HomeMy WebLinkAboutJPA - Cmmnty Choice Aggregation Energy PgrmREQUEST:
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CONTENTS:
Recommendation
CITY OF PALM DESERT
COMMUNITY DEVELOPMENT DEPARTMENT
STAFF REPORT
REQUEST FOR DIRECTION RELATED TO ENTERING INTO A
JOINT POWERS AGREEMENT TO IMPLEMENT A COMMUNITY
CHOICE AGGREGATION ENERGY PROGRAM FOR THE
COACHELLA VALLEY ASSOCIATION OF GOVERNMENTS
(CVAG) REGION
Ryan Stendell, Director of Community Development
June 8, 2017
Draft Joint Powers Agreement
Correspondence from CVAG
By Minute Motion:
1. Direct staff to investigate potential risks and benefits related to
involvement in a Joint Powers Agreement (JPA) implementing a
Community Choice Aggregation (CCA) program and report back to the
City Council at its meeting of July 13, 2017.
Strategic Plan Obiective
Energy and Sustainability Priority 2: Promote greater usage of more sustainable
materials.
One of the most advantageous goals of existing CCAs is to purchase bulk power
from more sustainable power providers, which meets the intent of the above -
mentioned strategic plan goal.
Background
This report is intended to provide the Council with additional information about
CCA's, provide an update on information received at the most recent CVAG CCA
Ad Hoc Committee Meeting, and receive direction for how to proceed.
What is a CCA?
California legislation allows cities, counties, or regions to undertake electric power
supply responsibilities on behalf of customers within their jurisdictions that are
currently served by investor -owned utilities (i.e. Southern California Edison). The
Staff Report
CVAG: Community Choice Aggregation
Page 2 of 4
June 8, 2017
existing investor -owned utility (IOU) continues to be responsible for the
infrastructure and related local distribution services. Customers within the defined
boundary have the option to purchase power directly from the IOU or from the local
CCA.
Why Participate in a CCA?
Through CCA, local governments and their constituents can possibly achieve a powerful
range of objectives:
• Potentially reducing retail power rates.
• Providing power supply with a lower carbon footprint.
• Enhancing local control of rate structure, and sourcing of power.
• Contributing to local climate action goals.
How Do You Pay for It?
CCAs are revenue based not govemment subsidized, and generate their revenue from
selling power. Electricity rates that consumers used to pay to IOUs are bundled and
redirected to support the group purchase of electricity through the local CCA program.
Discussion
CVAG has been studying the potential for a CVAG region CCA, and believes it may be
of interest to certain members. CVAG recently conducted a feasibility study in
conjunction with two other regional associations of government (San Bernardino
Associated Governments & Western Riverside Council of Governments), and suggests
there might be a possible reduction in retail power costs of three to five percent (3-5%).
CVAG staff has been careful to caution that most CCAs do not result in a net savings to
the consumer; however, allow a region to choose a more sustainable network of
purchased power.
In the most recent presentation, CVAG outlined the steps necessary to fully implement
a CCA, which are outlined below:
• Governance Structure: The CCA Ad Hoc Working Group is proposing utilizing a
new Joint Powers Agreement inclusive of Blythe, Cathedral City, Desert Hot
Springs, Indian Wells, Palm Desert, and Palm Springs to serve as the governing
body for the CCA. In this case, CVAG would assist with the creation of the JPA,
with the CCA spinning off as an independent agency after five (5) years.
• Potential Upfront Financing Options: If a new CCA is formed, there are upfront
costs of hiring staff who will be responsible for setting up this new agency and
beginning to purchase bulk power. Many private firms view investments in startup
CCAs as lucrative, and CVAG has proposed the notion that our local members
Staff Report
CVAG: Community Choice Aggregation
Page 3of4
June 8, 2017
might want to fund the startup in return for a favorable return on investment.
Potential startup costs are estimated at a maximum of 2.5 million.
• Benchmark Steps for Forming a CCA: CVAG staff, a consulting team, and an Ad
Hoc Working Group have set a very aggressive goal of launching a regional CCA
by May 2018. The first step in that process is having each city consider a Joint
Powers Agreement, which would commit the City of Palm Desert into the
process. CVAG has requested each jurisdiction consider their inclusion by July of
2017.
• Rates and Rate Structure: CVAG staff has provided a summary for rate
structures in place at other CCAs in California. It has been communicated to the
Ad Hoc Working Group that the purchase of bulk power is favorable at the
moment, and IOUs are willing to work with CCAs, which is one reason for the
aggressively timed process. Once long-term bulk power purchase agreements
are in place, rates to the consumer are at the sole discretion of the CCA.
Analysis
Mayor Pro Tem Jonathan and staff have been regularly attending the Ad Hoc Working
Group meetings hosted by CVAG. CVAG has requested that agencies formally vote on
inclusion of the JPA by July 2017. It is important to note that the operation of utilities is
not a service that is provided by the City, and is not an area in which staff has high level
of expertise.
Staff believes the concept of a CCA is intriguing; however, is concerned about the
speed at which this process is moving, and has not had the opportunity to thoroughly
investigate the proposed concept independent of the information provided by CVAG.
Staff believes that it would be sensible to study the following questions:
1. What is the worst case scenario, and what are the implications to the City?
2. What is the likelihood of that scenario?
3. Can we mitigate that scenario/liability?
Staff has requested that CVAG prepare a memo addressing the above referenced
concerns which can be further reviewed by City staff prior to the July 13th City Council
meeting.
Staff is also inquiring as to whether funding the CCA's initial startup costs should be
considered in any future actions. Such investment would not be in keeping with the
City's adopted investment policy.
Staff Report
CVAG: Community Choice Aggregation
Page 4 of 4
June 8, 2017
Fiscal Analysis
There is no fiscal impact related to this report. Further study of fiscal impact will be
conducted based on the direction received from the City Council.
1
Ryan Stendell, Director of Community Development
Reviewed:
ru
Janet re, Director of Finance
Approval:
Lauri Aylaian, City Manager
COACHELLA VALLEY COMMUNITY ENERGY AUTHORITY
(placeholder, JPA name to be determined)
JOINT POWERS AGREEMENT
(changes from 5/15/2017 version shown in italics)
This Joint Powers Agreement ("Agreement"), effective as of , 2017 is made and
entered into pursuant to the provisions of Title 1, Division 7, Chapter 5, Article 1 (Section 6500
et seq.) of the California Government Code relating to the joint exercise of powers among the
parties set forth in Exhibit B (individually "Party" or "Member", collectively "Parties" or
"Members"). The term "Parties" or "Members" shall also include an incorporated municipality or
county added to this Agreement in accordance with Section 2.4.
RECITALS
A. The Parties share various powers under California law, including but not limited
to the power to purchase, supply, and aggregate electricity for themselves and
customers within their jurisdictions.
B. In 2006, the State Legislature adopted AB 32, the Global Warming Solutions Act,
which mandates a reduction in greenhouse gas emissions in 2020 to 1990 levels.
The California Air Resources Board is promulgating regulations to implement
AB 32 which will require local governments to develop programs to reduce
greenhouse gas emissions.
C. The purposes for entering into this Agreement include:
a. Reducing greenhouse gas emissions related to the use of power
throughout the jurisdictions of the Parties and neighboring regions;
b. Providing electric power and other forms of energy to customers at a
competitive cost;
c. Carrying out programs to reduce energy consumption;
d. Stimulating and sustaining the local economy by developing local jobs in
renewable and conventional energy; and
e. Promoting long-term electric rate stability, energy security and reliability
for residents through local control of electric generation resources.
D. It is the mission and purpose of this Agreement to build a Community Choice
Aggregation program that is locally controlled and delivers cost -competitive clean
electricity, product choice, price stability, energy efficiency and greenhouse gas
emission reductions.
E. It is the intent of this Agreement to promote the development and use of a wide
range of renewable and efficient energy sources and energy efficiency programs,
including but not limited to solar, wind, and biomass energy production. The
Coachella Valley Community Choice Aggregation 1
Draft JPA Agreement, May 2017
purchase of renewable power and greenhouse gas -free energy sources will be
the desired approach to decrease regional greenhouse gas emissions and
accelerate the State's transition to clean power resources to the extent feasible.
The CVCEA will also add increasing levels of locally generated renewable
resources as these projects are developed and customer energy needs expand.
F. The Parties desire to establish a separate public agency, known as the
Coachella Valley Community Energy Authority or CVCEA, under the provisions
of the Joint Exercise of Powers Act of the State of California (Government Code
Section 6500 et seq.) ("Act") in order to collectively study, promote, develop,
conduct, operate, and manage energy programs.
G. The Parties anticipate adopting an ordinance electing to implement through the
CVCEA a common Community Choice Aggregation (CCA) program, an electric
service enterprise available to cities and counties pursuant to California Public
Utilities Code Sections 331.1(b,) and 366.2. The first priority of the CVCEA will
be the consideration of those actions necessary to implement the CCA Program.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises, covenants, and conditions
hereinafter set forth, it is agreed by and among the Parties as follows:
ARTICLE 1: DEFINITIONS AND EXHIBITS
1.1 Definitions. Capitalized terms used in the Agreement shall have the meanings
specified in Exhibit A, unless the context requires otherwise.
1.2 Documents Included. This Agreement consists of this document and the
following exhibits, all of which are hereby incorporated into this Agreement.
Exhibit A: Definitions
Exhibit B: List of the Parties
Exhibit C: Annual Energy Use
Exhibit D: Voting Shares
Exhibit E: Signatures
ARTICLE 2: FORMATION OF COACHELLA VALLEY COMMUNITY ENERGY AUTHORITY
2.1 Effective Date and Term. This Agreement shall become effective and CVCEA
shall exist as a separate public agency on , 2017 or when the
Parties execute this Agreement, whichever occurs later. The CVCEA shall
provide notice to the Parties of the Effective Date. CVCEA shall continue to
exist, and this Agreement shall be effective, until this Agreement is terminated in
accordance with Section 6.4, subject to the rights of the Parties to withdraw from
CVCEA.
Coachella Valley Community Choice Aggregation 2
Draft JPA Agreement, May 2017
2.2 Formation. There is formed as of the Effective Date a public agency named the
Coachella Valley Community Energy Authority. Pursuant to Sections 6506 and
6507 of the Act, CVCEA is a public agency separate from the Parties. Pursuant
to Sections 6508.1 of the Act, the debts, liabilities or obligations of CVCEA shall
not be debts, liabilities or obligations of the individual Parties unless the
governing board of a Party agrees in writing to assume any of the debts, liabilities
or obligations of CVCEA. A Party who has not agreed to assume an Authority
debt, liability or obligation shall not be responsible in any way for such debt,
liability or obligation even if a majority of the Parties agree to assume the debt,
liability or obligation of CVCEA. Notwithstanding Section 7.4 of this Agreement,
this Section 2.2 may not be amended unless such amendment is approved by
the governing board of each Party.
2.2.1 Name. CVCEA may change its name at any time through adoption of a
resolution of the Board of Directors.
