Countywide Community Choice Aggregation Task Force Meeting

1. Countywide Community Choice Aggregation Task Force Meeting Upper San Gabriel Valley Municipal Water District Office 602 E. Huntington Dr., Monrovia, CA 91016 GoToMeeting: https://global.gotomeeting.com/join/697828077 Dial in: (872) 240-3412; Access Code: 697-828-077

2. Agenda • Welcome, Introductions, and County Updates (LA County) • Technical Report Status and Presentation (EES Consulting) • High Level Schedule/Key Activities (BKi) • Regulatory Updates (Community Choice Partners) • South Bay Clean Power Task Force Update • General Questions and Answers

3. County Updates

4. LA County CCA Study Update and Current Status

5. Agenda • Scope of CCA Business Plan • Schedule • Current Status • Benefits of County-Wide CCA • Questions

6. Scope of Business Plan • Task 1: Develop 20-Year Budget • Develop Customer and Energy Usage Forecasts • County facilities • Un-incorporated County • By City • Estimate Power Supply Costs • Identify power supply sources & resource mix • Forecast market and resource pricing • Forecast Transmission (CAISO) pricing\ • Determine Non-Power Supply Operations Costs • Start-up costs • Administration costs (Data management, marketing, legal, regulatory, etc.)

7. Scope of Study (cont’d) • Task 2: Feasibility Study • Identify Financing Options • Develop Rate Forecasts • Project SCE generation rates and Power Cost Indifference Adjustment (PICA) charge • Forecast CCA all-in rates • Perform Sensitivity Analysis • Determine Economic Development Impact • Number of local jobs • Additional local economic activity • Cash Flow Analysis

8. Implementation Plan • CPUC Filing • Organization Structure, Operations & Funding • Rate Setting • Output of Business Plan • Contractual Arrangements • Disclosure, due process, entering & terminating contracts, • Customer protection, credit provisions & shut-off procedures • Termination procedure • Power Supply Provider Information • Governance • Start-Up Plan • Financing

9. Schedule for the CCA Business Plan

10. Current Status – Customer and Load Totals: 1,359,122 Customers 2,628 aMW

11. Current Status – Customer and Load Energy Usage Distribution - Rate Class

12. Current Status – Customer and Load Customer Distribution - Rate Class

13. Current Status – Customer and Load LA County Service Area • 4,000 Square Miles • Population: 9.5 million • 88 Incorporated Cities • Unincorporated Areas • Over 2,600 square miles • 2/3 of LA County land • 1/10th of LA County population

14. Current Status – Customer and Load Hourly Load Shape All Current Data

15. Customer Distribution Incorporated Cities Unincorporated 349,000 CARE Customers 8% 13% 91% 7,100 Direct Access Customers 86%

16. Customer Distribution Municipal Buildings 24% 10% 30% of Domestic Accounts are CARE 54%

17. Load – Resource Development Energy Consumption Line Losses Hourly Data Power Supply

18. Load – Resource Growth DSM Energy Renewable Local Market/Other County Buildings Unincorporated Areas Cities

19. SCE’s Resource Mix

20. Current Status - Costs • Developing forecast of non-power supply costs based on experience of other CCA’s and municipal utilities • Costs are scalable and dependent on ramping strategy

21. Benefit of County Wide CCA • Benefit of Scale • Lower administrative costs per unit sales • Efficiency • Program design (energy and renewable resources consistency) • More entities want to do business with you – easier contracting • Back-office support for all Communities • Still Retain Local Control • Local front-office • Energy Efficiency program offerings • Local resources • Community focused approach to interacting with customers • Local elected officials on CCA Board

22. Local Economic Benefits • Local Investment • Investment in local resources would allow for investment dollars to remain in local economy creating local jobs and improving local economy • Analysis will include modeling of this impact: • The Jobs and Economic Development Impact (JEDI) Photovoltaics (PV) model is a tool that estimates the economic impacts of constructing and operating photovoltaic power generation at the local and state levels. • IMPLAN is a tool used to estimate the general local and state economic and job impact from a change in economic investment • Lower Investment Costs • Due to Public Financing • Lower power rates to customers which could then be used in the local economy for local projects and labor

