Community Choice Energy (CCE) In San Mateo County City Staff Workshop ▪ September 15, 2015

Meeting Agenda 8:30 amOverview of CCE, Background, and Update on PCE 9:00 amTechnical Study Results 9:15 amTaking CCE to Your Council 10:00 amCommunity Outreach and Engagement 10:30 amAdjourn

Community Choice Energy Overview

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

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

Basic Program Features “CCE: The Biggest Change You’ll Never Notice” Formation of Joint Powers Agency in San Mateo County: Local governments participate by passing an ordinance and entering into a JPA Agreement Utility (PG&E) continues to provide consolidated billing, customer service, line maintenance CCE electric generation charges (including exit fee) appear as new line items on the customer bill; all other charges remain the same CCE becomes default electric provider. Customers receive a minimum 4 opt-out notices over 120 days and can return to PG&E service any time. CPUC certifies CCE Plan; oversees utility/ CCE relationship and other requirements.

Sample Energy Bill – Marin Clean Energy 7 Page 1 Page 2

San Mateo County CCE Formation Timeline San Mateo County proposes an August 2016 Launch. Phase 1 Phase 2 January -September 2015Oct 2015 – February 2016March – August 2016 Pre-Planning & Due Diligence Community Outreach; PCE Planning & Development Preparing for Launch Internal planning team Initial outreach to cities and key stakeholders Workshops & education Formation of CCE advisory committee CCE technical study complete (go/no-go) PCE Program & JPA design City outreach/Passage of local ordinances Impl. Plan Submitted RFP for Energy Services Plan for JPA staffing/working capital Community outreach First JPA Board meeting Energy supply and other service contracts Utility Service Agmt. Regulatory Registrations Marketing Campaign Call Center & Customer Enrollment Phase 3

In our First 9 Months… Focused outreach to all 20 cities; unanimous participation in Countywide Technical Study Formed internal staff + consultant team to manage process Unanimous Board agreement to fund CCA program development Community & Stakeholder Engagement: Stakeholder database, e-notifications, website, educational workshops, 1:1 briefings, event tabling CCE Advisory Committee has been meeting monthly since May 28 Program Named: Peninsula Clean Energy; logo underway… Technical Study now complete; review at 9/24 Advisory Committee Meeting Return to BOS in October for go/no go to Phase II

Technical Feasibility Study

Key Elements of the Technical Study Load Analysis Rate Analysis Pro Forma Analysis Supply Portfolio Analysis Economic Impact Analysis Technical Study Report analytics begin with load data and customer composition scenarios addressing various resources mixes (renewable, carbon-free and conventional energy) as well as other program assumptions revenue generated through projected energy sales (at PG&E rates) and CCA rates (assumes that PG&E rate structure is maintained, including identical rate schedules for CCA customers) financial results are projected with an emphasis on cash flows, revenues, power costs, reserves, and debt structure impacts on direct and indirect job creation are estimated based on anticipated contract portfolio 2

San Mateo County Load Composition Analyzed two years of PG&E Item 16 load data for all County jurisdictions Used most current 12- months of consumption data and most current month of customer counts for entire technical study Direct Access customers account for about 10% of total County electric consumption 12 Customer Classification Customer Accounts Energy Consumption (MWh) Share of Energy Consumption (%) Residential269,0611,457,63737% Small Commercial23,072469,02112% Medium Commercial2,665613,39816% Large Commercial1,333933,30524% Industrial43378,42210% Ag and Pumping27525,0951% Street Lighting1,43224,0521% TOTAL297,8813,900,930100% Peak Demand (MW)682 County Load Composition Energy Consumption (MWh) Customer Accounts PG&E Bundled Load3,900,930297,881 Direct Access Load417, Total Load4,318,415298,435 Load Breakout by Customer Classification Load Composition Overview

County Load Composition (cont.) 13 Residential accounts for 90% of total customers, but 37% of total consumption Large commercial accounts for less than 0.5% of total customer, but 24% of total consumption

CCA Supply Scenarios  Unbundled renewable energy certificates excluded from resource mix  Nuclear- and coal-based energy also excluded from resource mix Scenario 1: Baseline, minimum 35% renewable energy content scaling up to 50% by 2030 Scenario 2: Minimum 50% renewable energy content scaling up to 75% by 2030; reduced overall GHG emissions relative to PG&E projections  Large hydro resources to be used for non-renewable, GHG-free supply Scenario 3: 100% renewable energy content with significant GHG emissions reductions 14