2.3 Purpose. The purpose of this Agreement is to establish an independent public
agency in order to exercise powers common to each Party to build a Community
Choice Aggregation program that achieves significant, long-term GHG emission
reductions by offering clean, cost effective and price stable electricity to
residents, businesses, and agricultural producers while carrying out innovative
programs to reduce customer energy use, and to promote local renewable and
efficient energy production technologies. To that end, CVCEA will study,
promote, develop, conduct, operate, and manage energy, energy efficiency and
conservation, and other energy -related programs, and to exercise all other
powers necessary and incidental to accomplishing this purpose. Without limiting
the generality of the foregoing, the Parties intend for this Agreement to be used
as a contractual mechanism by which the Parties are authorized to participate in
the CCA Program, as further described in Section 4.1. The Parties intend that
other agreements shall define the terms and conditions associated with the
implementation of the CCA Program and any other energy programs approved
by CVCEA.
2.4 Membership in CVCEA.
2.4.1 The initial Members of CVCEA are the Cities of Blythe, Cathedral City,
Desert Hot Springs, Indian Wells, Palm Desert, and Palm Springs
2.4.2 Any city or county may request to become a member of CVCEA by
submitting a resolution adopted by its City Council or Board of
Supervisors to the Board of CVCEA. The Board shall review the request
and shall vote to approve or disapprove the request. The Board may
establish conditions, including but not limited to financial conditions,
under which the city or county may become a member of CVCEA. The
Board shall notify the then members of CVCEA of this request and the
date that the request will be on the Board's meeting agenda for action.
The date set for Board action shall be at least forty-five (45) days from the
date the notice is mailed to the members. If the request is approved by
the Board, the city or county shall become a member of CVCEA under
Coachella Valley Community Choice Aggregation 3
Draft JPA Agreement, May 2017
the terms and conditions set forth by the Board and upon approval and
execution of this Agreement by the requesting city or county.
2.5 Powers. CVCEA shall have all powers common to the Parties and such
additional powers accorded to it by law. CVCEA is authorized, in its own name,
to exercise all powers and do all acts necessary and proper to carry out the
provisions of this Agreement and fulfill its purposes, including, but not limited to,
each of the following powers, subject to the voting requirements set forth in
Section 3.15:
2.5.1 to make and enter into contracts;
2.5.2 to employ agents and employees, including but not limited to an
Executive Director;
2.5.3 to acquire, contract, manage, maintain, and operate any buildings,
infrastructure, works, or improvements;
2.5.4 to acquire property by eminent domain, or otherwise, except as limited
under Section 6508 of the Act, and to hold or dispose of any property;
however, CVCEA shall not exercise the power of eminent domain within
the jurisdiction of a Party over its objection without first meeting and
conferring in good faith.
2.5.5 to lease any property;
2.5.6 to sue and be sued in its own name;
2.5.7 to incur debts, liabilities, and obligations, including but not limited to loans
from private lending sources pursuant to its temporary borrowing powers
such as Government Code Sections 53850 et seq. and authority under
the Act;
2.5.8 to form subsidiary or independent corporations or entities if necessary, to
carry out energy supply and energy conservation programs at the lowest
possible cost or to take advantage of legislative or regulatory changes;
2.5.9 to issue revenue bonds and other forms of indebtedness;
2.5.10 to apply for, accept, and receive all licenses, permits, grants, loans or
other aids from any federal, state, or local public agency;
2.5.11 to submit documentation and notices, register, and comply with orders,
tariffs and agreements for the establishment and implementation of the
CCA Program and other energy programs;
2.5.12 to adopt Operating Rules and Regulations;
2.5.13 to make and enter into service agreements relating to the provision of
services necessary to plan, implement, operate and administer the CCA
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Draft JPA Agreement, May 2017
Program and other energy programs, including the acquisition of electric
power supply and the provision of retail and regulatory support services;
and
2.5.14 to permit additional Parties to enter into this Agreement after the Effective
Date and to permit another entity authorized to be a community choice
aggregator to designate CVCEA to act as the community choice energy
aggregator on its behalf.
2.6 Limitation on Powers. As required by Government Code Section 6509, the
power of CVCEA is subject to the restrictions upon the manner of exercising
power possessed by the City of (insert name of one participating city).
ARTICLE 3: GOVERNANCE AND INTERNAL ORGANIZATION
3.1 Governing Body. CVCEA shall be governed by a legislative body known as the
Board of Directors ("Board"). The initial Board shall consist of one (1) director
appointed by each of the initial members. Each Director shall serve at the
pleasure of the governing board of the Party appointing such Director, and may
be removed as Director by such governing board at any time. If at any time a
vacancy occurs on the Board, a replacement shall be appointed to fill the position
of the previous Director within 60 days of the date that such position becomes
vacant. Directors shall be elected officials or senior staff of the appointing Party
that is the signatory to this Agreement. Each Party may appoint an alternate to
serve in the absence of its Director. Alternates may be either elected officials or
senior staff of the appointing Party that is the signatory to this Agreement. The
Board shall exercise all powers and conduct all business of CVCEA, either
directly or by delegation to other bodies or persons pursuant to this Agreement.
If additional cities or counties join CVCEA, as set forth in section 2.4, each city or
county that becomes a member of CVCEA shall be entitled to one (1) director
and one (1) alternate appointed as set forth above.
Ex Officio Directors. The Board may appoint ex officio members of the Board.
Ex officio directors shall receive all meeting notices, shall have the right to
participate in Board discussions and the right to place items on the agenda but
shall not be counted towards a quorum and shall have no vote.
3.2 Regular Board Meetings. The Board shall hold at least one regular annual
meeting and shall provide for such other regular meetings as it deems
necessary. Meetings of the Board shall be held at such locations in the
Coachella Valley or Palo Verde Valley, and at such times as may be designated
from time to time by the Board.
3.3 Special Meetings of the Board. Subject to all noticing requirements of The Brown
Act, special meetings of the Board may be called by the Chair, to be held at such
times and places within the Coachella Valley or Palo Verde Valley as may be
ordered by the Chair. A majority of the Board may also call a special meeting for
any purpose.
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Draft JPA Agreement, May 2017
3.4 Chair and Vice -Chair. The Board shall annually elect from its membership a
Chair and Vice -Chair to serve for a one-year term.
3.5 Conduct of Meetings. The Chair or, in the absence of the Chair, the Vice -Chair,
shall preside at all meetings of the Board.
3.6 Resignation of a Director. Any Director may resign effective on giving written
notice to the Board and the other Members, unless the notice specifies a later
time for the effectiveness of such resignation. A successor shall be appointed by
the affected Member as provided for in this Agreement.
3.7 Quorum. Except as otherwise provided in this Agreement, CVCEA shall act only
upon a majority of a quorum of the Board. A quorum of any meeting of Directors
shall consist of a majority of the Directors then designated by and serving on
behalf of the Members. Ex officio, non -voting Participants shall not be included
when calculating the number of Directors necessary to constitute a quorum or the
number of votes necessary to approve an action. In the event that a Member
has failed to designate a Director, or a Member's designated Director has died.
resigned, left office, been terminated or is otherwise unwilling or unable to act as
the designating Member's representative, a replacement Director not yet been
designated, and there is no designated alternate, such that a Member has no
duly acting representative on the Board, then that Member's vacant Board
position shall not be included when calculating the number of Directors
necessary to constitute a quorum or the number of votes necessary to approve
an action. Except as otherwise provided in this Agreement, every act or decision
made by a majority of the Directors present at a meeting duly held at which a
quorum is present is the act of the Board. In the absence of a quorum, any
meeting of the Board may be adjourned from time to time by a vote of the
majority present, but no other business may be transacted except as provided for
in this Section.
3.8 Other Officers. The Executive Director of CVCEA shall be the secretary of
CVCEA, or as otherwise determined by the Board. Any officer, employee or
agent of any Member of CVCEA may also be an officer, employee, or agent of
any of the Members. CVCEA shall have the power to appoint such additional
officers and to employ such employees and assistants as may be appropriate.
Each and all of said officers, employees and assistants shall serve at the
pleasure of CVCEA and shall perform such duties and shall have such powers as
CVCEA may, from time to time, determine. Any officer may resign at any time by
giving written notice to the secretary. Any such resignation shall be effective
upon receipt of such notice or at any later time specified in the notice. Officers
shall assume the duties of their offices immediately after their appointment and
shall hold office until their successors are appointed, except in the case of their
removal or resignation. Vacancies of officers shall be filled by appointment of the
Board and such appointee shall hold office until the appointment of his or her
successor.
Coachella Valley Community Choice Aggregation 6
Draft JPA Agreement, May 2017
3.9 Minutes. The secretary of CVCEA shall cause to be kept minutes of regular,
adjourned regular and special meetings of the Board. The secretary shall cause
a copy of all minutes, along with copies of all ordinances and resolutions, to be
forwarded to each of the Parties hereto.
3.10 Rules. A majority of Directors may adopt rules governing meetings if not
inconsistent or in conflict with this Agreement. In the absence of rules adopted
by the Directors, Roberts' Rules of Order, as they may be amended from time to
time, shall govern the meetings of the Board in so far as they are not inconsistent
or in conflict with this Agreement or any CVCEA bylaws.
3.11 Powers and Functions of the Board. The Board shall exercise general
governance and oversight over the business and activities of CVCEA, consistent
with this Agreement and applicable law. The Board shall provide general policy
guidance to the CCA Program. Board approval shall be required for any of the
following actions:
3.11.1 The issuance of bonds or any other financing even if program
revenues are expected to pay for such financing.
3.11.2 The appointment or termination of the Executive Officer and General
Counsel.
3.11.3 The appointment or removal of officers described in Section 3.17,
subject to Section 3.17.1.
3.11.4 Any decision to provide retirement or post -retirement benefits that
are defined benefit programs, subject to the requirements of section
5.3.4, below.
3.11.5 The adoption of the Annual Budget.
3.11.6 The adoption of an ordinance.
3.11.7 The approval of agreements, except as provided by Section 3.12.
3.11.8 The initiation or resolution of claims and litigation where CVCEA will
be the defendant, plaintiff, petitioner, respondent, cross complainant
or cross petitioner, or intervenor; provided, however, that the
Executive Officer or General Counsel, on behalf of CVCEA, may
intervene in, become a party to, or file comments with respect to any
proceeding pending at the California Public Utilities Commission, the
Federal Energy Regulatory Commission, or any other administrative
agency, without approval of the Board as long as such action is
consistent with any adopted Board policies.
3.11.9 The setting of rates for power sold by CVCEA and the setting of
charges for any other category of service provided by CVCEA.
3.11.10 Termination of the CCA Program.
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Draft JPA Agreement, May 2017
3.12 Executive Officer. The Board of Directors shall have the authority to appoint an
Executive Officer for CVCEA, who shall be responsible for the day-to-day
operation and management of CVCEA and the CCA Program. The Executive
Officer may be retained under contract with CVCEA, be an employee of CVCEA,
be an employee of CVAG, or be an employee of one of the Parties. The
Executive Officer shall report directly to the Board and serve as staff to CVCEA.
