REPORT TO COUNCIL
SUBJECT
Title
Consideration of the Silicon Valley Power 2021 Power Content Label
Report
COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure
BACKGROUND
The Power Source Disclosure (PSD) program was established by Senate Bill (SB) 1305 (Stats. 1997, ch. 796) in an effort to provide retail electricity consumers “accurate, reliable, and simple to understand information on the sources of energy that are used to provide electric services.”
In 2016, the California Energy Commission (CEC) adopted modifications to the regulations to incorporate statutory changes to program rules and reporting requirements as required by Assembly Bill (AB) 162 (Stats. 2009, ch. 313) and AB 2227 (Stats. 2012, ch. 616). AB 1110 (Stats. 2016, ch. 656) modified the PSD Program and Power Content Label by requiring retail suppliers to disclose the greenhouse gas (GHG) emissions intensity (the rate of emissions per unit of electricity) associated with each electricity portfolio beginning in 2021 for the 2020 reporting year. AB 1110 also required the CEC among other things, to determine a format for disclosing unbundled California eligible renewable energy credits (RECs) as a percentage of annual retail sales to be shown as an offset.
The law requires that electricity retail suppliers, like the City of Santa Clara’s Electric Department, dba Silicon Valley Power (SVP), disclose to customers which types of resources are used to generate the electricity being sold to them. SVP is required to use the reporting format developed by the CEC called the Power Content Label (PCL). The data that is used to create the PCL comes from SVP’s Power Source Disclosure (PSD) report that is audited through a third party and submitted to the CEC. Additionally, the CEC combines information from all in-state generation plant owners plus information on electricity imports and exports provided by the California Independent System Operator (CAISO) and other grid balancing authorities serving the state to create California’s overall energy mix, which is called the “CA Power Mix”. The CEC states that the CA Power Mix appears on the PCL as a reference point and it is not an exact apples-to-apples comparison of a retail supplier’s fuel mix.
2021 PCL Format
In 2020, the CEC established a new PCL that includes comparative emissions calculations along with the percentage of energy resources that is attributed to each SVP label. The 2021 PCL does not factor in the carbon intensity of the energy on an hourly basis or when energy is being drawn from the grid. However, SVP will continue to address carbon emissions reductions through all avenues available in order to meet ambitious climate targets set by both the City and the State.
The PCL format is broken down into two major sections. The left side of the PCL highlights the carbon intensity of each of the types of electricity products that SVP offers its customers. The right side displays the percentages of energy sources that make up each product. SVP has four types of electricity products offered to our customers. Below we describe how the new PCL format affects the reporting on each product:
• SVP Residential Mix
• SVP Non-Residential
• SVP Green Power Standard Mix - With the change in the label reporting requirements this year, SVP can no longer show energy offsets that do not fall under the CEC eligible renewable definition. The Green-e certified RECs are not recognized by the CEC unless they are also registered as California Eligible Renewable.
• SVP National Green Power Mix - This is a separate label for customers who procure global energy offsets for sustainability and carbon neutrality. The CEC does not recognize any offsets that are not considered California Eligible Renewable and will not allow these Green-e certified renewable RECs be displayed on the California Power Content label. Nor will they let RECs count toward emissions calculations.
A notice of PCL availability and link to the SVP website will be published on customers’ electric utility bill in October and will be published on the Silicon Valley Power website. The PCL will be used in other publications and marketing materials as needed.
DISCUSSION
State Compliance
SVP is in full compliance with the State Renewable Energy Portfolio requirement established in 2004, which has a different set of rules and requirements, and time periods separate from the Power Content Label.
Power Content Labels
There are two different Power Content Labels attached. The first label displays only the four energy products and the CA Power Mix per CEC reporting guidelines. This PCL will be submitted to the CEC and published for retail customers. The second label includes a combination of the four energy products into SVP’s Overall Power mix while also utilizing the California Independent System Operator’s (CAISO) emission’s factor on an hourly basis for any unspecified energy purchased via the CAISO settled open markets. This combination of SVP’s Overall Power mix is comparable to the CA Power Mix. SVP will publish the PCL including the overall SVP power mix. In summary:
• The City’s residential load is a 100% carbon-free and renewable energy mix.
