HomeMy WebLinkAbout2020-12-10 Agenda Packet (Spcl Mtg)
SPECIAL MEETING AGENDA
City Council
Special Meeting
Thursday, December 10, 2020 at 5:00 PM
MAYOR AND CITY COUNCIL
KIM CARR, Mayor
TITO ORTIZ, Mayor Pro Tem
BARBARA DELGLEIZE, Councilmember
DAN KALMICK, Councilmember
NATALIE MOSER, Councilmember
ERIK PETERSON, Councilmember
MIKE POSEY, Councilmember
Recorded live from the
City Council Chambers
2000 Main Street
Huntington Beach, CA 92648
SPECIAL NOTICE REGARDING COVID-19
STAFF
OLIVER CHI, City Manager
MICHAEL E. GATES, City Attorney
ROBIN ESTANISLAU, City Clerk
ALISA BACKSTROM, City Treasurer
On March 4, 2020, Governor Newsom proclaimed a State of Emergency in California as a result of the threat of COVID-19. On March 17,
2020, Governor Newsom issued Executive Order N-29-20 which allows a local legislative body to hold public meetings via
teleconferencing, and to make public meetings accessible telephonically or otherwise electronically to all members of the public seeking
to observe and to address the local legislative body. Pursuant to Executive Order N-29-20, please be advised that some members of the
Huntington Beach City Council and/or City staff may participate in this meeting telephonically or electronically.
PUBLIC PARTICIPATION/AUDIO/VIDEO ACCESS TO BROADCASTED MEETINGS: Pursuant to Executive N-29-20 and given the
current health concerns, members of the public are encouraged to access the meeting live on-line at
https://huntingtonbeach.legistar.com, or can elect to view the meeting via cable television channel HBTV-3.
The Council Chambers will be not open for in-person attendance to provide public comments. In order to ensure adequate social
distancing, the City will not make a physical location available for the public to observe the meeting or offer public comment in person . To
ensure the public’s right to fully participate in providing meaningful public comments at the December 10, 2020, City Council
meeting:
The public may submit a comment via Zoom Webinar, with the preferred method of entry from a computer device. Zoom applications are
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1
AGENDA December 10, 2020City Council/Public Financing
Authority
5:00 PM – COUNCIL CHAMBERS
CALL TO ORDER SPECIAL MEETING
ROLL CALL
Peterson, Kalmick, Ortiz, Carr, Posey, Moser, Delgleize
ANNOUNCEMENT OF SUPPLEMENTAL COMMUNICATIONS (Received After Agenda Distribution)
PUBLIC COMMENTS (3 Minute Time Limit) - At approximately 5:00 PM, individuals wishing to
provide a comment on agendized or non-agendized items may join the Zoom Webinar by entering
Webinar ID 971 5413 0528, or join by phone by calling (669) 900-6833. Individuals that enter the
meeting will be placed in a holding queue and prompted to speak when the Clerk announces your
name or the last three digits of your phone number. The holding queue will remain open for
approximately 15 minutes, and speakers are encouraged, but not required to identify themselves
by name. Each speaker may have up to 3 minutes to speak, but the Mayor, at her discretion, may
reduce the time allowance if warranted by the volume of speakers.
ADMINISTRATIVE ITEMS
20-2082 Consider joining the Orange County Power Authority (OCPA), a
Community Choice Energy (CCE) Joint Powers Authority (JPA) by
adopting Resolution No. 2020-87, approving for introduction
Ordinance No. 4227 and authoring execution of a Joint Powers
Agreement (JPA)
Provide direction to staff on whether to join the Orange County Power Authority CCE JPA
as a Founding Member.
If the City Council directs to move forward, the staff recommendation would be as follows:
A) Introduce Ordinance No. 4227 for first reading; “An Ordinance of the City Council of
the City of Huntington Beach Authorizing the Implementation of a Community
Choice Aggregation Program;” and,
B) Adopt Resolution No. 2020-87; “A Resolution of the City Council of the City of
Huntington Beach, Approving the Orange County Joint Powers Authority Agreement
and Authorizing the Implementation of a Community Choice Aggregation Program;:
and,
C) Authorize the City Manager to execute the Orange County Power Authority Joint
Recommended Action:
Page 1 of 2
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AGENDA December 10, 2020City Council/Public Financing
Authority
Powers Agreement; and,
D) Appoint from the City Council one Board Member and one Alternate to serve on the
Board of Directors of the Orange County Power Authority on behalf of the City of
Huntington Beach; and,
E) Authorize and direct that staff perform a full financial risk assessment
associated with joining the Orange County Power Authority, and bring those
findings back for City Council consideration by February 1, 2021, to determine if
the City should maintain membership or withdraw from the Orange County Power
Authority before the March 1, 2021, no-risk deadline.
ADJOURNMENT
The next regularly scheduled meeting of the Huntington Beach City Council/Public Financing Authority is
Monday, December 21, 2020, at 4:00 PM in the Civic Center Council Chambers, 2000 Main Street,
Huntington Beach, California.
INTERNET ACCESS TO CITY COUNCIL/PUBLIC FINANCING AUTHORITY AGENDA AND
STAFF REPORT MATERIAL IS AVAILABLE PRIOR TO CITY COUNCIL MEETINGS AT
http://www.huntingtonbeachca.gov
Page 2 of 2
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City of Huntington Beach
File #:20-2082 MEETING DATE:12/10/2020
Consider joining the Orange County Power Authority (OCPA), a Community Choice Energy
(CCE) Joint Powers Authority (JPA) by adopting Resolution No. 2020-87, approving for
introduction Ordinance No. 4227 and authoring execution of a Joint Powers Agreement (JPA)
Provide direction to staff on whether to join the Orange County Power Authority CCE JPA as a
Founding Member.