Key Findings and Conclusions Scenario 1 highlights CCA program viability on a rate competitive basis Scenario 2 highlights CCA program viability on renewable and carbon-free content basis (w/rate competitiveness) Scenario 3 highlights the CCA rate premium under a 100% renewable option as well as opt-out risk/uncertainty No “correct” answer, but in general terms, the technical study indicates that the Peninsula Clean Energy program could be economically viable while also achieving the County’s environmental objectives 15

Risks and Uncertainties PG&E rate uncertainty (generation rates and exit fees) Length of current wholesale energy price trough Availability of large hydro resources to meet carbon-free content goals Opt-out rate uncertainty Overall program size given participation of specific jurisdictions Credit structure for power supply Future CCA specific legislation Regulatory changes around renewable and capacity mandates 16

6-Month Goals (September - February ) 1.Complete Technical Study / Prepare Presentation of Results 2. Prep CCE Ordinance and JPA Documents 3.County: Approve Phase II Project Plan and Funding, Pass first CCE Ordinance 4. Cities: Hold study sessions, participate in advisory committee, conduct public hearings, local ordinance adoption 5. Community: Continue to build local awareness among key stakeholder groups and public; prep for full public marketing campaign in 2016

Taking CCE To Your Council

Taking CCE to Your Council Key Documents 1.JPA Agreement/Resolution 2.CCE Ordinance (required for participation) 3.Staff Report and “package” of supporting materials: Technical Study results (including financial projections) Peninsula Clean Energy project plan/timeline (through launch) Community Outreach Plan JPA-related documents (staffing plan, initial policies, etc)

Taking CCE to Your Council Recommended Steps a)1:1 Briefings with City Mangers and Mayors (if needed) a)City Council Study Session (deep dive into results of tech study and plans for Peninsula Clean Energy a)Community Workshops and Public Hearings (at least two) a)Agendize in January/February – first and second readings of CCE ordinance and resolution to join the JPA – Deadline to pass ordinance/become a founding member is February 28, 2016 a)If joining JPA, appoint JPA Board Representative

Key Dates Thru End February 2016 Date GroupTopic(s) September 1Tech Study Complete September 15Workshop for City StaffCCE update; preparing for coming months September 24Advisory Committee Mtg.Tech study results and recommendations October 6County BOS Study SessionTech study results; updated project/JPA plan; que-up ordinances October 7Community Workshops (2)Burlingame and Redwood City October 20County BOS Phase II ApprovalsPhase II funding; CCE and JPA Ordinances October 22Advisory Committee Mtg.Update on BOS actions; Phase III workplan; dates/materials for cities November 19Advisory Committee Mtg.RFP for marketing and other vendor svcs; other topics TBD. Nov-FebruaryCity study sessions, public hearings, City Council votes Program and JPA Plans; Feedback and local ordinance adoption

Staff Report Template

Purpose – Use as a starting point – Provides background for councilmembers and residents Background – Brief history of project – CCE overview

Staff Report Template Discussion – Benefits/risks of a CCE program – How it will affect your city (e.g. climate action goals) – Brief JPA description Attachments – CCA Ordinance – JPA Agreement – Tech Study Summary – Project Timeline

Key Elements of JPA Agreement IssuePrecedentCounty Recommendation Agency Purpose Solely CCA or other purposes? Focused on CCA /energy related programs Municipal Membership Cities as full members or participants? MCE – Cities as full members SCP – Cities as participants Cities as full members Board Representation Elected official or city appointed representative MCE - appointed elected member + alternate ; no term limits SCP – City appointed rep permitted; current board members are electeds with one CM 1 seat/ member Elected rep +alternate Term limits TBD

Key Elements of JPA Agreement IssuePrecedentCounty Recommendation Board Voting Two tier structure; Supermajority MCE- Majority and weighted vote combined SCP- Majority vote with option to call for a weighted vote Majority vote with option to call for a weighted vote Joint Powers Powers common to the parties/members and any addtl powers provided by law. Power to contract Power to employ Power to acquire and maintain public works Power to incur debt and issue bonds Power to submit documents, adopt rules and regulations Same

Key Elements of JPA Agreement IssuePrecedentCounty Recommendation New Members (post launch) MCE – No cost within first year; incremental costs thereafter SCP – No cost within first 180 days; expansion currently under consideration Possible modest fee after initial formation to cover costs of load analytics, procurement, customer enrollment. Withdrawl of Membership Municipal accounts only or all community accounts? MCE – Municipal accounts only; fee for departing load SCP – all accounts within two payout options for departing load Option to remove either municipal accounts and/or all accounts within two timing/payout options Administration Self administered or outsourced ? MCE/SCP: Self administered with option to appt. one or more admin service providers Same

