Loading...
HomeMy WebLinkAboutAgenda Report - October 21, 2020 C-18AGENDA ITEM c-\8 Crrv or Lour Councn ConnMUNrcATroN TM AGENDA TITLE: MEETING DATE PREPARED BY: Adopt Resolution Approving Revised City of Lodi Electric Utility Renewables Portfolio Standard Procurement Plan and Enforcement Program October 21,2020 Electric Utility Director RECOMMENDED ACTION Adopt a resolution approving the Revised City of Lodi Renewables Portfolio Standard (RPS) Procurement Plan and Enforcement Program. BACKGROUND INFORMATION On October 7,2015, Senate Bill (SB) 350 was signed into law which mandated a 33 percent RPS target by 2020 and 50 percent RPS target by 2030. On September 10, 2018, SB 100 was signed into law which accelerates the RPS target to 50 percentby 2026 and 60 percent by 2030. Pursuant to Public Utilities Code, Section 399.30, Lodi Electric Utility (LEU) must adopt and implement a renewable energy resources procurement plan (RPS Procurement Plan) and a program for the enforcement of the RPS Procurement Plan (RPS Enforcement Program) and update these documents as appropriate. Attached as Exhibit A, the Revised City of Lodi Electric Utility Renewables Portfolio Standard Procurement Plan and Enforcement Program (Revised Plan), replaces the prior RPS Procurement Plan and Enforcement Program approved by the City Council on December 11 ,2011(Resolution 2011-195), on December 19, 2012 (Resolution 2012-206), and on November 20,2013 (Resolution 201 3-207) and reflects changes as a result of the most currently revised regulations. ln general, the Revised Plan outlines a strategy for fulfilling unmet long{erm generation resource needs that requires LEU to procure a minimum quantity of electricity products from eligible renewable energy resources, including renewable energy credits, as a specified percentage of the total kilowatt-hours sold to LEU's retail customers each compliance period to achieve specified procurement targets. The Revised Plan requires LEU, through the Risk Oversight Committee (ROC), to annually review the City's progress toward meeting RPS goals and determine whether reasonable progress is being made to sufficiently meet compliance year targets. lf targets are not being met, LEU has the ability to apply historic carryover from renewable energy procured through 2010 and/or review the applicability of applying excess procurement from prior compliance periods. ln addition, LEU may review the applicability and appropriateness of excusing performance based on cost limitation provisions included in the Revised Plan. ln addition to the accelerated posl2020 RPS requirements and cost limitation provision, the Revised Plan includes a required long-term procurement provision whereby starting in 2021, LEU must procure at least 65 percent of its RPS resources from contracts of 10 or more years in duration. APPROVED a Manager Adopt Resolution Approving Revised City of Lodi Electric Utility Renewables Portfolio Standard Procurement Plan and Enforcement Program October 21,2020 Page 2 of 2 Combined with historic carryover and excess surplus, LEU anticipates its existing RPS resources (geothermal, small hydro, solar) will meet RPS requirements through 2024.Two additional potential resources are currently under negotiation and if secured, would extend LEU's projected compliance through 2027. LEU staff will continue to bring fon¡uard to the ROC and evaluate the feasibility of additional renewable energy resources and opportunities to meet existing and future RPS requirements. The Risk Oversight Committee received a report on the Revised Plan at its August 24,2020 meeting and recommended City Council approval. FISCAL IMPACT:There is no direct financial impact associated with the development and approval of the Revised Plan. Any future purchases of RPS eligible resources will be considered for approval on a case-by-case basis. Not applicable.FUNDING ,.-t,l ?¿' ' Jeff Éeikheimer (Oct 7,2020 09:38 PDT) Jeff Berkheimer Electric Utility Director PREPARED BY: Jiayo Chiang, Electric Utility Resources Analyst Exhibit A City of Lodi Electric Utility Revised Renewables Portfolio Standard Procurement Plan and Enforcement Program Revised October 2020 City of Lodi Electric Utility Revised RPS Procurement Plan and Enforcement Program October 2020 2 Contents 1. Introduction ............................................................................................................................................ 3 2. Purpose (PUC section 399.30(a)) ............................................................................................................ 3 3. Compliance Periods (PUC section 399.30(b)) ......................................................................................... 