If the City Council directs to move forward, the staff recommendation would be as follows:
A) Introduce Ordinance No. 4227 for first reading; “An Ordinance of the City Council of the City of
Huntington Beach Authorizing the Implementation of a Community Choice Aggregation
Program;” and,
B) Adopt Resolution No. 2020-87; “A Resolution of the City Council of the City of Huntington
Beach, Approving the Orange County Joint Powers Authority Agreement and Authorizing the
Implementation of a Community Choice Aggregation Program;: and,
C) Authorize the City Manager to execute the Orange County Power Authority Joint Powers
Agreement; and,
D) Appoint from the City Council one Board Member and one Alternate to serve on the Board of
Directors of the Orange County Power Authority on behalf of the City of Huntington Beach;
and,
E) Authorize and direct that staff perform a full financial risk assessment associated with joining
the Orange County Power Authority, and bring those findings back for City Council
consideration by February 1, 2021, to determine if the City should maintain membership or
withdraw from the Orange County Power Authority before the March 1, 2021, no-risk deadline.
City of Huntington Beach Printed on 12/9/2020Page 1 of 1
powered by Legistar™4
Dept. ID CS 20-020-Page 1 of 5
Meeting Date: 11/16/2020
Statement of Issue:
In 2018, the City of Irvine initiated a feasibility study to assess the possibility of
implementing a CCE program for their community. Those efforts evolved over the past two
years, and in 2020, Irvine extended an invitation to all Orange County municipalities, asking
interested parties to consider joining them in forming a CCE JPA, which has since been
named the Orange County Power Authority (OCPA).
Currently, the city of Fullerton has signed on to participate in the OCPA with Irvine. In
addition, the cities of Buena Park and Lake Forest are also expected to sign-on in 2020 to
join the OCPA. Pursuant to the OCPA JPA agreement, there are certain benefits to joining
the group in 2020, including the following:
• Jurisdictions that join the group in 2020 will be considered a Founding Party member
agency.
• Founding Party agencies will automatically be placed on the new JPAs Executive
Committee.
• Those joining the JPA after 2020 will be considered an Additional Party member,
and could be subject to a membership fee upon joining.
Of note, the JPA agreement also provides that any agency joining the group has the right
to withdraw for any reason and without any liability or cost prior to March 1, 2021.
Given these factors, members of the City Council have requested the opportunity to
consider joining the OCPA JPA, thereby opting Huntington Beach into the CCE program as
a Founding Party member.
Financial Impact:
There is no direct fiscal impact from joining the OCPA JPA. Per the JPA agreement,
participating agencies are not required to make any financial contribution. Rather, the City
of Irvine has agreed through the JPA agreement to cover all initial start-up costs associated
CITY OF HUNTINGTON BEACH
REQUEST FOR CITY COUNCIL ACTION
MEETING DATE: 12/10/2020
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Oliver Chi, City Manager
PREPARED BY: Travis Hopkins, Assistant City Manager
SUBJECT: Consider joining the Orange County Power Authority (OCPA), a
Community Choice Energy (CCE) Joint Powers Authority (JPA)
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Dept. ID CS 20-020-Page 2 of 5
Meeting Date: 11/16/2020
with establishing the new OCPA entity. Those costs that Irvine has agreed to cover include
the following:
• OCPA agency start-up costs, which are estimated at $2.5 M.
• Initial working capital cash, which is estimated to be $8 - $17 M, depending on the
participation level in the initial JPA agency.
Additionally, as noted above, the JPA agreement stipulates that any participating agency
has the right to withdraw from the venture for any reason and without any liability or cost
prior to March 1, 2021.
Financial details and risks associated with the proposed JPA, and its associated impacts
on Huntington Beach, would need to be further reviewed and assessed based on actual
participation levels after the JPA is formed. Of note, under the JPA agreement, Founding
Party members have no financial obligation to the CCE entity being formed, which provides
financial protections for Huntington Beach in the event that the City Council decides to
move forward joining the OCPA. Additionally, in California, there are currently 21 CCE
entities that have been formed, and none of those entities have experienced any serious
financial difficulties. This reality means that it remains untested how much a CCE JPA
could financially lean into its member agency, should any fiscal difficulties arise.
Given these fiscal scenarios, should the City Council decide to move forward with joining
the OCPA agency as a Founding Party member, staff would recommend that the City
Council also direct that a full fiscal analysis of the JPA situation and its impacts on
Huntington Beach be developed and presented for consideration by February 1, 2021.
Recommended Action:
Provide direction to staff on whether to join the Orange County Power Authority CCE JPA
as a Founding Member.
If the City Council directs to move forward, the staff recommendation would be as follows:
A) Introduce Ordinance No. 4227 for first reading; An Ordinance of the City of
Huntington Beach Authorizing the Implementation of a Community Choice
Aggregation Program; and
B) Adopt Resolution No. 2020-87; A Resolution of the City Council of the City of
Huntington Beach, Approving the Orange County Joint Powers Authority Agreement
and Authorizing the Implementation of a Community Choice Aggregation Program;
and
C) Authorize the City Manager to execute the Orange County Power Authority Joint
Powers Agreement; and
D) Appoint from the City Council one Board Member and one Alternate to serve on the
Board of Directors of the Orange County Power Authority on behalf of the City of
Huntington Beach; and
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Dept. ID CS 20-020-Page 3 of 5
Meeting Date: 11/16/2020
E) Authorize and direct that staff perform a full financial risk assessment associated
with joining the Orange County Power Authority, and bring those findings back for
City Council consideration by February 1, 2021, to determine if the City should
maintain membership or withdraw from the Orange County Power Authority before
the March 1, 2021, no-risk deadline.
Alternatively, the City Council should take no action if the decision is made to not move
forward with joining the Orange County Power Authority as a Founding Party member.
Analysis:
CCE Background
CCEs are a mechanism authorized in California in 2002 by Assembly Bill 117, whereby
local electrical service customers are provided with options when it comes to determining
who they purchase their power from. Under the CCE set-up, customers can continue to
procure their electrical power through their current utility provider (in the case of Huntington
Beach, that would be Southern California Edison), or they can opt to have a local municipal
government (or a coalition of local governments) procure electrical power on their behalf.