23. Questions

24. High Level Schedule/Key Activities

25. County of Los Angeles CCA TASK FORCE Samuel Golding President 24 February 2016

26. December Task Force Recap • Ambitious statewide goals: ~$125B+ in related investments (btw 2016-2030) & Integrated Resource Planning • LA CCA at full enrollment = ~40% of SCE load (estimated) • Regulations not designed for such a large-scale public power transition; engagement required to: • Transition all power planning responsibilities from SCE  CCA • Gain cost recovery authority for necessary investments • Formalize role of CCAs as distributed energy integrator/ operator • Requires “CCA 2.0” program design (capabilities match SCE) • Full wholesale self management • Platform for accelerating distributed energy resources • Virtual power plant capabilities (integrate DER into 24/7 operations) • Integrated Resource Planning

27. Provider of Last Resort • In any restructured market (i.e. where customers may receive electricity commodity service from an entity that is not the distribution utility), there is a “provider of last resort” (POLR). • POLR is responsible for ensuring that there is sufficient generation capacity to serve any and all customers. • In California, the current POLRs are the IOUs. • The primary function of the POLR is to ensure system reliability as customers switch back and forth between load serving entities, either on an individual basis or in the event that a CCA or a power marketer ceases operations for any reason or otherwise exits the market – thereby defaulting a significant customer base back to basic service.

28. Cost Allocation Mechanism (CAM) • Established in 2005 to recover costs from resources required to meet resource adequacy (i.e. grid stability) requirements. • CAM recovers costs only from the capacity payments of an eligible generating facility. The capacity share is calculated as the difference between the cost of the facility and revenues from power sold. • Cost recovery is guaranteed for the duration of the contract. • Charged directly to CCA customers (like PCIA). • RA procurement requirements of CCAs are offset by the portion of the capacity paid for by their customers via CAM charges. • Effectively requires IOUs to make long-term procurement decisions on behalf of CCA customers.

29. Non-Bypassable Charges (NBCs)

30. Power Charge Indifference Adjustment (PCIA)

31. March 8th PCIA Workshop • Exactly how is the PCIA calculated? • Confidentiality issue: should CCAs have expanded access to IOU data behind the calculations? • Do any components of the PCIA need to be revised currently? • With “large” CCAs like LA, or in the context of 2/3 of IOU load departing to CCA service: can the PCIA be “fixed” or is an alternate structure needed? • Mathematical issue: PCIA is a forecast of portfolio costs minus a forecast of market prices; • All forecasts are subject to inaccuracy – the PCIA is complex and has numerous assumptions; • At this volume of departing load, the cost impact of any inaccuracy will introduce instability. • Structural issue: CCAs will need to purchase power and dispatch facilities currently owned by or under contract with the IOUs. • LA County filing recommends a solutions commensurate to the problem: “The issues summarized herein recognize that the CCA industry is fundamentally changing the structure of the power industry in California. We propose that a process be established to transfer contracts, PCIA and CAM (Cost Allocation Mechanism) cost recovery authorities, and Provider of Last Resort (POLR) responsibilities in operations and planning activities from the IOUs to CCAs… The County of Los Angeles … recommends that a separate proceeding be established to ensure that a solution commensurate to this challenge be implemented in a timely fashion.”

32. Discussions on CCA NBCs/ POLR • July 2014: Marin Energy Authority Revised Implementation Plan notes potential use of CCA “Cost Recovery Charge” (exit fee for customers departing CCA service). • September 2014: CPUC staff whitepaper speculates CCAs could gain CAM authority, given closer engagement with CPUC planning processes. • December 2014: PG&E Long Term Procurement Plan filing excerpt: The Commission and California policy makers should consider how to ensure that all LSEs are prepared to reliably service their load on a long-term basis, and that there is appropriate compensation and cost recovery for entities that act as a provider of last resort.” MCE agreed “CCA development had affected the provider of last resort landscape”, but CPUC ruled this was outside the scope of the LTPP. • September 2015: SB 350 imposes long-term contracting and IRP requirements on CCAs; open questions re: NBCs for CCAs TBD by CPUC.