Except as otherwise set forth in this Agreement, the Executive Officer may
exercise all powers of CVCEA, including the power to hire, discipline and
terminate employees as well as the power to approve any agreement if the total
amount payable under the agreement is less than $100,000 in any fiscal year, or
such higher amount as may be established by the Board from time to time, by
resolution of the Board, except the powers specifically set forth in Section 3.11 or
those powers which by law must be exercised by the Board of Directors. The
Executive Officer shall serve at the pleasure of the Board.
3.13 CVCEA Staff. CVCEA may contract with CVAG for staff services, retain its own
staff, or contract with another entity for services. Unless other employment is
approved by the Commission, the CVCEA Executive Director may utilize CVAG
staff as may be necessary to accomplish the purposes of CVCEA. CVAG staff
time, as well as office expenses, direct and indirect overhead, shall be charged to
CVCEA utilizing direct billing and other accounting practices that provide for a
clear separation of funds.
3.14 CVAG's Participation. CVAG shall have the following powers and duties:
3.14.1 To provide, under contract with CVCEA, administrative services
required by CVCEA during the first five (5) years of the implementation
of the CVCEA; and thereafter as the administrative services contract
may be renewed from time to time by CVCEA;
3.14.2 To empower its Executive Director to serve as Secretary of CVCC;
3.14.3 To exercise such other powers and duties as the Commission deems
necessary to achieve the purposes of this Agreement.
3.15 Commissions, Boards, and Committees.
3.15.1 The Board may establish commissions, boards or committees, including
but not limited to a standing executive committee of the Board, as the
Board deems appropriate, to assist the Board in carrying out its authority
and functions under this Agreement and may delegate authority to such
commission, board or commission as set forth in a Board resolution.
Such delegation may be modified, amended or revoked at any time the
Board may deem appropriate. Any decision delegated pursuant to this
subsection may be appealed to the Board, as the Board so determines.
3.15.2 The Board may also establish any advisory commissions, boards, and
committees as the Board deems appropriate to assist the Board in
carrying out its functions and implementing the CCA Program, other
energy programs and the provisions of this Agreement.
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Draft JPA Agreement, May 2017
3.15.3 Any board, commission or committee formed under this section shall
comply with the requirements of the Ralph M. Brown Act. The Board
may establish rules, regulations, policies, bylaws or procedures to govern
any such commissions, boards, or committees, and shall determine
whether members shall be compensated or entitled to reimbursement for
expenses.
3.16 Director Compensation. Directors shall serve without compensation from
CVCEA. However, Directors may be compensated by their respective appointing
authorities. The Board, however, may adopt by resolution a policy relating to the
reimbursement by CVCEA of expenses or other costs incurred by Directors.
3.17 Voting. In general, as described below in Section 3.15.3, action by CVCEA
Board will be taken solely by a majority vote of the total number of Directors
present. In addition, as described below in Section 3.15.4, upon request of two
(2) Directors, a weighted vote by shares will also be conducted. When such a
request is made, an action must be approved by both a majority vote of Directors
present and a majority of the Weighted Voting Shares present. No action may be
approved solely by a majority vote by shares. The voting shares of Directors and
approval requirements for actions of the Board shall be as follows:
3.17.1 Weighted Voting Shares
Each member agency shall have a Voting Share as determined by the
following formulas:
(a) Pro Rata Votina Share. Each Member shall have an equal voting
share determined by the following formula: ([1 / total number of
Members] multiplied by 1/2 ), expressed as a percentage to two
decimal places; and
(b) Annual Energy Voting Share. Each Member shall have an
additional voting share determined by the following formula:
([Total Annual Energy Use (expressed in MWh) in the Member's
jurisdiction / combined Total Annual Energy Use in all Members'
jurisdictions] multiplied by expressed as a percentage to two
decimal places. Annual Energy Use values are to be based on
total CCA-related retail energy sales of all electric customer
accounts as of December 31 of the most recent year for which
such data is available. In the absence of actual data, the Board
may approve the use of reasonably estimated Annual Energy Use
values.
(c) Weighted Voting Share. Each Member's Weighted Voting Share
shall be the respective sum of the values computed in (a) and (b)
above, expressed as a percentage to two decimal places. The
combined total Weighted Voting Shares of all Members is 100.00
percent.
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Draft JPA Agreement, May 2017
3.17.2 Exhibit Showing Weighted Voting Shares. The initial Weighted Voting
Shares are set forth in Exhibit D based on data available as of the
Effective Date of this Agreement. Exhibit D shall be revised no less than
annually as necessary to account for changes in the number of Members
and or changes in the Members' annual MWh retail energy usage.
Adjustments to Exhibit D shall be approved by the Board.
3.17.3 Action Approval Requirements. Except as provided in Sections 3.15
above and 3.15.4 and 3.15.5 below, actions of the Board shall require the
affirmative vote of a majority of Directors present at the meeting.
3.17.4 Option for Approval by Voting Shares. Notwithstanding Section 3.15.3,
any two (2) Directors present at a meeting may demand that approval of
any matter related to the CCA Program be determined on the basis of
both Weighted Voting Shares and by the affirmative vote of a majority of
Directors present at the meeting. If two Directors make such a demand
with respect to approval of any such matter, then approval of such matter
shall require the affirmative vote of a majority of Directors present at the
meeting and the affirmative vote of Directors having a majority of
Weighted Voting Shares present, as determined by Section 3.15.1 except
as provided in Section 3.15.5.
3.17.5 Special Voting Requirements for Certain Matters.
(a) Two -Thirds and Weighted Voting Approval Requirements Relating
to Sections 6.2 and 7.4. Action of the Board on the matters set
forth in Section 6.2 (involuntary termination of a Member), or
Section 7.4 (amendment of this Agreement) shall require the
affirmative vote of at least two-thirds of Directors present;
provided, however, that (i) notwithstanding the foregoing, any
two (2) Directors present at a meeting may demand that the vote
be determined on the basis of both Weighted Voting Shares and
by the affirmative vote of Directors present, and if any two (2)
Directors make such a demand, then approval shall require the
affirmative vote of both at least two-thirds of Directors present and
the affirmative vote of Directors having at least two-thirds of the
Weighted Voting Shares present, as determined by Section
3.15.1; and (ii) for votes to involuntarily terminate a Member under
Section 6.2, the Director for the Member subject to involuntary
termination may not vote, and the number of Directors constituting
two-thirds of all Directors, and the Weighted Voting Share of each
Member shall be recalculated as if the Member subject to possible
termination were not a Member.
(b) Seventy -Five Percent Special Voting Requirements for Eminent
Domain and Contributions or Pledge of Assets.
(i)
A decision to exercise the power of eminent domain on
behalf of CVCEA to acquire any property interest other
than an easement, right-of-way, or temporary construction
Coachella Valley Community Choice Aggregation 10
Draft JPA Agreement, May 2017
easement shall require a vote of at least 75% of all
Directors.
(ii) The imposition on any Member of any obligation to make
contributions or pledge assets as a condition of continued
participation in the CCA Program shall require a vote of at
least 75% of all Directors and the approval of the
governing boards of the Members which are being asked
to make such contribution or pledge.
(iii) Notwithstanding the foregoing, any two (2) Directors
present at the meeting may demand that a vote under
subsections (i) or (ii) be determined on the basis of
Weighted Voting Shares and by the affirmative vote of
Directors, and if any two (2) Directors make such a
demand, then approval shall require both the affirmative
vote of at least 75% of Directors present and the
affirmative vote of Directors having at least 75% of the
Weighted Voting Shares present, as determined by
Section 3.15.1. For purposes of this section, "imposition
on any Member of any obligation to make contributions or
pledge assets as a condition of continued participation in
the CCA Program" does not include any obligations of
a withdrawing or terminated Member imposed under
Section 6.3.
3.18 Meetings and Special Meetings of the Board. The Board shall hold at least
four (4) regular meetings per year, but the Board may provide for the holding of
regular meetings at more frequent intervals. The date, hour and place of each
regular meeting shall be fixed by resolution or ordinance of the Board. Regular
meetings may be adjourned to another meeting time. Special and Emergency
Meetings of the Board may be called in accordance with the provisions of
California Government Code Sections 54956 and 54956.5. Directors may
participate in meetings telephonically, with full voting rights, only to the extent
permitted by law. All meetings shall be conducted in accordance with the
provisions of the Ralph M. Brown Act (California Government Code Sections
54950 et seq.).
3.19 Selection of Board Officers.
3.19.1 Chair and Vice Chair. The Directors shall select, from among
themselves, a Chair, who shall be the presiding officer of all Board
meetings, and a Vice Chair, who shall serve in the absence of the Chair.
The Chair and Vice Chair shall serve at the pleasure of the Board. There
shall be no limit on the number of terms held by either the Chair or Vice
Chair. The office of either the Chair or Vice Chair shall be declared
vacant and a new selection shall be made if:
Coachella Valley Community Choice Aggregation 11
Draft JPA Agreement, May 2017
(a) the person serving dies, resigns, or the Member that the person
represents removes the person as its representative on the Board,
or
(b) the Member that he or she represents withdraws from CVCEA
pursuant to the provisions of this Agreement.
3.19.2 Secretary. The Board shall appoint a Secretary, who need not be a
member of the Board, who shall be responsible for keeping the minutes of
all meetings of the Board and all other official records of CVCEA.
3.19.3 Treasurer and Auditor. The Treasurer shall function as the combined
offices of Treasurer and Auditor pursuant to Government code section
6505.6 and shall strictly comply with the statutes related to the duties and
responsibilities specified in Section 65.5 of the Act. The Treasurer for
CVCEA shall be the depository and have custody of all money of CVCEA
from whatever source and shall draw all warrants and pay demands
against CVCEA as approved by the Board. The Treasurer shall cause an
independent audit(s) of the finances of CVCEA to be made by a certified
public accountant, or public accountant, in compliance with Section 6505
of the Act. The Treasurer shall report directly to the Board and shall
comply with the requirements of treasurers of incorporated municipalities.
The Board may transfer the responsibilities of Treasurer to any person or
entity as the law may provide at the time. The duties and obligations of
the Treasurer are further specified in Article 5. The Treasurer shall serve
at the pleasure of the Board.
3.20 Administrative Services Provider. The Board may appoint one or more
administrative services providers to serve as CVCEA's agent for planning,
implementing, operating and administering the CCA Program, and any other
program approved by the Board. The appointed administrative services provider
may be one of the Members. A separate services agreement shall set forth the
terms and conditions by which the appointed administrative services provider(s)
shall perform or cause to be performed tasks necessary for planning,
implementing, operating and administering the CCA Program and other approved
programs. Any such services agreement shall set forth the terms and the
circumstances under which the services agreement may be terminated by
CVCEA. This section shall not in any way be construed to limit the discretion of
CVCEA to hire its own employees to administer all or any portion of the CCA
Program or any other program.