Typically, CCEs are established with larger environmental or social goals in mind, such as
increasing the share of power procured from renewable sources. In addition, CCEs have
been shown to provide slight cost savings (around 1-2% decrease) over traditional
investor-owned utility operations.
Of note, establishing a CCE does not mean completely severing ties with the investor-
owned utility, given that the utility agency still owns and manages the distribution lines that
transmit electrical power to homes and businesses. Further, the utility company still meters
each customer’s power usage, and continues to send customers their electrical bill. Under
the CCE model, what changes is the entity which purchases electricity on behalf of the
customer – rather than the utility company performing that role, the responsibility is
transferred to the newly formed local entity.
The Orange County Power Authority
The City of Irvine has been spearheading an effort to create a regional CCE Joint Powers
Authority (JPA), called the Orange County Power Authority (OCPA). Under this JPA
approach, the OCPA would become the entity that procures power for its customer base,
and would coordinate with SCE on electrical distribution, metering, and billing related
matters. Of note, CCEs have been authorized to exist in California since 2002, and today,
there are 21 CCE programs in California that serve around 10 million customers.
Based on Irvine’s efforts to date, staff is aware of at least 8 other agencies that are
interested in joining the OCPA today. Those agencies include:
1. Irvine
2. Fullerton
3. Lake Forest
4. Buena Park
5. Costa Mesa
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Dept. ID CS 20-020-Page 4 of 5
Meeting Date: 11/16/2020
6. Laguna Woods
7. Santa Ana
8. Villa Park
Of note, it appears that Irvine, Fullerton, Lake Forest, and Buena Park will be joining as
Founding Party members by entering the JPA before the end of 2020, with the other
identified agencies looking to participate as Additional Party members with possible JPA
entry dates in 2021.
Given the uncertain nature of which agencies are looking to join the JPA, it is difficult to
model precise fiscal data for the proposed OCPA entity. However, Irvine has
commissioned a detailed fiscal analysis to assess various possible scenario through a 10-
year pro forma document, a copy of which is included as an attachment to this report. Per
that assessment, the proposed OCPA was identified as being financially viable, with the
following key summary findings:
• OCPA would be able to repay the City of Irvine’s start-up and working capital loans,
and build up proper financial reserves, during the first 5-7 years of operation.
• After initial debt service costs are repaid, it is estimated that a significant amount of
net income will be available to the OCPA for use towards customer program or
additional electrical rate discounts.
If the decision is made to move forward with joining the OCPA, staff would recommend that
a full assessment of the arrangement be analyzed and brought back for City Council review
by February 1, 2021. In addition to a full financial analysis of the effort, included among
some of the other issues that should be assessed are:
• Structure / Management of the OCPA
o The proposed OCPA agency is expecting to hire 2 staff members in 2021,
and ramping up to 5 staff members in 2022. At build out in 2023, the OCPA
is expected to have 10 employees in 2023.
o The staffing, structure, and management of the OCPA will be critical to its
success, and needs to be assessed moving ahead.
• Customer Opt-out Risks
o The primary risk to the CCE would be if it could no longer offer competitive
electrical power rates when compared against SCE. Customers have the
option of opting out of the OCPA CCE option, and will likely do so if power
costs for the JPA exceed what is charged by SCE.
o Based on actual experience in California, CCEs have seen opt-out rates of
around 2-3% of eligible customers.
o Additionally, customers could leave the OCPA entity and move to Direct
Access programs.
• Energy Cost Risks
o CCEs face real financial risks associated with procuring energy, capacity,
renewable energy credits, and carbon-free energy, all at a cost that is below
revenues received from retail customers.
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Dept. ID CS 20-020-Page 5 of 5
Meeting Date: 11/16/2020
• Legislative and Regulatory Risks
o The electrical power industry is in the midst of significant change and
disruption, and regulatory issues related to electrical energy procurement and
management pose a possible risk moving forward. These issues need to be
properly analyzed and reviewed moving forward.
Environmental Status:
Not applicable.
Strategic Plan Goal:
Click here to enter text.
Attachment(s):
1) Orange County Power Authority Joint Powers Agreement
2) Ordinance No. 4227, An Ordinance of the City of Huntington Beach Authorizing the
Implementation of a Community Choice Aggregation Program
3) Resolution No 2020- 87, A Resolution of the City Council of the City of Huntington
Beach Approving the Orange County Joint Powers Agreement and Authorizing
Implementation of a Community Choice Aggregation Program
4) OCPA Preliminary Pro Forma
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DRAFT
Amber Nyquist, Manager
amber.nyquist@gdsassociates.com
direct 425-655-1042
cell 360-319-7946
570 Kirkland Way Suite 100 Kirkland, WA 98033
425-889-2700 Fax 866-611-3791 www.eesconsulting.com
Marietta, GA; Austin, TX; Auburn, AL; Manchester, NH; Madison, WI; Orlando, FL; Augusta, ME; Seattle, WA and Portland, OR
November 12, 2020
TO: Mark Steuer
FROM: Gary Saleba; Amber Nyquist
SUBJECT: OC CCA Preliminary Proforma
CC: Jeff Melching, Ryan Baron
Introduction
EES has updated the preliminary 10-year financial pro forma for the proposed Orange County CCA (OC
CCA) joint powers authority. The update modifies several assumptions including incorporating
preliminary load data provided by SCE for each potential city participant, and recent CPUC filings informing
rate and power costs. Upon receiving the final SCE load data and 2021 PCIA, this pro forma will be
updated by December 31, 2020 and used to draft an Implementation Plan and obtain necessary financing.
Key assumptions and updates for this version of the pro forma are summarized below.
1. SCE provided preliminary 2019 load data for the following 7 cities: Irvine, Santa Ana, Huntington
Beach, Fullerton, Costa Mesa, Lake Forest and Villa Park. This data was analyzed for
reasonableness and used as the basis for the load forecasts. Impacts from COVID are not
modeled.
2. There will be a phased launch of the JPA as is customary for all CCAs. Non-residential customers
(commercial & industrial) are assumed to begin taking CCA service in April 2022 and residential
customers will take service beginning October 2022. The later launch of residential customers
significantly reduces the costs of resource adequacy and cash for working capital requirements.