33. Questions and Input Samuel Golding President Community Choice Partners, Inc. golding@communitychoicepartners.com 415.404.5283 33

34. CommunityChoicePower A Community Based Energy Program to Add Renewable Power, Provide Consumer Choice, and Boost Our Local Economies L.A. County CCA Task Force Meeting, FEBRUARY 24, 2016

35. South Bay Clean Power MissionStatement The South Bay Clean Power program is being created to: • Fastest path to 100% renewable power - goal of 10 years • No use of Category 3 unbundled Renewable Energy Certificates (RECs) • Distributed Generation with a County-wide buildout of new renewable energy infrastructure • Local investment, local power generation, local jobs, local career opportunities • Partnership with labor - project labor agreements, community benefit agreements, sustainable workforce agreements, job training, apprenticeship • Focus on environmental justice in frontline communities where needs are the greatest

36. South Bay Clean Power ResolutionsPassed Resolution to Participate in a CCA Feasibility Study • Hermosa Beach - September 9, 2014 • Manhattan Beach - October 21, 2014 • Santa Monica - January 13, 2015 • Redondo Beach - January 20 , 2015 • Torrance - January 28, 2015 • Carson - February 3, 2015 • Beverly Hills - April 21, 2015 • Palos Verdes Estates - April 28, 2015 • Lomita - June 10, 2015 • West Hollywood, August 3, 2015 • Malibu, September 16, 2015 • Rolling Hills Estates, September 22, 2015 • Culver City, September 28, 2015 All unanimousvotes

37. Gmail-SouthBayCleanPowersupportforLACountyCCA 1/22/16, 4:14PM Joe Galliani <joegalliani@gmail.com> South Bay Clean Power support for LA County CCA 12 messages Howard Choy <HChoy@isd.lacounty.gov> To: Steve Culbertson <sculbertson@bki.com> Cc: Joe Galliani <joe@southbaycleanpower.org> Tue, Nov 10, 2015 at 2:59PM Steve, Joe, (sorry, Ken Smokaska's email doesn't auto load on my email)- Let's set a time Monday or Tuesday next week to discuss a more formal role for South Bay Clean Power in assisting the LA County CCA effort in the following areas: • mobilizing and consolidating organized labor support • organizing support among academia (USC, UCLA, etc) • coordinating support among local NGOs • assisting with developing a labor plan which shows the positive jobs creation benefits of an LA County CCA I'm available Monday afternoon and most of Tuesday next week. Steve Culbertson <sculbertson@bki.com> To: Howard Choy <HChoy@isd.lacounty.gov> Cc: Joe Galliani <joe@southbaycleanpower.org> Tue, Nov 10, 2015 at 3:03PM I can move things around to be available any time that works for thegroup. Steven Culbertson | Principal |BKi D 213 213 1960 Ext 105 | M 626 488 3698 |sculbertson@bki.com 523 W Sixth Street, Suite 1128, Los Angeles, CA 90014 | www.bki.com https://mail.google.com/mail/u/0/?ui=2&ik=0c62ddf0f6&view=pt&q=h…ml=150fcc5f3ab2a96c&siml=150fd46c4aaa663f&siml=15138793e8b7aa07 Page 1 of8