ARTICLE 4: IMPLEMENTATION ACTION AND AUTHORITY DOCUMENTS
4.1 Preliminary Implementation of the CCA Program.
4.1.1 Enabling Ordinance. To be eligible to participate in the CCA Program,
each Party must adopt an ordinance in accordance with Public Utilities
Code Section 366.2(c)(12) for the purpose of specifying that the Party
Coachella Valley Community Choice Aggregation 12
Draft JPA Agreement, May 2017
intends to implement a CCA Program by and through its participation in
CVCEA.
4.1.2 Implementation Plan. CVCEA shall cause to be prepared an
Implementation Plan meeting the requirements of Public Utilities Code
Section 366.2 and any applicable Public Utilities Commission regulations
as soon after the Effective Date as reasonably practicable. The
Implementation Plan shall not be filed with the Public Utilities Commission
until it is approved by the Board in the manner provided by Section 3.15.
4.1.3 Termination of CCA Program. Nothing contained in this Article or this
Agreement shall be construed to limit the discretion of CVCEA to
terminate the implementation or operation of the CCA Program at any
time in accordance with any applicable requirements of state law.
4.2 Authority Documents. The Parties acknowledge and agree that the affairs of
CVCEA will be implemented through various documents duly adopted by the
Board through Board resolution. The Parties agree to abide by and comply with
the terms and conditions of all such documents that may be adopted by the
Board, subject to the Parties' right to withdraw from CVCEA as described in
Article 6.
ARTICLE 5: FINANCIAL PROVISIONS
5.1 Fiscal Year. CVCEA's fiscal year shall be 12 months commencing July 1 and
ending June 30. The fiscal year may be changed by Board resolution.
5.2 Depository.
5.2.1 All funds of CVCEA shall be held in separate accounts in the name of
CVCEA and not commingled with funds of any Party or any other person
or entity.
5.2.2 All funds of CVCEA shall be strictly and separately accounted for, and
regular reports shall be rendered of all receipts and disbursements, at
least quarterly during the fiscal year. The books and records of CVCEA
shall be open to inspection by the Parties at all reasonable times. The
Board shall contract with a certified public accountant or public
accountant to make an annual audit of the accounts and records of
CVCEA, which shall be conducted in accordance with the requirements of
Section 6505 of the Act.
5.2.3 All expenditures shall be made in accordance with the approved budget
and upon the approval of any officer so authorized by the Board in
accordance with its Operating Rules and Regulations. The Treasurer
shall draw checks or warrants or make payments by other means for
claims or disbursements not within an applicable budget only upon the
prior approval of the Board.
Coachella Valley Community Choice Aggregation 13
Draft JPA Agreement, May 2017
5.3 Budget and Recovery of Costs.
5.3.1 Budget. The initial budget shall be approved by the Board. The Board
may revise the budget from time to time as may be reasonably necessary
to address contingencies and unexpected expenses. All subsequent
budgets of CVCEA shall be approved by the Board in accordance with
the Operating Rules and Regulations.
5.3.2 Funding of Initial Costs. The Parties acknowledge that implementing the
CCA Program will require some form of funding either provided by all or
some of the Parties or attained in some other manner. If the CCA
Program becomes operational, these Initial Costs paid by such Parties or
attained from other sources shall be included in the customer charges for
electric services as provided by Section 5.3.3 to the extent permitted by
law, and respective Parties or other sources shall be reimbursed from the
payment of such charges by customers of CVCEA. CVAG shall also be
entitled to reimbursement for Initial Costs. CVCEA may establish a
reasonable time period over which such costs are recovered and repaid
to respective Parties or other sources. In the event that the CCA
Program does not become operational, respective Parties shall not be
entitled to any reimbursement of the funded Initial Costs from CVCEA or
any Party. If any of the initial member agencies or other sources assists
in funding initial costs, they shall also be entitled to reimbursement
pursuant to this section. The Board shall approve the manner of funding
and repayment of initial CCA program costs which may include
reasonable interest charges.
5.3.3 CCA Program Costs. The Parties desire that all costs incurred by
CVCEA that are directly or indirectly attributable to the provision of
electric, conservation, efficiency, incentives, financing, or other services
provided under the CCA Program, including but not limited to the
establishment and maintenance of various reserves and performance
funds and administrative, accounting, legal, consulting, and other similar
costs, shall be recovered through charges to CCA customers receiving
such electric services, or from revenues from grants or other third -party
sources.
5.3.4 Employee Retirement and Post -retirement Benefits. Should the Board
determine to provide a defined benefits retirement benefit to CVCEA
employees (such as PERS) or other post -retirements benefits that would
be within an Other Post -Retirement Benefits (OPEB) obligation to CVCEA
employees, prior to providing such benefit(s) to any employee, the Board
shall (1) obtain a third party independent actuarial report on the long term
costs of the benefit or benefits, (2) adopt a funding plan for the payment
of both current and Tong -term costs that provides for the payment of all
such costs on a current, pay-as-you-go, basis and eliminates any known
or reasonably anticipated unfunded liability associated with the benefit(s)
and (3) notice all Member agencies of the pending consideration of the
benefit(s) together with the actuarial report and funding plan, for at least
Coachella Valley Community Choice Aggregation 14
Draft JPA Agreement, May 2017
sixty (60) days and obtain the consent, by resolution of not less than 75
percent of the then current Member agency boards or councils.
ARTICLE 6: WITHDRAWAL AND TERMINATION
6.1 Withdrawal.
6.1.1 Right to Withdraw. A Party may withdraw its participation in the CCA
Program, effective as of the beginning of CVCEA's next fiscal year, by
giving no less than 6 months advance written notice of its election to do
so, which notice shall be given to CVCEA and each Party. Withdrawal of
a Party shall require an affirmative vote of the Party's governing board.
6.1.2 Right to Withdraw After Amendment. Notwithstanding Section 6.1.1, a
Party may withdraw its membership in CVCEA following an amendment
to this Agreement adopted by the Board which the Party's Director voted
against, provided such notice is given in writing within thirty (30) days
following the date of the vote. Withdrawal of a Party shall require an
affirmative vote of the Party's governing board and shall not be subject to
the six month advance notice provided in Section 6.1.1. In the event of
such withdrawal, the Party shall be subject to the provisions of Section
6.3.
6.1.3 The Right to Withdraw Prior to Program Launch. After receiving bids from
power suppliers, CVCEA shall provide to the Parties the report from the
electrical utility consultant(s) retained by CVCEA that compares the total
estimated electrical rates that CVCEA will be charging to customers as
well as the estimated greenhouse gas emissions rate and the amount of
estimated renewable energy used with that of the incumbent utility (SCE).
If the report provides that CVCEA is unable to provide total electrical
rates, as part of its baseline offering, to customers that are equal to or
lower than the incumbent utility or to provide power in a manner that has
a lower greenhouse gas emissions rate or uses more renewable energy
than the incumbent utility, a Party may immediately withdraw its
membership in CVCEA without any further financial obligation, as long as
the Party provides written notice of its intent to withdraw to CVCEA Board
no more than fifteen (15) days after receiving the report. Any withdrawing
Party shall not be entitled to any return of funds it may have provided to
CVCEA, provided, however, that if, after the program is launched there
are unobligated and unused funds, the withdrawing member shall be
refunded its pro rata share of the unobligated and unused funds.
6.1.4 Continuing Financial Obligation; Further Assurances. Except as provided
by Section 6.1.3, a Party that withdraws its participation in the CCA
Program may be subject to certain continuing financial obligations, as
described in Section 6.3. Each withdrawing Party and CVCEA shall
execute and deliver all further instruments and documents, and take any
further action that may be reasonably necessary, as determined by the
Board, to effectuate the orderly withdrawal of such Party from
participation in the CCA Program.
Coachella Valley Community Choice Aggregation 15
Draft JPA Agreement, May 2017
6.2 Involuntary Termination of a Party. Participation of a Party in the CCA program
may be terminated for material non-compliance with provisions of this Agreement
or any other agreement relating to the Party's participation in the CCA Program
upon a vote of Board members as provided in Section 3.15.5. Prior to any vote
to terminate participation with respect to a Party, written notice of the proposed
termination and the reason(s) for such termination shall be delivered to the Party
whose termination is proposed at least thirty (30) days prior to the regular Board
meeting at which such matter shall first be discussed as an agenda item. The
written notice of proposed termination shall specify the particular provisions of
this Agreement or other agreement that the Party has allegedly violated. The
Party subject to possible termination shall have the opportunity at the next
regular Board meeting to respond to any reasons and allegations that may be
cited as a basis for termination prior to a vote regarding termination. A Party that
has had its participation in the CCA Program terminated may be subject to
certain continuing liabilities, as described in Section 6.3.
6.3 Continuing Financial Obligations; Refund. Except as provided by Section 6.1.3,
upon a withdrawal or involuntary termination of a Party, the Party shall remain
responsible for any claims, demands, damages, or other financial obligations
arising from such Party's membership or participation in the CCA Program
through the effective date of its withdrawal or involuntary termination, it being
agreed that the Party shall not be responsible for any new financial obligations
arising after the date of the Party's withdrawal or involuntary termination. Claims,
demands, damages, or other financial obligations for which a withdrawing or
terminated Party may remain liable include, but are not limited to, losses from the
resale of power contracted for by CVCEA to serve the Party's load and any
unfunded liabilities such as unfunded retirement contributions or costs and any
unfunded post -retirement benefits. With respect to such financial obligations,
upon notice by a Party that it wishes to withdraw from the CCA Program, CVCEA
shall notify the Party of the minimum waiting period under which the Party would
have no costs for withdrawal if the Party agrees to stay in the CCA Program for
such period. The waiting period will be set to the minimum duration such that
there are no costs transferred to remaining ratepayers. If the Party elects to
withdraw before the end of the minimum waiting period, the charge for exiting
shall be set at a dollar amount that would offset actual costs to the remaining
ratepayers, and may not include punitive charges that exceed actual costs. In
addition, such Party shall also be responsible for any costs or obligations
associated with the Party's participation in any program in accordance with the
provisions of any agreements relating to such program provided such costs or
obligations were incurred prior to the withdrawal of the Party. CVCEA may
withhold funds otherwise owing to the Party or may require the Party to deposit
sufficient funds with CVCEA, as reasonably determined by CVCEA and approved
by a vote of the Board, to cover the Party's financial obligations for the costs
described above. Any amount of the Party's funds held on deposit with CVCEA
above that which is required to pay any existing or ongoing financial obligations
shall be returned to the Party. If there is a disagreement related to the charge(s)
for exiting, the Parties shall attempt to settle the amount through mediation or
other dispute resolution process as authorized by section 7.1. If the dispute is
not resolved, the Parties may agree to proceed to arbitration, or any party may
Coachella Valley Community Choice Aggregation 16
Draft JPA Agreement, May 2017
seek judicial review. The liability of any Party under this section 6.3 is subject and
subordinate to the provisions of Section 2.2, and nothing in this section 6.3 shall
reduce, impair, or eliminate any immunity from liability provided by Section 2.2.