3. 2020 SCE generation and delivery rates have been updated based on current SCE 2020 filings at
the CPUC, including SCE’s preliminary 2021 Energy Resource Recovery Account (“ERRA”) filing.
SCE’s ERRA filing projects the following year’s fuel and energy purchase costs. SCE generation
rates for 2021 are estimated to increase by 3%.
4. The PCIA is based on SCE’s draft 2021 ERRA filing ($0.0161/kWh filed in July 2020) where the 2021
vintage PCIA is increased by the $0.005/kWh cap in 2022 and increased annually at 5%. Final 2021
Vintage PCIA rates may not be available until December 2020 or even early 2021 depending on
the proceedings that have received protests from currently operating CCAs.
5. Power costs for market (SCE area), resource adequacy, long-term renewable and short-term
renewable energy having been updated based on the Market Price Benchmarks forecast by the
CPUC.1 The benchmark calculations have resulted in a decrease in forecast power prices
compared with the previous pro forma.
1 Calculation of the Market Price Benchmarks for the Power Charge Indifference Adjustment Forecast and True Up.
November 2, 2020. Pursuant to Decision (D.) 19-10-001, Energy Division issues the following values for the Power
40
DRAFT
570 Kirkland Way Suite 100 Kirkland, WA 98033
425-889-2700 Fax 866-611-3791 www.eesconsulting.com
Marietta, GA; Austin, TX; Auburn, AL; Manchester, NH; Madison, WI; Orlando, FL; Augusta, ME; Seattle, WA and Portland, OR
6. Power supply is assumed to be 38.5% renewable at launch then increases to 60% by 2030 to meet
State mandates.
7. Start-up costs are $2.5 million and repaid starting in 2026 over a 3-year period. This assumption
is made to comport with anticipated lending covenants.
8. Cash working capital requirements are estimated at $8-$17 million depending on the participation
scenario. This cash working capital requirement is repaid over 5 years from launch.
9. It is assumed that the CCA employs 5 full time staff at launch ramping up to 10 full time staff in
2023.
These updates and assumptions are described in more detail below.
Load Forecast
The OC CCA load forecast is based on preliminary 2019 usage for bundled customers (i.e. direct access
customers are excluded). Participation rates of 90% are applied to non-residential customers and 95%
participation rates are applied to residential customers. Table 1 summarizes the load and service account
forecasts for 3 CCA scenarios. Note that the three scenarios have been modified and include only cities
for which SCE provided data.
TABLE 1
OC CCA LOAD FORECAST **PRELIMINARY**
Scenario 1
Irvine and Fullerton
Scenario 2
Scenario 1 + Huntington Beach and
Costa Mesa
Scenario 3
Scenario 2 + Santa Ana, Lake
Forest, and Villa Park
Load GWh/Year Service Accounts Load GWh/Year Service Accounts Load GWh/Year Service Accounts
2022 1,441 174,919 2,336 303,901 3,317 418,990
2023 2,442 176,006 4,024 305,790 5,694 421,594
2024 2,457 177,098 4,049 307,686 5,729 424,208
2025 2,472 178,196 4,074 309,593 5,765 426,838
2026 2,488 179,301 4,099 311,513 5,801 429,485
2027 2,503 180,412 4,125 313,444 5,837 432,148
2028 2,519 181,531 4,150 315,387 5,873 434,827
2029 2,534 182,656 4,176 317,343 5,910 437,523
2030 2,550 183,789 4,202 319,310 5,946 440,235
2031 2,566 184,928 4,228 321,290 5,983 442,965
Charge Indifference Adjustment (PCIA) Forecast and True Up to be used as inputs in utilities 2020 Energy Resource
Recovery Account (ERRA) Forecast Updates in early November 2020.
41
DRAFT
570 Kirkland Way Suite 100 Kirkland, WA 98033
425-889-2700 Fax 866-611-3791 www.eesconsulting.com
Marietta, GA; Austin, TX; Auburn, AL; Manchester, NH; Madison, WI; Orlando, FL; Augusta, ME; Seattle, WA and Portland, OR
Power Costs
The largest expense item for a CCA is power supply costs. The power cost forecast assumes OC CCA meets
California renewables portfolio standard (RPS) requirements, purchases resource adequacy consistent
with California Public Utilities Commission (CPUC) requirements and meets requirements for all other
applicable regulations. Total all-in RA prices range from $5/kW-month in winter to $11/kW-mo in summer
months. The weighted average annual RA prices is approximately $7.50/kW-month. For reference, the
market price benchmark shows that 2021 forecast is $6.37/kW-mo for local RA, which is the highest price
RA product. Thus, the RA forecast used both reflects current trends and is conservatively high.
Market purchases are priced around $38/MWh (all hours), and short-term renewables are an additional
$14.49/MWh (PCC1 RECs) per the market price benchmark. PCC2 RECs are priced at an additional
$6/MWh. Carbon free energy is priced as an adder of $6/MWh. In addition to these costs, OC CCA will
have CAISO costs of approximately $3.90/MWh for transmission related services. Starting in 2021, OC
CCA will need to procure 65% of the State mandated RPS from contracts that are 10 years or longer.
Recent long-term contracts have been signed by CCAs for $20-$34/MWh. The pro forma assumes OC CCA
will be able to purchase these contracts for $30/MWh which would include a mix of solar, wind, and solar
plus storage. This price for long-term renewable power is also conservatively high.
Staffing, Consulting, and Overhead
Consultant costs were updated to reflect recent consultant agreements negotiated by CCAs with their
service providers. Upfront consulting costs for 2021 consist of legal/regulatory assistance, administration,
marketing and outreach, financial services, technical consultants and initial CCA staff hires.
Staffing costs include salary and benefits for an Executive Director beginning in 2021, Executive Secretary
beginning in April 2021, for a total of 5 full time staff members beginning in March 2022 ramping up to 10
full time staff members by January 2023. It should be noted that CCA staff do not typically participate in
the State Cal PERS retirement program. Rather, they are offered a traditional 401k-type of retirement
program.