38. South Bay Clean Power • Working Group Advisory Committees • We formed our South Bay Clean Power Working Group Advisory Committees in response to the November 10, 2015 request from Howard Choy, Internal Services Department for assistance on LA County’s CCA effort in these areas: • Mobilizing and consolidating organized labor support • Organizing support among academia (USC, UCLA, etc) • Coordinating support among local NGOs • Assisting with developing a labor plan which shows the positive jobs creation benefits of an LA County CCA • Modeled after best practices of other County’s CCA efforts throughout the state of California, each of our Advisory Committees is comprised of City Council members and City staff members from among our participating SBCP initiative cities; staff members of County Supervisors, representatives of organized labor, and the Labor Management Cooperating Committee, subject matter experts from academia including UCLA and USC, renewable power industry professionals, business leaders, community organizations and groups, and leaders of key NGOs. Most of our committee members have been members of the South Bay Clean Power Working Group which began meeting in June of 2014. Additional Advisory Committee members are being actively recruited. • Our Advisory Committee members are each volunteering their time and have each agreed to perform the research and review of their subject area and provide recommendations for both the South Bay Clean Power CCA and a Countywide CCA for Los Angeles County. • An on-line “Learning Tree” available to all Advisory Committee members has been populated with key reports, white papers, research studies and documentation from the development and implementation of all other California CCA operations and initiatives. SBCP’s participation on the two California statewide CCA coalitions, Californians for Clean Energy and Californians for Energy Choice, as well as our membership in the Local Energy Aggregation Network is providing our Committee members with the latest developments throughout the state as well as related data. • In tandem with Internal Services Department’s delivery of its “Feasibility Study” and “Design and Implementation Plan” (both scheduled for delivery in April 2016) each of our Advisory Committees will issue an Executive Report with their recommendations and proposed direction for Program Elements and Design, Economic and Workforce Development, Governance and Technical and Public Outreach for both a South Bay Clean Power CCA and a Countywide CCA. South Bay CleanPower Report to LACBOS on AdvisoryCommittees February 3,2016

39. Program Elements & Design Advisory Committee • Research, review and recommend the program elements most important to the South Bay/Westside Cities. Will those include - Feed In Tariffs? EV Charger incentives? Battery Storage incentives? Investment in local infrastructure? • Microgrids? Which development costs will be reimbursed from the program revenue? What programs will be available for low and fixed income customers? What are other CCAs and those in development doing? Is there a logical order to program element priorities and rollout order? What are the goals and targets for RPS and renewable power generation? Is it possible to build a cost competitive program without using any Category 3 Renewable Energy Certificates (RECs)? • How do our California State Policy goals for renewable use, emission reductions, energy storage, energy efficiency and air quality - to name a few - impact/benefit our CCA design? • Program Elements and Design Advisory Committee Members • Redondo Beach Councilman Christian Horvath • Culver City Councilwoman, Meghan Sahli-Wells • Malibu City Councilman, Skylar Peak • David Haake, Vice Chair of the Sierra Club Angeles Chapter Executive Committee • Katy Young, Deputy, Supervisor Shiela Kuehl's office • Dean Kubani, Director of City of Santa Monica's Office of Sustainability and the Environment • Jim Montgomery, Torrance Environmental Commission • Domenica Megerdichian, Management Associate – City of Torrance Office of the City Manager • Sona Coffee, Manhattan Beach Environmental Programs Manager • Michelle Kinman Clean Energy Advocate, Environment California • Alex Turek Research Manager, UCLA Luskin Center for Innovation • Chad Tady Sales Manager - Distributed Generation at SunEdison • Robert Freehling, Energy Policy Consultant to SBCP South Bay CleanPower Report to LACBOS on AdvisoryCommittees February 3,2016