6.4 Mutual Termination. This Agreement may be terminated by mutual agreement of
all the Parties; provided, however, the foregoing shall not be construed as limiting
the rights of a Party to withdraw its participation in the CCA Program, as
described in Section 6.1.
6.5 Disposition of Property upon Termination of Authority. Upon termination of this
Agreement, any surplus money or assets in possession of CVCEA for use under
this Agreement, after payment of all liabilities, costs, expenses, and charges
incurred under this Agreement and under any program documents, shall be
returned to the then -existing Parties in proportion to the contributions made by
each.
ARTICLE 7: MISCELLANEOUS PROVISIONS
7.1 Dispute Resolution. The Parties and CVCEA shall make reasonable efforts to
informally settle all disputes arising out of or in connection with this Agreement.
Should such informal efforts to settle a dispute, after reasonable efforts, fail, the
dispute shall be mediated in accordance with policies and procedures
established by the Board.
7.2 Liability of Directors, Officers, and Employees. The Directors, officers, and
employees of CVCEA shall use ordinary care and reasonable diligence in the
exercise of their powers and in the performance of their duties pursuant to this
Agreement. No current or former Director, officer, or employee will be
responsible for any act or omission by another Director, officer, or employee.
CVCEA shall defend, indemnify and hold harmless the individual current and
former Directors, officers, and employees for any acts or omissions in the scope
of their employment or duties in the manner provided by Government Code
Sections 995 et seq. Nothing in this section shall be construed to limit the
defenses available under the law, to the Parties, CVCEA, or its Directors,
officers, or employees
7.3 Indemnification of Parties. CVCEA shall acquire such insurance coverage as is
necessary to protect the interests of CVCEA, the Parties, and the public.
Subject to the provisions of Section 7.4 and provided that a Party has acted in
good faith and in accordance with this Agreement, CVCEA shall defend with
counsel acceptable to said Party, indemnify and hold such Party free and
harmless from any loss, liability or damage incurred or suffered by such Party by
reason of litigation arising from or as a result of any of the following: the Party's
participation in the JPA; action taken to approve and/or implement the CCA; or
any other act performed or to be performed by the Party pursuant to this
Agreement; provided, however that such indemnification or agreement to hold
harmless pursuant to this section shall be recoverable only out of CVCEA assets
and not from other Parties. To the extent CVCEA's assets are insufficient to
satisfy its obligations under this Section, any member Agency forced to expend
Coachella Valley Community Choice Aggregation 17
Draft JPA Agreement, May 2017
its own funds to satisfy what would otherwise be CVCEA's obligations shall be
entitled to reimbursement from CVCEA.
7.4 Limitations on Liability. The Parties acknowledge that Section 895.2 of the
California Government Code provides that a Member is jointly and severally
liable for the torts of the joint powers agency, but that Sections 895.4 and 895.6
of that Code allow the members of a joint powers agency to contractually agree
to indemnity and contribution provisions that allow such liability to be apportioned
among the members based on their respective degree of fault giving rise to the
liability. The Parties further acknowledge that they have agreed at Section 7.3
above to indemnify and defend those Member agencies against Toss, liability or
damage suffered by a Member Agency individually as a result of that Agency's
good faith acts taken pursuant to this Agreement. Now, therefore, in
contemplation of such authority, the Parties agree that, as among themselves,
each shall assume that portion of the liability imposed upon CVCEA or any of its
Members, officers, agents or employees by law for injury caused by any
negligent or wrongful act or omission occurring during the performance of this
Agreement that is not covered by insurance, that is determined by the CVCEA to
be that Member's proportionate share accruing during the Member's period of
participation in CVCEA. Said determination shall be by three -fourths vote of the
Member Agencies, meaning an affirmative vote of three -fourths of the total
number of Member Agencies. The Members acknowledge that, given the
possible variables, determination of a proper apportionment may be difficult.
Therefore, subject only to arbitration rights set out at Section 6.3, the Members
agree that the Board's good faith determination of a fair apportionment shall be
final, binding and enforceable as a term of this Agreement. Each Member shall to
the extent provided herein indemnify and hold harmless the other Members for
any loss, costs or expenses that may be imposed on such other Members solely
by virtue of Section 895.2.
7.5 Amendment of this Agreement. This Agreement may not be amended except by
a written amendment approved by a vote of Board members as provided in
Section 3.15.5. CVCEA shall provide written notice to all Parties of amendments
to this Agreement, including the effective date of such amendments, at least 30
days prior to the date upon which the Board votes on such amendments.
Exhibits A through E of this Agreement may be revised from time to time by
Board vote and copies of such revised exhibits shall be distributed to all Parties.
7.6 Assignment. Except as otherwise expressly provided in this Agreement, the
rights and duties of the Parties may not be assigned or delegated without the
advance written consent of all of the other Parties, and any attempt to assign or
delegate such rights or duties in contravention of this Section 7.5 shall be null
and void. This Agreement shall inure to the benefit of, and be binding upon, the
successors and assigns of the Parties. This Section 7.5 does not prohibit a Party
from entering into an independent agreement with another agency, person, or
entity regarding the financing of that Party's contributions to CVCEA, or the
disposition of proceeds which that Party receives under this Agreement, so long
as such independent agreement does not affect, or purport to affect, the rights
and duties of CVCEA or the Parties under this Agreement.
Coachella Valley Community Choice Aggregation 18
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7.7 Severability. If one or more clauses, sentences, paragraphs or provisions of this
Agreement shall be held to be unlawful, invalid or unenforceable, it is hereby
agreed by the Parties, that the remainder of the Agreement shall not be affected
thereby. Such clauses, sentences, paragraphs or provision shall be deemed
reformed so as to be lawful, valid and enforced to the maximum extent possible.
7.8 Further Assurances. Each Party agrees to execute and deliver all further
instruments and documents, and take any further action that may be reasonably
necessary, to effectuate the purposes and intent of this Agreement.
7.9 Execution by Counterparts. This Agreement may be executed in any number of
counterparts, and upon execution by all Parties, each executed counterpart shall
have the same force and effect as an original instrument and as if all Parties had
signed the same instrument. Any signature page of this Agreement may be
detached from any counterpart of this Agreement without impairing the legal
effect of any signatures thereon, and may be attached to another counterpart of
this Agreement identical in form hereto but having attached to it one or more
signature pages.
7.10 Parties to be Served Notice. Any notice authorized or required to be given
pursuant to this Agreement shall be validly given if served in writing either
personally, by deposit in the United States mail, first class postage prepaid with
return receipt requested, or by a recognized courier service. Notices given (a)
personally or by courier service shall be conclusively deemed received at the
time of delivery and receipt and (b) by mail shall be conclusively deemed given
48 hours after the deposit thereof (excluding Saturdays, Sundays and holidays) if
the sender receives the return receipt. All notices shall be addressed to the
office of the clerk or secretary of CVCEA or Party, as the case may be, or such
other person designated in writing by CVCEA or Party. Notices given to one
Party shall be copied to all other Parties. Notices given to CVCEA shall be
copied to all Parties.
7.11 No Third Party Beneficiaries. This Agreement shall reflect the Parties' rights and
obligations as by and among themselves. Nothing herein shall create any right in
any third party to enforce any right or obligation set out in this Agreement as
against any Party hereto.
Coachella Valley Community Choice Aggregation 19
Draft JPA Agreement, May 2017
EXHIBIT A
DEFINITIONS
1. "Act" means the Joint Exercise of Powers Act of the State of California (Government
Code Section 6500 et sea.)
"Administrative Services Agreement" means an agreement or agreements entered into
after the Effective Date by CVCEA with one or more entity that will perform tasks
necessary for planning, implementing, operating and/or administering the CCA Program,
or any portion of the CCA Program or any other energy programs adopted by CVCEA.
3. "Agreement" means this Joint Powers Agreement.
4. "Annual Energy Use" has the meaning given in Section 3.15.1(b).
5. "Authority" means the CVCEA.
6. "Authority Document(s)" means document(s) duly adopted by the Board by resolution or
motion implementing the powers, functions, and activities of CVCEA, including but not
limited to the Operating Rules and Regulations, the annual budget, and plans and
policies.
7. "Board" means the Board of Directors of CVCEA.
8. "CCA" or "Community Choice Aggregation" means an electric service option available to
cities and counties pursuant to Public Utilities Code Section 366.2.
9. "CCA Program" means CVCEA's program relating to CCA that is principally described in
Article 2 of this Agreement.
10. "CVAG" shall mean the Coachella Valley Association of Governments.
11. "Director" means a member of the Board of Directors appointed by and representing a
Party.
12. "Effective Date" means , 2017 or when initial members of CVCEA
execute this Agreement, whichever occurs later, as further described in Section 2.1.
13. "Implementation Plan" means the plan generally described in Section 4.1.2 of this
Agreement that is required under Public Utilities Code Section 366.2 to be filed with the
California Public Utilities Commission for the purpose of describing a proposed CCA
Program.
14. "Initial Costs" means all costs incurred by the CVCEA and or any Parties relating to the
establishment and initial operation of CVCEA, such as the hiring of an Executive Officer
and any administrative staff, and any required accounting, administrative, technical, or
legal services in support of CVCEA's initial activities or in support of the negotiation,
preparation, and approval of one or more Administrative Services Agreements.
Coachella Valley Community Choice Aggregation 20
Draft JPA Agreement, May 2017
15. "Operating Rules and Regulations" means one or more sets of rules, regulations,
policies, bylaws and procedures governing the operation of CVCEA.
16. "Parties" or "Members" means, collectively, the signatories to this Agreement.
17. "Party", "Member" or "Member Agency" means a signatory to this Agreement.
18. "Total Annual Energy Use" has the meaning given in Section 3.15.1(b).
