCA program viability on a rate competitive basis Scenario 2 highlights CCA program viability on renewable and carbon-free content basis (w/rate competitiveness) Scenario 3 highlights the CCA rate premium under a 100% renewable option as well as opt-out risk/uncertainty No “correct” answer, but in general terms, the technical study indicates that the Peninsula Clean Energy program could be economically viable while also achieving the County’s environmental objectives

34. Community Input

35. Next Steps for PCE Date GroupTopic(s) 10/28/15Community Workshop – San Mateo 11/02/15City of San Mateo City CouncilCCE Study Session 11/03/15County of San Mateo Board of Supervisors Adoption of CCE Ordinance 11/17/15County of San Mateo Board of Supervisors JPA Resolution 11/21/15Community Workshop – Portola Valley 11/29/15Advisory Committee Nov 2015-Feb 2016 City CouncilsAdoption of CCE Ordinance and JPA Resolution March 2016Peninsula Clean Energy Board of Directors First PCE Board Meeting March 2016-Fall 2016 Peninsula Clean EnergyPreparation to launch – Community outreach, Opt-out notices, Energy contracts, Customer enrollment, etc.

36. Get Engaged Contact your local elected officials/attend council meetings on CCE Stay up to date – Join our mailing list for updates or visit our website Attend monthly Advisory Committee Meetings Spread the word – Talk to your family, neighbors, and friends Give us your input…

37. Let’s Talk About PCE Had you heard about CCE or PCE before this workshop? How do you feel about a CCE program forming in San Mateo County? What concerns do you have? Programs you would like to see incorporated in Peninsula Clean Energy?

38. For More Information Visit us: www.PeninsulaCleanEnergy.comwww.PeninsulaCleanEnergy.com Contact us: sustainability@smcgov.orgsustainability@smcgov.org