Start-Up Cost Estimates
The amount needed prior to program launch varies depending on the size of the CCA. Table 3 below
provides a range of estimated costs based on small, medium, and large CCA scenarios. The pro forma
assumes $2.5 million in start-up costs (medium scenario). The actual cost will depend on decisions made
by the JPA board and Executive Director such as timing of staff ramp-up, phased launch approach, office
space, and any unforeseen changes in implementation due to SCE operational issues with billing and data
management.
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DRAFT
570 Kirkland Way Suite 100 Kirkland, WA 98033
425-889-2700 Fax 866-611-3791 www.eesconsulting.com
Marietta, GA; Austin, TX; Auburn, AL; Manchester, NH; Madison, WI; Orlando, FL; Augusta, ME; Seattle, WA and Portland, OR
TABLE 3
OC CCA START-UP COST ESTIMATES **PRELIMINARY**
Task
Small
(City-Only)
Medium
(2 – 10 Members)
Large
(20 Members)
Solicit Members/Initial Outreach $0 $50,000 $150,000
Form JPA $0 $100,000 $200,000
CPUC Bond $100,000 $140,000 $100,000
SCE Deposit $200,000 $200,000 $200,000
Consultants
Legal $150,000 $400,000 $1,200,000
Technical $30,000 $400,000 $1,000,000
Financial Advisor $10,000 $150,000 $250,000
Marketing/Outreach $10,000 $200,000 $200,000
CCA Staffing $200,000 $550,000 $900,000
Infrastructure $0 $300,000 $500,000
Total 18-Month Cash Outlay $700,000 $2,490,000 $4,700,000
Debt Service
Two debt service payments are assumed. The first is for $2.5 million in start-up costs. Repayment of this
loan begins in 2025 and will conclude in 3 years. In addition, a total of $8-17 million will be needed to
bridge the gap in cash for working capital depending on participation Scenario. This amount is assumed
to be financed over 5 years with repayment beginning at program launch. Operating CCAs have typically
repaid these in 3-5 years. Table 4 shows the cash needs by participation Scenario.
TABLE 4
FINANCING NEEDS **PRELIMINARY**
Participation
Scenario
Start-Up Costs,
Millions
Cash for Working Capital,
Millions
Scenario 1 $2.5 $8
Scenario 2 $2.5 $12
Scenario 3 $2.5 $17
PCIA
As noted in the introduction and key assumptions, the 2021 vintage PCIA for SCE has not yet been
determined for 2021, and it is not likely to be known until December 2020 at the earliest. Therefore, the
2021 vintage PCIA is modeled based on an expected level and a high level. The expected level is based on
the initial 2021 ERRA filing made by SCE on July 1, 2020. The average 2021 vintage PCIA across all customer
classes is $0.0161/kWh.2 In subsequent filings, this amount has been estimated at $0.0146/kWh3 based
on revenue collection made during the August heat wave. The higher figure of $0.0161/kWh is used as
2 Protest of Clean Power Alliance and California Choice Energy Authority to the Application of Southern California
Edison. August 5, 2020. Table 1.
3 Joint Opening Brief of the Clean Power Alliance and California Choice Energy Authority (the “SoCal CCAs”) and the
California Community Choice Association. October 26, 2020. Table 3.
43
DRAFT
570 Kirkland Way Suite 100 Kirkland, WA 98033
425-889-2700 Fax 866-611-3791 www.eesconsulting.com
Marietta, GA; Austin, TX; Auburn, AL; Manchester, NH; Madison, WI; Orlando, FL; Augusta, ME; Seattle, WA and Portland, OR
the expected PCIA for the 2021 vintage PCIA. This value is increased by the full $0.005/kWh cap for the
2022 calendar year and 5% annually after.
OC CCA Revenues
Retail rate revenues are calculated based on forecast SCE generation rates and PCIA by class. OC CCA
revenue is calculated based on an assumed 4% discount off the SCE generation rate. This translates to a
2% total discount off a CCA customer’s total electric bill.
Summary
It is anticipated the OC CCA will be able to repay the start-up and working capital loans within 5-7 years
and likely sooner. OC CCA will build financial reserves over the first 5-7 years of 120 days of operating
expenses ($50M - $120M) depending on participation Scenario, and subject to JPA Board direction. After
debt service is repaid, it is estimated that a significant amount of net income will be available to OC CCA
for customer programs or additional rate discounts. All assumptions will need to be updated before the
pro forma can populate the OC CCA Implementation Plan. In particular, the PCIA in SCE’s 2021 ERRA filings
must be finalized and incorporated into the final pro formas. EES is confident in level of all other pro
forma estimates in that they are acceptably accurate for feasibility study purposes and overall, financially
conservative.