Key Elements of JPA Agreement IssuePrecedentCounty Recommendation JPA Committees Permissive or required? MCE – Permissive; at discretion of the Board SCP – external/stakeholder operations and rate setting committees required Permissive/at discretion of Board Cost Recovery (for advanced program funds-- County only) Both MCE and SCP had cost recovery provisions Cities not expected to contribute to CCE start up costs Cities not liable for agency debt unless otherwise specified in writing

Communications & Outreach

Ph I and II Communications Strategy January 2015-February 2016 Current Strategies: 1.Informational Briefings & Workshops 2.Community Events/Tabling (Brochure, FAQ) 3.1 on 1 meetings/presentations 4.Local Press; Op-Eds 5.Website; Periodic s to CCE database Target Audiences: Elected officials/city staff, Environmental and CCE advocacy groups, Business organizations, Community stakeholders

Ph II and III Communications Strategy March-August 2016 Future Strategies: 1.Continue all existing outreach PLUS: 2.Expanded Website (customer focus) 3.Use of Social, local TV, and Print Media (including expanded press coverage) 4.Public Advertising Campaign prior to customer enrollment period Target Audiences: In addition to current stakeholder groups, expand to addtl. community organizations, thought leaders, and large energy users; Priority focus on public engagement and awareness

Workshops & Briefings To Date Not including Local Governments or Municipal Organizations North County  League of Women Voters of North & Central San Mateo County  Millbrae Chamber of Commerce  Pacifica Climate Committee  San Bruno Rotary Club  San Bruno City Council

Workshops & Briefings To Date Central County  Burlingame Rotary Club  Citizen’s Environmental Council Burlingame  San Mateo Chamber of Commerce  San Mateo Sunrise Rotary Club  City of San Mateo Council  Belmont Chamber of Commerce  Midcoast Community Council  Half Moon Bay Chamber of Commerce  Hillsborough Town Council

Workshops & Briefings To Date South County  San Carlos City Council  Woodside Town Council  North Fair Oaks Community Council  Unitarian Universalists – Redwood City Chapter  Redwood City Chamber of Commerce  Menlo Park Environmental Quality Commission

Workshops & Briefings To Date  Business forum co-hosted with SAMCEDA  San Mateo County Democracy for America  C/CAG  City Managers Association  Council of Cities

Events & 1:1 Meetings To Date Events/Tabling  6 Earth Day events in April  Sunset Magazine Festival 1 on 1 Meetings  Large businesses: Genentech, Google, Facebook  San Mateo County Central Labor Council

Communications Strategy: Next 6 Months  Expand to new audiences/stakeholder groups  Partner with local CCE advocates for tabling, endorsements, and community presentations  Focus on social media and press outreach  Preparing for full public marketing and advertising campaign – to start once JPA is formed  Cities schedule public hearings and workshops

Upcoming Workshops &Briefings  Belmont Rotary Club – September 28  Half Moon Bay Lion’s Club – October 5  Pacifica Rotary Club – October 6  Community Meeting in Burlingame—October 7  Millbrae Rotary Club – October 13  Belmont City Council—October 27  Daly City Lion’s Club—November 4  Unitarian Universalists, San Mateo—November 15  Pacifica Lion’s Club—November 16  Menlo Park Rotary Club—December 9

How to Talk about CCE Goals: 1) Educate and 2) Encourage Engagement  Encourage residents to come to workshops, Advisory Committee meetings, or council meetings  Have them sign up for our mailing list Practice: What is CCE? How will this affect your residents? Emphasize the “three C’s”: Choice, Community, and Clean Power

How to Talk about CCE Things to know:  Current status of the program  Upcoming workshops/meetings  Resources for residents – website, social media links Don’t overpromise; be honest about potential risks

Frequently Asked Questions Will my electricity service be altered? Will I be treated differently if I have an issue with my power supply and I am a CCE customer? If I joined a CCE, would my electricity rates go up? I have solar panels on my house, how will this program affect me?

Frequently Asked Questions What about programs for low-income individuals? Will I still have access to PG&E’s energy efficiency programs? Why is CCE an “opt-out” program? Why do people choose to opt out?

Recap: Next Steps for Cities Schedule study sessions and/or multiple hearings of CCE ordinance – Notify County staff Schedule public hearings and workshops before the vote Request any outreach materials you may need Promote County-wide community meetings and Advisory Committee meetings

We’d Like to Hear From You… What do you need to support your CCE program understanding and City Council’s decision-making? For More Information: Supervisor Dave Pine – Supervisor Carole Groom – County Office of Sustainability, Jim Eggemeyer –

Questions? Kirsten Pringle San Mateo County, Office of Sustainability (650) Thank you for attending!