40. Economic & Workforce Development Advisory Committee - Research, review and economic and workforce development opportunities possible with a South Bay Clean Power CCA and a Countywide CCA based on a Distributed Generation model with a renewable energy infrastructure buildout coupled with a reimagined and revitalized energy efficiency effort. Work with representatives of Los Angeles Chapter of the National Electrical Contractors Association (NECA), the International Brotherhood of Electrical Workers (IBEW) 11, as well as other related labor and workforce development organizations, including Emerald Cities, to maximize local job creation, job training, apprenticeship programs, and environmental justice benefits in the participating communities and throughout the County. Partner with labor to ensure that local jobs and job training/ apprenticeship programs, project labor agreements and community benefit agreements are part of the design and implementation plans of the SBCP CCA and any Countywide CCA. • Labor Relations Committee • Matt Skolnik, Deputy, Supervisor Don Knabe's staff • Lula Davis-Holmes, Councilwoman City of Carson • Dency Nelson Western AD/SM/PA Council member, DGA union, Hermosa Beach resident • Joe Sullivan, the Director of Energy Solutions with IBEW/NECA/LMCC • Tommy Faave, IBEW 11 Organizer • David Kong, USC Price School of Public Policy • Cris Gutierrez, Climate Action Santa Monica • Joe Galliani, Founding Organizer, South Bay 350 Climate Action Group • Ken Smokosa, Sierra Club CCA Advocate & Labor Liaison South Bay CleanPower Report to LACBOS on AdvisoryCommittees February 3,2016

41. Governance & Technical Advisory Committee - Research and review how the JPA is formed and what is the process? Make recommendations on: how the JPA would best operate for a SBCP CCA; how each participating city is represented; how one regional LA County CCA such as ours, might interact with other regional CCAs; how a CCA entity operates; who regulates a CCA, how the initial plans are made. What development costs of the CCA will be reimbursed from program revenue? How will community oversight be assured and what form will it take? • How big is too big - is there a cap on how many cities/customers/ratepayers our JPA should have? Do cities that join the JPA after the program elements and design have been determined need to endorse and embrace those program aspects? • Governance and Technical Committee • Rolling Hills Estates Councilwoman, SCAQMD Board member, CARB Board member, Judy Mitchell • Torrance City Councilman, Tim Goodrich • Rolling Hills Estates Councilwoman, Britt Huff, • Ravi Sankaran Senior Director, Power Origination at SunEdison • Manhattan Beach City Manager, Mark Danaj • Caitlin Sims, Senior Management Analyst, Public Works Services, City of Beverly Hills • Craig George, City of Malibu Environmental Sustainability Manager & Deputy Building Official • Rob Osborne, Redondo Beach Public Works, Senior Management Analyst • Robert Freehling, Energy Policy Consultant to SBCP South Bay CleanPower Report to LACBOS on AdvisoryCommittees February 3,2016

42. Public Outreach Advisory Committee- Research, review and adapt/repurpose the best materials already available from Marin Clean Energy, Sonoma Clean Power, Lancaster Choice Energy, Peninsula Clean Power, CleanPowerSF, and CCA efforts in Alameda County, San Diego and elsewhere across the state. • Develop SBCP and LA County centric materials necessary to inform, educate and interest our audience about the potential for South Bay Clean Power and LA County Clean Power. Determine best audiences of citizens and stakeholders in the 20 SBCP Target Cities, as well as City staff and electeds in those same cities. Survey the community to determine interest and program elements critical to ratepayers. Work with Angeles Chapter Sierra Club, Pando Populous, Environment California and other endorsing and supporting organizations to reach their audiences. • Public Outreach Committee • Diane Moss Co-Founder, 100% Renewables Policy Institute • Craig Cadwallader, South Bay Chapter Chair, Surfrider Foundation • Connie Sullivan, Palos Verdes Estates, President Emeritus PV Dem Club • Diane Thomas Co-Founder, the Carson Connection • Katharine King, Climate Action Santa Monica • Eugene Shirley, Co-Founder, Pando Populus • Walker Foley of West Hollywood and Food & Water Watch • Evan Gillespie, Western Region Deputy Director, Beyond Coal Campaign at Sierra Club • Sofia Ratcovich Outreach Coordinator, GRID Alternatives • Chris Conaway, Manhattan Beach Planning Commission • Diane Wallace, retired School Administrator, President Manhattan Village HOA South Bay CleanPower Report to LACBOS on AdvisoryCommittees February 3,2016

43. Questions and Answers