Coachella Valley Community Choice Aggregation 21
Draft JPA Agreement, May 2017
EXHIBIT B
LIST OF PARTIES
Parties: City of Blythe
City of Cathedral City
City of Desert Hot Springs
City of Indian Wells
City of Palm Desert
City of Palm Springs
Coachella Valley Community Choice Aggregation 22
Draft JPA Agreement, May 2017
Member
Blythe
Cathedral City
Desert Hot Springs
Indian Wells
Palm Desert
Palm Springs
Total
EXHIBIT C
PRO FORMA
ANNUAL ENERGY USE
Number of Customers
5,898
24,137
11,421
5,230
39,459
37,826
123,971
Annual Energy Use
(MWh)
117,000
329,000
140,000
158,000
699,000
640,000
2,083,000
Coachella Valley Community Choice Aggregation 23
Draft JPA Agreement, May 2017
EXHIBIT D
PRO FORMA
VOTING SHARES
CVCEA CCA Program Participation and Weighted Voting Shares
Participants
Blythe
'Cathedral City
'Desert Hot Springs
Indian Wells
Palm Desert
Palm Springs
TOTALS
FORMULAS USED:
Annual Energy
Use (MWh)
117,000
329,000
140,000
158,000
699,000
640,000
2,083,000
Percent Annual
Energy Use
5.62%
15.79%
6.72%
7.59%
33.56%
30.72%
100.00%
Annual Energy
Voting Share
2.81%
7.90%
3.36%
3.79%
16.78%
15.36%
50.00%
Use
Pro Rata Voting
Share %
8.33%
8.33%
8.33%
8.33%
8.33%
8.33%
50.00%
Weighted
Voting Share %
11.14%
16.23%
11.69%
12.13%
25.11%
23.70%
100.00%
1. Annual Energy Use Voting Share: Total Annual Energy Use (expressed in MWh) in the Member's
jurisdiction / combined Total Annual Energy Use all Members' jurisdictions] multiplied by '/z),
expressed as a percentage to two decimal places. See section 3.15.1 (b)
Pro-rata Voting Share: [1 / total number of members] multiplied by 'A), expressed as a percentage to
two decimal places. See section 3.15.1 (a)
3. Weighted Voting Share: [the respective sum of the values computed in (1) and (2) above, expressed
as a percentage to two decimal places. See section 3.15.1 (c)
Coachella Valley Community Choice Aggregation 24
Draft JPA Agreement, May 2017
EXHIBIT E
SIGNATURES
IN WITNESS WHEREOF, the Parties hereto have executed this Joint Powers Agreement
establishing the Coachella Valley Community Energy Authority
By:
Name:
Title:
Date:
Party:
(One signature page for each Member)
Coachella Valley Community Choice Aggregation 25
Draft JPA Agreement, May 2017
ITEM 7B
Coachella Valley Association of Governments
Executive Committee
February 27, 2017
CVAG
Staff Report
Subject: Community Choice Aggregation Update
Contact: Katie Barrows, Director of Environmental Resources (kbarrows a(�cvaq.orq)
Recommendation:
1) Receive the final draft of the Inland Choice Power Community Choice Aggregation
Business Plan.
2) Authorize staff to work with the Chair of the Energy & Environmental Resources
Committee to establish an Ad Hoc Working Group to evaluate options for
Community Choice Aggregation.
Energy & Environmental Resources Committee: CONCURS (Meeting of February 9th)
Technical Advisory Committee: CONCURS (Meeting of February 13th)
Background: In April 2016, staff received direction from the Executive Committee to explore a
Community Choice Aggregation program through completion of a feasibility study. At the
September 26 meeting, the first draft of the feasibility study, titled Inland Choice Power
Community Choice Aggregation Business Plan, was presented. The study was developed in
partnership with Western Riverside Council of Governments (WRCOG) and San Bernardino
Council of Governments (SBCOG, formerly SANBAG). The business plan/feasibility study was
finalized in December and is available for your review on the CVAG website:
http://www.cvaq.orq/library/pdf files/enviro/CCA CVAG WRCOG SBCOG Final Feasibility St
udv%20 12 08 16.pdf. This staff report provides a summary of the feasibility study and outlines
next steps.
The feasibility study/business plan indicates that formation of a CCA would result in a net savings
to consumers, an increased use of renewable energy, economic benefits, and greenhouse gas
reductions. Based on the preliminary findings that CCA makes sense for our region, on
September 26 the Executive Committee directed staff to move forward with the development and
implementation of a Community Choice Aggregation program. The feasibility study analyzes three
scenarios for consumer cost savings which vary depending on the percent renewable energy; in
all cases the percent savings accounts for all costs to implement a CCA program. The predicted
savings compared with SCE rates are as follows:
1. 4.9% savings with 33% of electricity from renewable sources (based on SCE current
renewable portfolio standard (RPS))
2. 3.8% savings with 50% of electricity from renewable sources (11.2% savings over SCE
50% green power rate)
3. 5.7% additional cost with 100% of electricity from renewable sources (9.4% savings over
SCE 100% green power rate)
Beyond the cost savings, there are other benefits of Community Choice Aggregation which are
described in the feasibility study. At full CCA implementation, they include: 1) local control over
selection of energy resources including local renewable projects; 2) job creation with the potential
for over 500 jobs to be created in the TRICOG region; 3) economic stimulus resulting from
increase in disposable income associated with electricity bill savings; and 4) greenhouse gas
emissions reduction equivalent to removing 275,000 to 485,000 cars from the road per year by
2018 assuming a 50% renewable energy target is achieved. With local control, Community Choice
Aggregation also provides opportunities to offer programs to promote energy efficiency,
renewable distributed generation, energy storage, and other clean energy benefits. These
programs would also be expected to spur innovation in energy efficiency and renewable
technologies. The development of a CCA could also promote investment in the diverse renewable
energy resources in the Coachella Valley.
Staff has been exploring opportunities for collaboration with Imperial Irrigation District. We
recently met with Don Dame, an energy consultant for Imperial Irrigation District with considerable
expertise on energy issues and CCAs. Mr. Dame attended the Energy and Environmental
Resources Committee on February 9 and presented on Community Choice Aggregation. He will
make a presentation at the Executive Committee meeting on February 27. The CCA is limited to
consumers in the Southern California Edison territory; formation of a CCA within the territory of a
public utility such as IID is not allowed under current law. However, there may be opportunities
for collaboration with IID which staff is exploring, including technical assistance and expertise.
Attached is a "Discussion Draft" prepared by Mr. Dame for CVAG which identifies some of the
key issues related to CCAs and summarizes some of the options for a potential relationship
between CVAG and IID. Mr. Dame's presentation will address these issues and provide an
opportunity for questions from the Executive Committee.
As part of our analysis of options for a CCA, staff has also reached out to various agencies that
have functioning CCAs in place and other organizations involved in promoting CCAs. CCAs are
a rapidly growing opportunity for local govemments. The California Public Utilities Commission
recently held a symposium on CCAs and is hosting regular calls with existing and potential CCAs.
Staff has worked with WRCOG to develop a request for proposals (RFP) to obtain bids on various
implementation tasks involved in launching and operating a CCA. Release of this RFP (February
2017) will invite qualified consultants to submit proposals for all or part of the CCA implementation
tasks. The RFP asks for proposers to present their cost proposal by task for the following options:
1) Separate CCAs for each of three regions (CVAG, WRCOG, and SBCOG); 2) A CCA for the
combined two county area (Riverside and San Bernardino Counties; CVAG, WRCOG, and
SBCOG combined); and 3) A CCA for each county area (Riverside County (CVAG and WRCOG)
and San Bernardino County (SBCOG)) separately. Responses to the RFP will assist with our
analysis of the potential costs of a CCA under various governance and operational structures.
This information will help staff and committee members to evaluate the pros and cons of formation
of smaller, local CCAs for the Coachella Valley, Western Riverside and San Bernardino County
compared to one larger CCA for all three councils of government.
Next Steps:
The next steps for a CCA would include determination of governance and operational structure
(early 2017). Based on review of the options for governance structure used by CCAs in and
outside California, there is a range from a fully staffed agency to a third -party "turnkey"
governance model. Three of the five functioning CCAs in California use a Joint Powers Authority
governance model, including Sonoma Clean Power and Marin Clean Energy. A JPA provides a
flexible framework for CCAs and in California, has been the preferred structure for a CCA. A JPA
also provides financial risk mitigation for its local government members. The City of Lancaster,
the only operational CCA in Southern California, uses a single jurisdiction model. Related to the
governance structure are the operational options for how to set up and organize a CCA. The
feasibility study describes and evaluates these options in more detail. Staff is working with
WRCOG and SBCOG to gather additional information about these options and how they are
working in other areas.
To explore the options for governance structure and implementation of a CCA, staff requests that
the Executive Committee authorize formation of an Ad Hoc Working Group. This working group
would be composed of members of the Energy and Environmental Resources Committee who
represent cities served by Southern California Edison that are interested in participating in
CVAG's CCA program, and one or more city managers/city staff to work with CVAG staff on CCA
implementation. Riverside County is pursuing a CCA program on their own and Rancho Mirage
is also pursuing their own CCA. Staff will continue to coordinate with both agencies as appropriate.
WRCOG has also formed an ad hoc group to evaluate CCA options. The Energy and
Environmental Resources Committee ("E&E") does not have a regularly scheduled meeting until
April 13. In order to continue our progress on a CCA program, staff requests that the Executive
Committee provide direction to staff to work with the E&E Chair on establishing a CCA Ad Hoc
Working Group. Based on their input, staff expects to bring back additional information and
recommendations on selection of governance and operational structures at the next meeting.
The schedule below summarizes a CCA launch schedule presented on page 82 of the business
plan. This is an estimated schedule to illustrate the various tasks necessary to implement a CCA
program and the timing for these tasks. The schedule is an estimate and may be adjusted. The
filing of an Implementation Plan with the California Public Utilities Commission and a notice of
intent with Southern California Edison (SCE) are essential steps for the formation of a CCA. Other
actions include establishing financing for start-up costs, data testing with SCE, and selection of a
vendor to provide power supply and data management services. Based on the estimated
timeframe, an implementation plan could be filed with the CPUC by mid-2017 and launch of the
first phase of a CCA could occur by early 2018.
February 2017
February 2017
March/April 2017
April/June 2017
April/June 2017
May 2017
May 2017
June/July 2017
May -Nov. 2017
Fall 2017
Early 2018
Early 2018
Receive final business plan
Release RFP for CCA implementation assistance
Determine preferred governance structure
Set up governance board
Select power supply and data management vendor
Adopt Resolution of Intent and File Implementation Plan with CPUC
File Notice of Intent with SCE
Arrange financing of start-up costs
SCE data testing
Customer Opt -out 1st and 2nd notices sent
Launch phase 1 (municipal/commercial facilities)
Customer Opt -out 3rd and 4th notices sent
The consultant team has offered to provide an update to individual member jurisdictions upon
request.
Fiscal Analysis: The Executive Committee authorized expenditure of not to exceed $75,000 for
CVAG's share of the feasibility study in April. The joint feasibility study offers cost efficiencies for
all agencies involved. The total cost of the Feasibility Study is divided in proportional shares
among WRCOG, CVAG and SBCOG. To date, CVAG's share of the cost of the Feasibility Study
is approximately $25,000.
Link to Attachment:
1. Final Draft Inland Choice Power Community Choice Aggregation Business Plan —
December 8, 2016
http://www.cvaa.ora/library/pdf files/enviro/CCA CVAG WRCOG SBCOG Final Feasi
bility Study%20 12 08 16.pdf.
2. Discussion Draft: CVAG and Community Choice Aggregation, prepared by Don Dame for
IID.
DISCUSSION DRAFT
Coachella Valley Association of Governments
and
Community Choice Aggregation
BACKGROUND
CVAG /IID
CCA Discussion Draft
2/21/2017
Coachella Valley Association of Governments (CVAG) is in the process of reviewing potential Community
Choice Aggregation (CCA) alternatives which may be of interest to certain of its members. CVAG
recently joined with SANBAG and WRCOG to conduct a CCA feasibility study (Inland Choice Power
Community Choice Aggregation Business Plan) which suggests possible overall retail power cost
reduction to CCA participants in the 3-5 range versus status quo power supply service from Southern
California Edison (SCE). CVAG is geographically proximate to Imperial Irrigation District (IID). IID, in
addition to irrigation district activities, operates a large publicly owned full service integrated electric
utility. Both CVAG and IID want to explore possible ways in which IID might assist CVAG's investigation
and possible implementation and or administration of a CVAG sponsored CCA program.