4 4. Procurement Targets of Renewable Energy Resources for Each Compliance Period (PUC sections 399.30(c)(1) and (2)) ............................................................................................................................... 4 5. Reasonable Progress Towards Meeting Compliance Period Targets During Intervening Years (PUC section 399.30(c)(2)) .............................................................................................................................. 5 6. Procurement Requirements – Definitions for Content Categories (PUC section 399.30(c)(3)) ............. 6 7. Portfolio Balancing Requirements – Quantity for Content Categories (PUC section 399.30(c)(3), 399.16(c)(1) and (2)) ............................................................................................................................... 7 8. Long-term Contract Requirement (PUC sections 399.13(b) and 399.30(d)): ......................................... 7 9. Excess Procurement (PUC section 399.30(d)(1), PUC section 399.13(a)(4)(B)) ..................................... 8 10. Timely Compliance (PUC section 399.30(d)(2), PUC section 399.15(b)(5)) .......................................... 9 11. Greater Than 40% Large Hydro (PUC section 399.30(k)) .................................................................... 11 12. Cost Limitations for Expenditures (PUC section 399.30(d)(3), PUC section 399.15(c)) ...................... 11 13. Historic Carryover ............................................................................................................................... 13 14. Exclusive Control (PUC section 399.30(m)) ......................................................................................... 14 15. Reporting (PUC section 399.30(f), and 9605 – revised per AB 2196) ................................................. 14 16. Program Review .................................................................................................................................. 14 17. Plan Modifications/Amendments ....................................................................................................... 15 18. Voluntary Green Pricing and Shared Renewable Programs (PUC section 399.39(c)(4)) .................... 15 19. Enforcement Program of the RPS Procurement Plan ......................................................................... 15 City of Lodi Electric Utility Revised RPS Procurement Plan and Enforcement Program October 2020 3 1. Introduction This document presents the Revised Renewable Energy Resources Procurement Plan and Enforcement Program of the Lodi Electric Utility (LEU), as required for compliance with the California Renewables Portfolio Standard Program, Public Utilities Code Sections 399.11 - 399.33. Since first enacted, the state’s renewable portfolio standard (RPS) program has been amended to attain a target of generating 20 percent of total retail sales1 of electricity in California from eligible renewable energy resources by December 31, 2013, 33 percent by December 31, 2020, 50 percent by December 31, 2026, and 60 percent by December 31, 2030. Pursuant to Public Utilities Code (PUC) section 399.30(a), each POU must adopt and implement a renewable energy resources procurement plan (referred to herein as the “RPS Procurement Plan”) and a program for the enforcement of the RPS Procurement Plan Lodi Electric Utility’s RPS Procurement Plan, as reflected in Sections 1-18 below consists of: (1) plan elements that are directly mandated by the legislation; (2) measures that address each of the optional provisions set forth in Public Utilities Code (PUC) sections 399.30(d) and 399.30(c)(3) and section 3206 of the RPS Regulation; and (3) RPS reporting provisions. Where appropriate, this RPS Procurement Plan includes section citations to the Public Utilities Code sections 399.11, et seq, (Amended by Stats. 2018, Ch. 312, Sec. 4. (SB 100) effective January 1, 2019.) This RPS Procurement Plan also includes Lodi Electric Utility’s “Enforcement Program of the RPS Procurement Plan”. This is an update to the Revised RPS Procurement Plan and Enforcement Program adopted by the Lodi City Council on November 20, 2013. With all future resource needs, the Lodi Electric Utility (LEU), through the Risk Oversight Committee, shall apply this document, as approved by the City Council, to assure that the City's retail electric customers are provided at least a minimum quantity of electricity products from eligible renewable energy resources and products consistent with the targets set forth in this Plan. 2. Purpose (PUC section 399.30(a)) In order to fulfill unmet long-term generation resource needs, LEU adopts and implements this RPS Procurement Plan that requires the utility to procure a minimum quantity of electricity products from eligible renewable energy resources, including renewable energy credits, as a specified percentage of LEU’s total kilowatt hours sold to its retail end-use 1 Pursuant to section 3201 of the RPS Regulation. City of Lodi Electric Utility Revised RPS Procurement Plan and Enforcement Program October 2020 4 customers, each compliance period, to achieve the targets specified in PUC section 399.30(c). 