44
DRAFT
Amber Nyquist, Manager
amber.nyquist@gdsassociates.com
direct 425-655-1042
cell 360-319-7946
570 Kirkland Way Suite 100 Kirkland, WA 98033
425-889-2700 Fax 866-611-3791 www.eesconsulting.com
Marietta, GA; Austin, TX; Auburn, AL; Manchester, NH; Madison, WI; Orlando, FL; Augusta, ME; Seattle, WA and Portland, OR
TABLE 5
SCENARIO 1 OC CCA PROFORMA, EXPECTED PCIA, ACCRUAL BASIS **PRELIMINARY**
Scenario 1: Irvine & Fullerton
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031
Revenues from Operations ($)
Electric Sales Revenues for CCE $0 $93,846,393 $157,945,554 $162,534,070 $161,599,939 $166,021,835 $170,803,823 $175,713,962 $180,755,248 $185,930,720 $195,027,587
Less Uncollected Accounts $0 $469,232 $789,728 $812,670 $808,000 $830,109 $854,019 $878,570 $903,776 $929,654 $975,138
Total Revenues for CCA $0 $93,377,161 $157,155,826 $161,721,400 $160,791,939 $165,191,726 $169,949,804 $174,835,393 $179,851,472 $185,001,067 $194,052,449
Cost of Operations ($)
Block Energy Purchases $49,382,486 $74,558,763 $73,649,078 $68,334,114 $66,182,771 $60,557,023 $58,190,726 $55,760,013 $53,982,334 $54,116,140
RPS Adders and Long-Term Energy $9,218,686 $20,690,034 $21,632,286 $24,831,539 $28,066,204 $30,300,355 $32,723,119 $35,058,582 $36,845,261 $37,074,260
Resource Adequacy $15,254,548 $26,759,096 $28,216,354 $29,869,761 $31,558,177 $33,342,032 $35,226,721 $37,217,943 $39,321,722 $41,544,418
Everything Else $7,238,851 $12,244,142 $12,605,446 $13,059,536 $13,429,090 $14,463,461 $15,335,805 $16,212,180 $17,094,161 $17,944,952
Total Cost of Power Supply $0 $81,094,571 $134,252,035 $136,103,164 $136,094,950 $139,236,241 $138,662,870 $141,476,371 $144,248,719 $147,243,478 $150,679,771
Operating & Administrative
Data Management $0 $502,232 $2,236,537 $2,295,447 $2,360,957 $2,423,143 $2,486,967 $2,552,473 $2,619,703 $2,688,705 $2,759,524
Scheduling Coordinator $0 $340,000 $516,800 $527,136 $538,563 $549,334 $560,321 $571,527 $582,958 $594,617 $606,509
SCE Fees (includes billing)$0 $4,827 $21,110 $21,241 $21,384 $21,517 $21,651 $21,785 $21,921 $22,057 $22,194
Consulting Services $586,500 $993,582 $923,251 $941,716 $960,550 $979,761 $999,357 $1,019,344 $1,039,731 $1,060,525 $1,081,736
Staffing $656,370 $1,248,010 $2,103,498 $2,166,460 $2,213,406 $2,257,674 $2,302,828 $2,348,884 $2,395,862 $2,443,779 $2,492,655
General & Administrative expenses $24,480 $302,548 $207,682 $244,446 $249,743 $254,738 $259,833 $265,029 $270,330 $275,737 $281,251
Debt Service Payment on Financing $0 $1,410,988 $1,693,185 $1,693,185 $2,222,305 $2,222,305 $811,318 $529,120 $529,120 $0 $0
Total O&A Costs $1,267,350 $4,802,187 $7,702,062 $7,889,631 $8,566,908 $8,708,473 $7,442,274 $7,308,163 $7,459,625 $7,085,420 $7,243,869
Total Cost of Operations $1,267,350 $85,896,758 $141,954,097 $143,992,795 $144,661,859 $147,944,714 $146,105,144 $148,784,534 $151,708,344 $154,328,898 $157,923,640
Net Income ($1,267,350) $7,480,403 $15,201,729 $17,728,605 $16,130,081 $17,247,012 $23,844,660 $26,050,859 $28,143,128 $30,672,169 $36,128,809
Cash From Operations and Financing
Net Income From Operations ($1,267,350) $7,480,403 $15,201,729 $17,728,605 $16,130,081 $17,247,012 $23,844,660 $26,050,859 $28,143,128 $30,672,169 $36,128,809
Cash from Financing $2,500,000 $8,000,000 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cash Available $1,232,650 $15,480,403 $15,201,729 $17,728,605 $16,130,081 $17,247,012 $23,844,660 $26,050,859 $28,143,128 $30,672,169 $36,128,809
Net Income Allocation
Reserve Fund Contribution $416,663 $15,480,403 $15,201,729 $17,728,605 $1,910,868 $0 $0 $0 $0 $0 $1,181,833
Money Available for Discretionary Programs $475,987 $0 $0 $0 $14,219,213 $17,247,012 $23,844,660 $26,050,859 $28,143,128 $30,672,169 $34,946,976
Total Cash Outlays $1,232,650 $0 $0 $0 $14,219,213 $17,247,012 $23,844,660 $26,050,859 $28,143,128 $30,672,169 $34,946,976
Rate Stabilization Reserve Balance $416,663 $15,897,066 $31,098,795 $48,827,400 $50,738,268 $50,738,268 $50,738,268 $50,738,268 $50,738,268 $50,738,268 $51,920,101
Reserve Balance Target $416,663 $28,240,030 $46,669,840 $47,340,097 $47,560,063 $48,639,358 $48,034,568 $48,915,463 $49,876,716 $50,738,268 $51,920,101
CCA Total Bill $256,842,668 $462,479,175 $476,816,430 $485,985,463 $500,879,803 $516,519,071 $532,687,627 $549,405,539 $566,693,741 $584,127,374
SCE Total Bill $262,149,083 $471,342,649 $486,011,849 $495,389,444 $510,801,172 $526,704,869 $543,116,626 $560,053,070 $577,531,385 $595,569,330
Difference $5,306,415 $8,863,475 $9,195,419 $9,403,981 $9,921,369 $10,185,798 $10,428,999 $10,647,531 $10,837,643 $11,441,956
Total Bill Savings 2%2%2%2%2%2%2%2%2%2%
Generation Rate Discount 4%4%4%4%4%4%4%4%4%4%
45
DRAFT
570 Kirkland Way Suite 100 Kirkland, WA 98033