• The non-residential power mix consists of 27% renewable resources. With the inclusion of large hydroelectric generation (capacity sized over 30 MW), SVP’s 2021 Power Mix is 41% greenhouse gas (GHG) free.
Information reported in the Power Content Label is the SVP operating data for City-owned power plants, generation plants operated by the Northern California Power Agency, and Power Purchase agreements. For other specific energy resources, SVP uses information from invoices and RECs that are accounted for in SVP's Western Renewable Energy Generation Information System (WREGIS) account. For those agencies or utilities where a specific generation source (i.e. wind, solar, geothermal, hydro, coal, natural gas, etc.) could not be identified, per the guidelines, staff must assign these resources as "unspecified source of power".
Change Over Previous Years
The amount of renewable and carbon free energy in the overall SVP Power Mix decreased compared to the past few years. The decrease in 2021 is due to two factors: drought and load growth. For example, during an average hydroelectric year, SVP receives over 45% of our clean energy from hydroelectric resources. In 2021, due to drought conditions, SVP only received about half of those expected resources with approximately 13% of its energy from hydroelectric. In 2018, the Camp Fire started in Butte County damaged transmission infrastructure that prevented SVP from receiving electricity from the SVP-owned Grizzly Powerhouse, a small hydro project generating an average 43,000 MWh/year. Grizzly is currently scheduled to return to service fall of 2023.
Other factors that impact SVP’s PCL are the cancelation of projects or the delay in the commercial operation date (COD) of projects SVP has contracted with. These delays can occur for a variety of reasons including but not limited to timing and development of transmission expansion, environmental policies and approvals, legislative mandates, supply chain issues, and unforeseen events such as the COVID19 pandemic. For example, in 2016, SVP contracted for 49.5 MW of power from the Altamont wind project that was intended to be in commercial operation in 2020. However, due to permitting delays, operations are now not expected until 2025/2026 resulting in approximately 169,000 MWh that did not arrive to our customers. As previously discussed with Council SVP also had to cancel the contract for Viento Loco due to their inability to permit transmission connections. Viento Loco was supposed to deliver 800,000 MWhs annually starting in late 2023. Those two projects combined were 249.5 MW which is approximately 35% of SVP’s new current Peak Load.
Upcoming Years
SVP is heavily engaged in clean energy procurement for the future, including negotiations for over 850+ MWs of energy totaling over 2,900,000 MWh annually. These resources are in various stages of development and negotiations and are estimated to achieve commercial operation over the next several years. Additional opportunities are continuously identified by SVP as it is possible that not all negotiations will lead to final agreements, or a project will fail to achieve commercial operations.
The City Council recently granted the City Manager authority to enter into two of those agreements. One is a baseload geothermal resource that will be online in 2025 and the other is a large wind project scheduled to be online by the end of 2024. The total forecasted generation is approximately 1,613,200 MWh annually. Staff will keep the Council updated on these two projects.
In addition, SVP has launched the Large Commercial Renewable Energy program. This voluntary program will enable SVP or our customers to procure up to 100% renewable energy for industrial and large commercial customers that want to exceed SVP’s current Non-Residential product offering.
ENVIRONMENTAL REVIEW
This action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b (5)) as it has no potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment.
FISCAL IMPACT
There is no economic or fiscal impact with the exception of staff time in preparing this report.
COORDINATION
This report has been coordinated with the City Attorney’s Office and the Finance Department.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov <mailto:clerk@santaclaraca.gov> or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
Note and file Silicon Valley Power’s 2021 Power Content Label(s).
Staff
Reviewed by: Manuel Pineda, Chief Electric Utility Officer
Approved by: Rajeev Batra, City Manager
ATTACHMENTS
1. 2021 SVP Power Content Label for CEC
2. 2021 SVP Power Content Label Including SVP’s Overall Power Mix