3. Compliance Periods (PUC section 399.30(b)) A. Compliance Period 1: January 1, 2011, to December 31, 2013, inclusive. B. Compliance Period 2: January 1, 2014, to December 31, 2016, inclusive. C. Compliance Period 3: January 1, 2017, to December 31, 2020, inclusive. D. Compliance Period 4: January 1, 2021, to December 31, 2024, inclusive. E. Compliance Period 5: January 1, 2025, to December 31, 2027, inclusive. F. Compliance Period 6: January 1, 2028, to December 31, 2030, inclusive. G. Compliance Periods After 2030: Every Three Years 4. Procurement Targets of Renewable Energy Resources for Each Compliance Period (PUC sections 399.30(c)(1) and (2)) A. During Compliance Period 1, January 1, 2011 to December 31, 2013, LEU shall procure renewable energy resources equivalent to an average of at least twenty percent (20%) of retail sales. (EP 2011 + EP 2012 + EP 2013) > 0.20 * (RS 2011 + RS 2012 + RS 2013) RSx = total retail sales made by LEU for the specified year x EPx = electricity products retired for the specified year x; this may include excess procurement and historic carryover that LEU has chosen to apply to the compliance period containing year x B. By the end of Compliance Period 2, December 31, 2016, LEU shall procure renewable energy resources equivalent to at least twenty-five percent (25%) of retail sales. (EP 2014 + EP2015 + EP2016) > 0.20 * RS2014 + 0.20 * RS2015 + 0.25 * RS2016 C. By the end of Compliance Period 3, December 31, 2020, LEU shall procure renewable energy resources equivalent to at least thirty-three percent (33%) of retail sales. During the intervening years of Compliance Period 3, LEU shall increase procurement annually to reflect an imputed 2020 compliance obligation expressed as: (EP2017 + EP2018 + EP2019 + EP2020) > 0.27 * RS2017 + 0.29 * RS2018 + 0.31 * RS2019 + 0.33 * RS2020 D. By the end of Compliance Period 4, December 31, 2024, LEU shall procure renewable energy resources equivalent to at least forty-four percent (44%) of retail sales. During City of Lodi Electric Utility Revised RPS Procurement Plan and Enforcement Program October 2020 5 the intervening years of Compliance Period 4, LEU shall increase procurement annually to ensure that the quantities of eligible renewable energy resources to be procured during Compliance Period 4 reflect reasonable progress in each of the intervening years sufficient to ensure that the procurement of electricity products from eligible renewable energy resources achieves 44% by 2024. E. By the end of Compliance Period 5, December 31, 2027, LEU shall procure renewable energy resources equivalent to at least fifty-two percent (52%) of retail sales. During the intervening years of Compliance Period 5, LEU shall increase procurement annually to ensure that the quantities of eligible renewable energy resources to be procured during Compliance Period 5 reflect reasonable progress in each of the intervening years sufficient to ensure that the procurement of electricity products from eligible renewable energy resources achieves 52% by 2027. F. By the end of Compliance Period 6, December 31, 2030, LEU shall procure renewable energy resources equivalent to at least sixty percent (60%) of retail sales. During the intervening years of Compliance Period 6, LEU shall increase procurement annually to ensure that the quantities of eligible renewable energy resources to be procured during Compliance Period 6 reflect reasonable progress in each of the intervening years sufficient to ensure that the procurement of electricity products from eligible renewable energy resources achieves 60% by 2030. G. Commencing on December 31, 2033, and every three years thereafter, LEU shall procure renewable energy resources equivalent to at least sixty percent (60%) of retail sales. The procurement targets listed above are minimum requirements. The Lodi City Council may determine that a higher percentage of renewable energy resources is appropriate in any given compliance period. The method used to determine the actual renewable energy resource percentage achieved for a given calendar year shall be to: (i) sum the total metered generation from each of LEU’s eligible renewable resources and qualifying purchases in megawatt hours (MWhs) during the preceding calendar year, (ii) subtract sales, if any, of eligible renewable resources during the same time period, and (iii) divide the result by the total energy sold to LEU’s retail end-use customers (in MWhs) in the same time period. 