425-889-2700 Fax 866-611-3791 www.eesconsulting.com
Marietta, GA; Austin, TX; Auburn, AL; Manchester, NH; Madison, WI; Orlando, FL; Augusta, ME; Seattle, WA and Portland, OR
TABLE 6
SCENARIO 2 OC CCA PROFORMA, EXPECTED PCIA, ACCRUAL BASIS **PRELIMINARY**
Scenario 2: Irvine, Fullerton, Costa Mesa, Huntington Beach, with Expected PCIA
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031
Revenues from Operations ($)
Electric Sales Revenues for CCE $0 $152,765,727 $261,771,065 $269,375,842 $268,178,337 $275,516,563 $283,452,367 $291,600,842 $299,966,956 $308,555,757 $323,652,189
Less Uncollected Accounts $0 $763,829 $1,308,855 $1,346,879 $1,340,892 $1,377,583 $1,417,262 $1,458,004 $1,499,835 $1,542,779 $1,618,261
Total Revenues for CCA $0 $152,001,899 $260,462,210 $268,028,963 $266,837,446 $274,138,980 $282,035,105 $290,142,838 $298,467,122 $307,012,978 $322,033,928
Cost of Operations ($)
Block Energy Purchases $80,128,068 $122,642,050 $121,058,894 $112,254,369 $108,682,176 $99,331,291 $95,325,887 $91,224,233 $88,199,357 $88,301,463
RPS Adders and Long-Term Energy $14,938,156 $34,091,280 $35,643,761 $40,916,389 $46,246,522 $49,927,620 $53,919,447 $57,768,006 $60,712,542 $61,089,880
Resource Adequacy $24,633,464 $43,879,284 $46,273,858 $48,980,120 $51,748,767 $54,673,913 $57,764,406 $61,029,593 $64,479,346 $68,124,101
Everything Else $11,729,989 $20,175,539 $20,770,885 $21,541,750 $22,147,588 $23,832,467 $25,269,890 $26,713,955 $28,167,257 $29,569,165
Total Cost of Power Supply $0 $131,429,678 $220,788,153 $223,747,399 $223,692,627 $228,825,053 $227,765,292 $232,279,630 $236,735,786 $241,558,502 $247,084,609
Operating & Administrative
Data Management $0 $879,112 $3,885,710 $3,988,057 $4,101,873 $4,209,914 $4,320,801 $4,434,608 $4,551,414 $4,671,296 $4,794,335
Scheduling Coordinator $0 $340,000 $516,800 $527,136 $538,563 $549,334 $560,321 $571,527 $582,958 $594,617 $606,509
SCE Fees (includes billing)$0 $8,450 $36,675 $36,903 $37,152 $37,383 $37,615 $37,849 $38,084 $38,321 $38,559
Consulting Services $586,500 $993,582 $923,251 $941,716 $960,550 $979,761 $999,357 $1,019,344 $1,039,731 $1,060,525 $1,081,736
Staffing $656,370 $1,248,010 $2,103,498 $2,166,460 $2,213,406 $2,257,674 $2,302,828 $2,348,884 $2,395,862 $2,443,779 $2,492,655
General & Administrative expenses $24,480 $302,548 $207,682 $244,446 $249,743 $254,738 $259,833 $265,029 $270,330 $275,737 $281,251
Debt Service Payment on Financing $0 $2,116,481 $2,539,778 $2,539,778 $3,068,898 $3,068,898 $952,417 $529,120 $529,120 $0 $0
Total O&A Costs $1,267,350 $5,888,183 $10,213,393 $10,444,496 $11,170,185 $11,357,703 $9,433,171 $9,206,362 $9,407,499 $9,084,274 $9,295,045
Total Cost of Operations $1,267,350 $137,317,860 $231,001,546 $234,191,895 $234,862,812 $240,182,756 $237,198,462 $241,485,992 $246,143,285 $250,642,776 $256,379,654
Net Income ($1,267,350) $14,684,038 $29,460,664 $33,837,067 $31,974,633 $33,956,225 $44,836,643 $48,656,845 $52,323,837 $56,370,202 $65,654,274
Cash From Operations and Financing
Net Income From Operations ($1,267,350) $14,684,038 $29,460,664 $33,837,067 $31,974,633 $33,956,225 $44,836,643 $48,656,845 $52,323,837 $56,370,202 $65,654,274
Cash from Financing $2,500,000 $12,000,000 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cash Available $1,232,650 $26,684,038 $29,460,664 $33,837,067 $31,974,633 $33,956,225 $44,836,643 $48,656,845 $52,323,837 $56,370,202 $65,654,274
Net Income Allocation
Reserve Fund Contribution $416,663 $26,684,038 $29,460,664 $25,841,739 $0 $0 $0 $0 $0 $0 $1,886,097
Money Available for Discretionary Programs $475,987 $0 $0 $7,995,328 $31,974,633 $33,956,225 $44,836,643 $48,656,845 $52,323,837 $56,370,202 $63,768,177
Total Cash Outlays $1,232,650 $0 $0 $7,995,328 $31,974,633 $33,956,225 $44,836,643 $48,656,845 $52,323,837 $56,370,202 $63,768,177
Rate Stabilization Reserve Balance $416,663 $27,100,701 $56,561,365 $82,403,104 $82,403,104 $82,403,104 $82,403,104 $82,403,104 $82,403,104 $82,403,104 $84,289,201
Reserve Balance Target $416,663 $45,145,598 $75,945,714 $76,994,596 $77,215,171 $78,964,194 $77,983,056 $79,392,655 $80,923,820 $82,403,104 $84,289,201
CCA Total Bill $418,788,764 $767,888,563 $791,685,945 $807,269,313 $832,001,316 $857,969,608 $884,816,311 $912,574,711 $941,279,530 $970,238,071
SCE Total Bill $427,462,457 $782,621,814 $806,971,796 $823,062,443 $848,663,635 $875,081,921 $902,344,022 $930,477,548 $959,511,036 $989,473,975
Difference $8,673,692 $14,733,251 $15,285,851 $15,793,130 $16,662,318 $17,112,314 $17,527,711 $17,902,838 $18,231,506 $19,235,905
Total Bill Savings 2.0%1.9%1.9%1.9%2.0%2.0%1.9%1.9%2%2%
Generation Rate Discount 4%4%4%4%4%4%4%4%4%4%
46
DRAFT
570 Kirkland Way Suite 100 Kirkland, WA 98033