This draft discussion paper outlines various considerations and implications associated with CVAG
establishing and operating a CCA program with (or without) some form of assistance from IID. CVAG
staff contacted Imperial Irrigation District to explore the potential for IID to provide experiential and
technical assistance to CVAG. This discussion paper was prepared by Don Dame, energy consultant for
IID. Mr. Dame has over 30 years' experience at various gas and electric utilities and west coast public
power organizations. He has considerable expertise in the electric power business, including community
choice energy and renewable resources. IID Energy Manager Vicken Kasarjian graciously offered Mr.
Dame's services to CVAG as we explore the CCA opportunities.
CCA IN A NUTSHELL
California legislation passed in 2002 and amended in 2011 allows cities, counties, or groups of
cities and counties to undertake electric power supply responsibilities on behalf of customers
within their respective jurisdictions that are currently served by investor owned utilities (IOUs).
The existing IOU continues to be responsible for all related local distribution services including
customer billing, which bills will also include the CCA's incurred power supply costs and other
business/operating expenses. One significant risk of a CCA is that customers are not "captive;"
that is, customers can opt -out of the CCA and can return to SCE for power service. If a
significant number of customers do opt -out, a CCA can become economically impractical or fail
completely.
SIZE OF A CVAG CCA
Based on information provided in the Inland Power Study, CCA eligible CVAG power load is in
the range of 200 aMW per year. From a power supply perspective, CVAG would be the 10th
largest public power entity in California. This amount of load translates to annual CCA power
supply costs and operating expenses approaching $200 million per year. A CCA of this size thus
1
CVAG / IID
CCA Discussion Draft
2/21/2017
represents a very significant and ongoing business effort which could employ in the range of 2-
25 or more employees depending on the adopted business structure.
CCA GOVERNANCE AND BUSINESS MODEL
There are about a half dozen operating CCAs in California with many more communities in
various stages of investigation, development and implementation. Governance is typically
provided under a JPA or municipal enterprise structure.
There are three general business approaches to establishing a CCA:
1. "OUTSOURCE" -- Select a single vendor to set up and operate/oversee all
requisite CCA functions under a contract arrangement.
2. "JOIN" -- Find an existing CCA which accepts new participants and join that
organization.
3. "IN HOUSE" -- Perform, or cause to perform, all required business activities
within the structure of the CCA organization. This may include hiring staff,
external technical and legal consultants, and various technical services vendors.
Thus far in California, 2 and 3 above have been the most common approaches. Riverside
County is actively considering a CCA contract arrangement with Good Energy which would be
very similar to a fully out -sourced approach.
CCA DRIVERS
Factors contributing to local government interest in CCA include:
• Reducing retail power rates
• Providing power supply with a lower carbon footprint ("more green")
• Enhancing Local Control
o Economic Development
o Jobs Creation
o Local renewable resource development
o Community power activism/interest
• Contributing to local climate action goals
• "Me Too." As more community leaders become aware of the successes of other
CCAs they ask, "Why shouldn't we do a CCA here?"
TIMING AND MARKETS
Marin Clean Energy (now MCE Clean Energy) was California's first operating CCA which "went
live" in 2010, nearly eight years after the passage of California's CCA legislation. A significant
inducement to establishing a CCA is to attain lower power rates than the existing IOU. Indeed,
2
CVAG / IID
CCA Discussion Draft
2/21/2017
one can imagine much less enthusiasm and local government interest in setting up a CCA which
would result in customers paying higher electricity costs than the local IOU. Since 2010, the
historically volatile power market has been relatively "kind" to CCAs in that incremental market
prices have been significantly below IOU embedded average portfolio cost. This outcome has
been primarily influenced by abundant natural gas supply and associated relatively low natural
gas prices, along with plentiful and falling renewable and conventional resource capacity prices.
With sufficient excess capacity as now exists in California, electric power prices tend to
gravitate to marginal production cost, the bulk of which is fuel.
In California natural gas price provides a fair "fuel proxy" for wholesale electricity price. As MCE
was gearing up in 2010, natural gas prices were declining from historic levels, adding economic
impetus to MCE's environmental objectives. Fortunately for subsequently established CCAs,
wholesale electricity prices have further declined since 2010, but there are some recent signs
that this trend may be reversing. Natural gas prices are currently about $1.00 per MMBtu
higher than a year ago, which adds about $10 / MWh to electricity prices. In any case, market
prices for electricity remain outside the control of any CCA although total supply cost volatility
may be mitigated with long term contracts, effective risk management practices and
development of physical resources.
The graph which follows notionally illustrates the general relationship between natural gas and
electricity prices, along with a green "threshold bar" above which CCA local support likely
diminishes due to a CCA having to charge higher rates than the existing IOU.
3
Is CCA Timing Important?
CCEs most viable when "red line" below "green line"
$/
MWh
160
140
120
100
80
60
0
2002, AB117
CCAs Allowed
2010, 1st CCE
Marin Clean Energy
Proxy Market
Power Price
f(nat gas)
CVAG / IID
CCA Discussion Draft
2/21/2017
Proxy B/E Price
For CCE to Price
Compete w/IOU
V
op co T o o e s
C C O O O O O O O 0 0 0 0 0 O O
o a 2o o o o
Notice that electricity market prices have been sufficiently low since 2010 to allow a well -
managed CCA to operate with rates slightly below or at parity with the incumbent IOU (red line
below green line). In some cases, savings of 5% or more have been attained. Since early 2016,
however, there appears to be a trend of increasing natural gas price which may or may not be
sustained. One possible conclusion for organizations considering CCA is to establish their
business more swiftly, to enhance the likelihood of securing power supply at prices competitive
with the incumbent IOU. If power market prices return to the relative levels observed between
2002 and 2009 (red line above green line), it would be virtually impossible for a new CCA to
acquire power supply at a cost allowing lower rates than the incumbent IOU.
4
CVAG /IID
CCA Discussion Draft
2/21/2017
CVAG AND IID
IID, in addition to its significant irrigation district responsibilities, is the third largest publicly
owned electric utility in California. IID has a peak system load close to 1,000 MW and average
annual energy sales of approximately 400 aMW. IID is a full service integrated wholesale/retail
electric utility which owns and operates transmission and distribution lines and power plants,
as well as performing "balancing authority" services for its large geographic service territory
(separate and distinct from SCE and the CAISO). Thus IID inherently has the complete range of
business and technical skills to operate and maintain a large power system on both a minute -
to -minute and long range basis.
Indeed, required CCA related skill sets include only a subset of IID's comprehensive power
supply, business, planning, finance and technical operating capabilities. Some additional
learning and adjustment would be needed by IID to tackle the nuances of CCA power
usage/billing data management interface with incumbent IOU, along with requisite CPUC
regulatory compliance pertaining to CCAs.
Should CVAG opt to establish a CCA, skills sets needed include:
• Customer Service / Public Relations / Key Accounts Reps / CIS / Information
Technology
• Rates / NEM / FIT tariffs and services / Cost of Service Analysis
• Planning and Forecasting
• Finance / Accounting / Budgeting / Credit / Commercial Banking
• Risk Management (business, insurance, power supply)
• Power Contracting / Resource Acquisition
• CAISO Schedule Coordination / Validation / Settlements
• Governance
• Legal Support
• Staffing / HR
• Regulatory Compliance / Reporting / Monitoring
• Data Interface and Billing interface with IOU
IID could provide various levels of assistance to CVAG in attaining and / or performing these skill
functions, from general advice to full CCA program management including resource
procurement. IID's electric service territory includes the greater geographic portion of the
Coachella Valley and would be immediately adjacent to any established CVAG CCA. The major
urban communities which could be served by a CVAG CCA include Rancho Mirage, Palm Desert,
Indian Wells, as well as portions of unincorporated Riverside County.
Skill sets needed by existing and new CCAs are widely available in the market from a large and
growing number of consultants and vendors desiring to profit from California's enlarging CCA
market. Many of the more experienced vendors have been serving this market for years.
5
CVAG /IID
CCA Discussion Draft
2/21/2017
Depending on the business structure a CCA adopts, notional non power supply operating costs
are typically in the $3-$5 per MWh range when averaged out over CCA load --- with larger Toads
experiencing lower average unit operating expenses. Both CVAG and IID should realistically
assess whether IID could tune its technical skills to CCA services in a competitive manner versus
existing and experienced CCA service suppliers. Certainly two desirable IID characteristics are
its non-profit structure and geographic proximity to CVAG, but these positive attributes may
not be sufficient to overcome the attainment of CCA services from entities exclusively focused
on the CCA market.
RESIDENTIAL RATES CAVEAT
Currently IID residential rates average about $ 0.12 / kWh and SCE's comparative residential
rates average about $ 0.21 / kWh. IID's rates are lower than SCE's by nearly 40%. Thus some
homes, literally across the street from each other, receiving respectively service from these two
utilities have dramatically different power bills. A home, for example, with 2,000 kWh summer
month power consumption would pay approximately $240 under IID rates and $410 under SCE
rates. Involved IID and CCA decision makers and customers will need to acknowledge and
understand that if IID were to assist CVAG's CCA efforts in some manner, such assistance would
not include any ability for IID to subsidize or transfer, all or in part, IID's current residential rate
advantage to CVAG's CCA customers. Rates and charges associated with any newly established
CCA would be wholly a function of then prevailing power market prices, regulatory mandates
and business infrastructure. Although a new CCA may be able to achieve some rate savings
versus SCE, such savings is not likely to exceed 5% at best. Therefore, a significant price
difference between CCA and l'D residential rate structures will continue to exist.
6
CVAG /IID
CCA Discussion Draft
2/21/2017
POTENTIAL CVAG CCA BUSINESS APPROACHES
1. STATUS QUO — CVAG does not establish a CCA and electricity customers
continue to receive retail service from SCE.
2. CVAG JOINS EXISTING CCA' -- CVAG and interested CVAG members take
requisite actions (via existing or new JPA structure) to establish and certify a CCA
and then join with an existing CCA to attain all related business services and
power supply as "part" of the existing CCA.
3. CVAG BECOMES CCA2 -- CVAG and interested CVAG members take appropriate
governance actions to establish, manage and operate a new CCA.
a. FULL OUTSOURCE -- Select a 3'd party to perform, or cause to perform, all
requisite CCA activities (similar to "Good Energy" suggested approach,
and, conceivably, an entity like IID could be such a 3'd party as well).
b. PARTIAL OUTSOURCE -- CVAG selects one or more vendors and/or
consultants to perform such business and technical services that CVAG
opts not to perform internally (this tends to be model used by existing
California CCAs, and, conceivably an entity like IID may be able to provide
certain of the needed services).
c. FULL IN-HOUSE -- CVAG staffs up sufficiently to perform all requisite CCA
related business and technical activities (this approach would be
especially labor intensive and expensive given the scale economies
associated with many power related skills and functions; no existing CCA
has pursued this approach although some of the significantly larger CCAs
in various stages of development may be able to support and justify such
an approach).
