REPORT TO COUNCIL
SUBJECT
Title
Action on a Resolution Delegating Authority to enter into Confirmation Agreements for Electric Industry Related Commodities [Council Pillar: Deliver and Enhance High Quality Efficient Services and Infrastructure]
Report
BACKGROUND
The City of Santa Clara Electric Department, Silicon Valley Power (SVP) currently has a diverse generation supply portfolio. In addition to producing energy, SVP has determined that in order to meet its obligation to serve customers effectively and reliably, wholesale electric commodities such as Energy, Resource Adequacy Capacity, Renewable Energy Credits, Carbon Allowances, Carbon Offsets, Ancillary Services, Low Carbon Fuel Standard Credits, or other future commodities created, produced, or needed by the City's Electric Department will need to be purchased, sold, or exchanged.
The purchase, sale, or exchange of these wholesale electric commodities allow the Electric Department to align its Load Serving Obligation and other legal compliance requirements for these commodities to those provided from its supply portfolio.
A trigger event this past year was that the California Public Utility Commission (CPUC) defined the rules concerning Resource Adequacy (RA) procurement for jurisdictional Load Serving Entities in California and issued two decisions which have changed the procurement process, (D.19-02-022 and D.19-06-026). In particular, D.19-02-022 requires a minimum three-year forward duration to the program requiring Load Serving Entities to show procurement plans detailing which specific resources will be available to meet their demand obligations. These multi-year procurement plans require each jurisdictional Load Serving Entity to show a minimum procurement percentage of 100% in years 1 and 2, and 50% in year 3. While SVP is not subject to the CPUC requirements directly, SVP inhabits the same electric market as CPUC jurisdictional Load Serving Entities and is impacted by changes in procureme...
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