425-889-2700 Fax 866-611-3791 www.eesconsulting.com
Marietta, GA; Austin, TX; Auburn, AL; Manchester, NH; Madison, WI; Orlando, FL; Augusta, ME; Seattle, WA and Portland, OR
TABLE 7
SCENARIO 3 OC CCA PROFORMA, EXPECTED PCIA, ACCRUAL BASIS **PRELIMINARY**
Scenario 3: Irvine, Fullerton, Costa Mesa, Huntington Beach, Santa Ana, Lake Forest, Villa Park, with Expected PCIA
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031
Revenues from Operations ($)
Electric Sales Revenues for CCE $0 $217,337,591 $370,764,540 $381,535,714 $379,755,056 $390,146,381 $401,383,909 $412,922,592 $424,769,463 $436,931,670 $458,309,036
Less Uncollected Accounts $0 $1,086,688 $1,853,823 $1,907,679 $1,898,775 $1,950,732 $2,006,920 $2,064,613 $2,123,847 $2,184,658 $2,291,545
Total Revenues for CCA $0 $216,250,903 $368,910,717 $379,628,035 $377,856,280 $388,195,649 $399,376,990 $410,857,979 $422,645,615 $434,747,011 $456,017,490
Cost of Operations ($)
Block Energy Purchases $113,722,441 $173,560,356 $171,327,620 $158,880,375 $153,827,673 $140,635,072 $135,002,132 $129,230,457 $124,981,639 $125,162,283
RPS Adders and Long-Term Energy $21,215,345 $48,241,169 $50,438,040 $57,899,549 $65,441,918 $70,650,348 $76,299,106 $81,744,882 $85,911,352 $86,445,305
Resource Adequacy $35,011,146 $62,094,162 $65,480,142 $69,312,424 $73,230,372 $77,369,786 $81,743,185 $86,363,793 $91,245,586 $96,403,327
Everything Else $16,659,068 $28,549,419 $29,391,865 $30,491,837 $31,358,401 $33,724,161 $35,758,188 $37,801,613 $39,858,110 $41,841,882
Total Cost of Power Supply $0 $186,608,000 $312,445,107 $316,637,667 $316,584,185 $323,858,365 $322,379,367 $328,802,611 $335,140,745 $341,996,687 $349,852,798
Operating & Administrative
Data Management $0 $1,231,173 $5,357,255 $5,498,362 $5,655,281 $5,804,238 $5,957,118 $6,114,026 $6,275,066 $6,440,348 $6,609,983
Scheduling Coordinator $0 $340,000 $516,800 $527,136 $538,563 $549,334 $560,321 $571,527 $582,958 $594,617 $606,509
SCE Fees (includes billing)$0 $11,834 $50,565 $50,879 $51,222 $51,540 $51,860 $52,183 $52,507 $52,833 $53,162
Consulting Services $586,500 $993,582 $923,251 $941,716 $960,550 $979,761 $999,357 $1,019,344 $1,039,731 $1,060,525 $1,081,736
Staffing $656,370 $1,248,010 $2,103,498 $2,166,460 $2,213,406 $2,257,674 $2,302,828 $2,348,884 $2,395,862 $2,443,779 $2,492,655
General & Administrative expenses $24,480 $302,548 $207,682 $244,446 $249,743 $254,738 $259,833 $265,029 $270,330 $275,737 $281,251
Debt Service Payment on Financing $0 $2,998,349 $3,598,018 $3,598,018 $4,127,139 $4,127,139 $1,128,790 $529,120 $529,120 $0 $0
Total O&A Costs $1,267,350 $7,125,496 $12,757,068 $13,027,018 $13,795,903 $14,024,424 $11,260,106 $10,900,113 $11,145,573 $10,867,839 $11,125,296
Total Cost of Operations $1,267,350 $193,733,495 $325,202,175 $329,664,684 $330,380,088 $337,882,789 $333,639,473 $339,702,724 $346,286,318 $352,864,526 $360,978,093
Net Income ($1,267,350) $22,517,408 $43,708,542 $49,963,351 $47,476,193 $50,312,860 $65,737,517 $71,155,255 $76,359,297 $81,882,485 $95,039,397
Cash From Operations and Financing
Net Income From Operations ($1,267,350) $22,517,408 $43,708,542 $49,963,351 $47,476,193 $50,312,860 $65,737,517 $71,155,255 $76,359,297 $81,882,485 $95,039,397
Cash from Financing $2,500,000 $17,000,000 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cash Available $1,232,650 $39,517,408 $43,708,542 $49,963,351 $47,476,193 $50,312,860 $65,737,517 $71,155,255 $76,359,297 $81,882,485 $95,039,397
Net Income Allocation
Reserve Fund Contribution $416,663 $39,517,408 $43,708,542 $32,367,642 $0 $0 $0 $0 $0 $0 $2,667,474
Money Available for Discretionary Programs $475,987 $0 $0 $17,595,709 $47,476,193 $50,312,860 $65,737,517 $71,155,255 $76,359,297 $81,882,485 $92,371,923
Total Cash Outlays $1,232,650 $0 $0 $17,595,709 $47,476,193 $50,312,860 $65,737,517 $71,155,255 $76,359,297 $81,882,485 $92,371,923
Rate Stabilization Reserve Balance $416,663 $39,934,071 $83,642,613 $116,010,255 $116,010,255 $116,010,255 $116,010,255 $116,010,255 $116,010,255 $116,010,255 $118,677,729
Reserve Balance Target $416,663 $63,693,204 $106,915,784 $108,382,910 $108,618,111 $111,084,752 $109,689,690 $111,683,087 $113,847,557 $116,010,255 $118,677,729
CCA Total Bill $593,739,566 $1,078,436,243 $1,111,894,698 $1,133,627,686 $1,168,393,721 $1,204,903,366 $1,242,649,646 $1,281,679,486 $1,322,041,841 $1,362,767,326
SCE Total Bill $606,181,535 $1,099,492,625 $1,133,744,430 $1,156,168,838 $1,192,175,708 $1,229,333,154 $1,267,678,842 $1,307,251,696 $1,348,091,945 $1,390,241,163
Difference $12,441,969 $21,056,382 $21,849,732 $22,541,151 $23,781,987 $24,429,788 $25,029,196 $25,572,210 $26,050,104 $27,473,837
Total Bill Savings 2.1%1.9%1.9%1.9%2.0%2.0%2.0%2.0%2%2%
Generation Rate Discount 4%4%4%4%4%4%4%4%4%4%
47