Under any of the above approaches (including Status Quo), IID could, at minimum, be a
valuable source of information and advice to CVAG regarding nuances and potential efficacy of
entering the electric power business. In essence, IID could provide experienced and impartial
peer -to -peer "reality checks" of CCA activities. Subject to any ultimate CCA structure pursued
by CVAG, IID could provide more extensive advice, consulting and or technical services to assist
and support, and possibly fully administer at CVAG's direction, a CVAG initiated CCA. And such
support from IID could also include developing a robust power supply portfolio; the provision
and or procurement of requisite ancillary services; interface with the CAISO on planning,
scheduling, settlements and validation; and providing CVAG the opportunity to participate in
new (or perhaps existing) conventional and renewable projects.
1 Note that individual CVAG members could unilaterally establish a CCA and or join another existing and
accommodating CCA program.
2 Similar to above individual CVAG municipal members could unilaterally establish, manage and operate a CCA
independently from CVAG and/or other CVAG members.
7
CVAG /IID
CCA Discussion Draft
2/21/2017
The tabulation below further expands the options outlined above and describes potential IID
"roles" together with notional benefits and shortcomings of such IID involvement from both IID
and CVAG perspectives:
NOTIONAL CVAG COMMUNITY CHOICE ENERGY APPROACHES
Status Join Existing CVAG Establishes a CCA
Particulars Quo CCA Full Partial Full In- Notes
Outsource Outsource House
Descripti SCE CVAG CVAG CVAG CVAG
on continues formally formally formally formally
to provide establishes establishes establishes establishes
full retail a CCA (via a CCA. a CCA. a CCA. And
electric JPA) and Contracts Undertakes undertakes
service for joins an with a manageme all
all existing CCA single 3rd nt and manageme
customers to attain party to operations nt and
CVAG
Activities
No formal
CVAG
role,
CVAG may
want to
promote /
encourage
various
energy
efficiency
measures
from time
to time
for its
CCA
services for
participatin
g members.
One or
more CVAG
representati
ves on CCA
board, likely
need 1 f/t
staff to
oversee CCA
business
relationship
within the
existing
CCA.
attain all
needed CCA
services.
3rd Party
contract
oversight at
Board level,
likely need
1 f/t staff to
manage
contract
relationship
and keep
CVAG Board
informed
and to vote
on CCA
of CCA with
internal
staff,
selected
vendors
and
consultants
Full
manageria
I oversight
and
control
including
finance,
credit,
power
procurem
ent and
customer
service.
Likely
operations
of CCA
with
internal
staff,
minimizing
use of
vendors
and
consultants
Full
immersion
into CCA
operations
and
manageme
nt. May
"grow" to
about 30
new staff
over time
(using MCE
proxy). All
functions
performed
The
described
options are
not fully
comprehens
ive and
there are
many
"shades of
grey" which
may be
applicable in
particular
circumstanc
es.
Level of
CVAG
activities
may vary
over time as
it gains
experience,
markets
change,
Board
objectives
change, or
other
opportunitie
s arise.
8
CVAG j IID
CCA Discussion Draft
2/21/2017
NOTIONAL CVAG COMMUNITY CHOICE ENERGY APPROACHES
CVAG Establishes a CCA
Particulars
Status Join Existing
Quo CCA
constituen
cy.
CVAG + Avoids
business
start-up
and
associated
risks.
Allows
CVAG to
focus on
existing
goals and
objectives
without
the
burden of
a new
endeavor.
CVAG - Avoids
possible
CCA
savings,
renewable
resources
promotion
. There
may not
be
another
opportuni
ty to start
a local
CCA.
Provides a
local CCA
without
start-up risk
or new
business
infrastructu
re,
improves
scale
economies
of existing
CCA.
Subject to
decisions
made by
"other"
CCA, CVAG
may not
fully meet
its member
power
needs and
goals.
Full
Outsource
action
items.
Establish
local CCA
with
minimal
staffing and
operations
burden,
tailor local
efficiency
and
renewables
programs.
Partial Full In- Notes
Outsource House
require 3- or directed
6 staff. internally.
Run and
control
local CCA.
Keeps
members
involved
and
responsibl
e. Can
adjust
program
as needed.
Full local
control and
response
to
constituen
cy. More
intense use
of existing
JPA
infrastruct
ure.
Provide
long term
benefits to
CVAG
members.
Risk of Some new New
working staff likely. business
with 1 Must burdens
party, may establish and risk.
not have business Do
sufficient and members
local input technical want to
or control, relationshi add
selected ps with needed
entity may vendors. staff? Will
be a profit Adds CCA
making business activities
company. and overshado
market w or dilute
risk of other
power CVAG
procurem missions?
ent.
For
constituents
who support
public, non-
profit
enterprise, a
CCA
presents
one more
opportunity
for public
provision of
an essential
service.
Apart from
status quo,
any CCA
program will
involve a
range of
risks, which
may be
mitigated
but not
eliminated.
9
Particulars
IID
Activities
CVAG / IID
CCA Discussion Draft
2/21/2017
NOTIONAL CVAG COMMUNITY CHOICE ENERGY APPROACHES
CVAG Establishes a CCA
Full Partial Full In-
Outsource Outsource
May IID could IID could
provide provide provide
general advice, full/partial
advice or possible assistance
"rep" to participatio with
participate n in IID power
on behalf of existing procurem
CVAG. /new ent,
resources, customer
possible IID service,
full resource
"manageme planning,
nt" of etc. in
CVAG's CCA either
contract advisory
services. or
Status Join Existing
Quo CCA
n/a
IID + n/a
IID - n/a
n/a
n/a
Good
business
neighbor to
CVAG,
potential
new
resource
partner,
enhance
regional
reputation.
Would be a
new
business
relationship
contract
support
role
Share
existing
power
expertise,
may help
CVAG
succeed,
possible
CVAG
partner for
resource
developm
ent and
energy
efficiency.
CCA is
slightly
different
business
House
Provide
advice and
possibly
some
contract
services if
good
business
fit.
Possible
joint
resource
planning.
May share
power
expertise,
resource
developme
nt partner,
joint
efficiency
efforts.
Economies
on shared
skills.
Notes
Any IID
involvement
with a new
CCA should
be assessed
at Board and
organization
levels to
assure
mutual long
term goals
compatibilit
y.
May
establish a
positive
power side
relationship
which may
at some
point
provide
other
cooperative
ventures.
CCA is May also
different result in
business "entanglem
model, ent" difficult
10
CVAG /IID
CCA Discussion Draft
2/21/2017
NOTIONAL CVAG COMMUNITY CHOICE ENERGY APPROACHES
Particulars
Other
SUMMARY
Status Join Existing
Quo CCA
CVAG Establishes a CCA
Full Partial Full In-
Outsource Outsource House
with CVAG, model, may dilute
possible may dilute IID
negative business business
implications focus, may focus, may
if CCA fails get get
to attain "blame" "blame"
desired for any for poor
results or sub -par CVAG
fails. CVAG outcomes/
outcome. decisions.
Notes
to extract
from if the
business
relationship
should sour
due to some
uncontrollab
le reason or
event.
The legislative and business framework exists for local city and county bodies to establish a
CCA. Commensurate with increasing levels of CCA activity in California, many power marketers,
vendors and consultants are competitively providing a comprehensive array of services within
the CCA space. CVAG and its members are considering how they may establish a CCA program
either by participating with other similarly situated public organizations or perhaps establishing
a CVAG-specific CCA. If CVAG establishes a new CCA it will need to perform or attain related
business, technical, and power supply services. Other existing CCAs have successfully attained
needed services by adding internal staff and or seeking external consultants and vendors
through RFP processes. Another potential avenue for CVAG to acquire needed CCA skills may
be through some type of formal arrangement with IID. IID is a large, full service public power
organization and could assist a CVAG CCA in developing a power supply portfolio; the provision
of requisite ancillary services; interfacing with the CAISO on planning, scheduling, billing,
settlements and validation; and providing CVAG the opportunity to participate in new (or
perhaps existing) conventional and renewable power resource projects. The success of a newly
established CCA will at least in part be assessed on retail rate levels and currently rising natural
gas prices tend to dampen some of the economic benefits of a new CCA.
The brief outline herein attempts to highlight potential implications, benefits and possible
shortcomings associated with IID providing some form of assistance to the development and
operation of a CVAG CCA.
11
CVAG
Coachella Valley Association of Governments
Ad Hoc Working Group
Community Choice Aggregation
Monday, May 15, 2017
MEETING NOTES
A. Introductions/Attendance
Cathedral City — Shelley Kaplan, Charlie McClendon
Desert Hot Springs — Yvonne Parks, Luke Rainey
Indian Wells — Richard Balocco
Palm Desert - Sabby Jonathan, Ryan Stendell
Palm Springs — Geoff Kors
CVAG staff — Tom Kirk, Katie Barrows, Benjamin Druyon, Don Dame (on phone)
B. Governance Structure. Three options for governance structure were reviewed
(see Attachment 1). The Working Group recommended the "New JPA, CVAG
provides staff' option. The Draft Joint Powers Agreement (JPA) has been revised
to identify CVAG staffing for first five years. (Revised JPA, Attachment 2).
Action Items
1. Members agreed to circulate draft JPA agreement among their staff, legal
counsel for review
C. Potential Financing Options. Tom Kirk reviewed potential financing options and
indicated that participating agencies could provide a loan to the CCA for start-up
costs, at a favorable interest rate. CVAG is evaluating capacity to do so. Start-up
costs are estimated to range from $1 million to $2.5 million.
Action Items
1. Members are asked to consult with staff, finance directors about your city's
interest in participating in start-up financing. Funds would be paid back once
CCA is operational and sufficient revenues are generated.
D. Benchmark Steps to CCA Formation
A draft schedule providing for launch of a CCA in May 2018 was reviewed. Staff
provided an overview of governance issues. A separate joint powers agency is
recommended. Don Dame provided a summary of a weighted voting share
structure used by other CCAs (see Attachment 3).
Action Items
1. City Council study session presentations scheduled with all participating
cities:
Palm Springs — May 3
Palm Desert — May 11
Indian Wells — June 1
Desert Hot Springs — June 6
Cathedral City — June 14
Blythe - TBD
2. Staff to work with each city staff to schedule consideration of JPA formation
as soon as possible, given summer schedule
E. Rates and Rate setting protocols. Staff provided a summary of rate structures for
existing CCAs in California (see Attachment 4).
Attachments:
1. Governance & Operations Structure Options
2. Draft Joint Powers Agreement
3. Benchmark Steps to CCA Formation
4. CCA Rate Comparison
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