5. Reasonable Progress Towards Meeting Compliance Period Targets During Intervening Years (PUC section 399.30(c)(2)) LEU shall demonstrate reasonable progress towards meeting compliance period targets during intervening years by ensuring that renewable energy contracts are in place or under solicitation to meet the projected increase in RPS procurement for each compliance period. This demonstration shall be set forth in LEU’s annual report. City of Lodi Electric Utility Revised RPS Procurement Plan and Enforcement Program October 2020 6 6. Procurement Requirements – Definitions for Content Categories (PUC section 399.30(c)(3)) In order to achieve a balanced portfolio, LEU’s RPS Procurement Plan shall consist of procurement Content Categories that meet the criteria for the following eligible renewable energy resource electricity products, as defined in PUC section 399.16(b): A. Content Category 1 (consistent with PUC section 399.16(b)(1): Resources in this category shall either: i. Have a first point of interconnection with a California balancing authority, have a first point of interconnection with distribution facilities used to serve end users within a California balancing authority area, or are scheduled from the eligible renewable energy resource into a California balancing authority without substituting electricity from another source. The use of another source to provide real-time ancillary services required to maintain an hourly or sub hourly import schedule into a California balancing authority shall be permitted, but only the fraction of the schedule actually generated by the eligible renewable energy resource shall count toward this portfolio content category. ii. Have an agreement to dynamically transfer electricity to a California balancing authority. B. Content Category 2 (consistent with PUC section 399.16(b)(2)): Resources in this category shall include firmed and shaped eligible renewable energy resource electricity products providing incremental electricity and scheduled into a California balancing authority. C. Content Category 3 (consistent with PUC section 399.16(b)(3)): Resources in this category shall include eligible renewable energy resource electricity products, or any fraction of the electricity generated, including unbundled renewable energy credits, that do not qualify under the criteria of Content Category 1 or Content Category 2. D. Grandfathered Resources (PUC section 399.16(d)): Any contract or ownership agreement originally executed prior to June 1, 2010, shall count in full towards the procurement requirements, if all of the following conditions are met: i. The renewable energy resource was eligible under the rules in place as of the date when the contract was executed. ii. Any contract amendments or modifications occurring after June 1, 2010, do not increase the nameplate capacity or expected quantities of annual generation, or City of Lodi Electric Utility Revised RPS Procurement Plan and Enforcement Program October 2020 7 substitute a different renewable energy resource. iii. The duration of the contract may be extended if the original contract specified a procurement commitment of fifteen (15) or more years. iv. “Eligible renewable energy resource” means an electrical generating facility that meets the definition of a “renewable electrical generation facility” in Section 25741 of the Public Resources Code, subject to the following: A facility approved by the governing board of a local publicly owned electric utility prior to June 1, 2010, for procurement to satisfy renewable energy procurement obligations adopted pursuant to former Section 387, shall be certified as an eligible renewable energy resource by the Energy Commission pursuant to this article, if the facility is a “renewable electrical generation facility” as defined in Section 25741 of the Public Resources Code. (PUC section 399.12(e)(1)(C)). Resources procured prior to June 1, 2010 shall be counted for RPS compliance without regard to the limitations on the use of each portfolio Content Category as described in Section 6. 7. Portfolio Balancing Requirements – Quantity for Content Categories (PUC section 399.30(c)(3), 399.16(c)(1) and (2)) The following portfolio balancing requirements shall apply to LEU’s RPS procurement: A. For Compliance Period 1, LEU shall procure not less than fifty percent (50%) of the eligible renewable energy resource electricity products associated with contracts executed after June 1, 2010 from Content Category 1, and not more than twenty-five percent (25%) from Content Category 3. B. For Compliance Period 2, LEU shall procure not less than sixty-five percent (65%) of the eligible renewable energy resource electricity products associated with contracts executed after June 1, 2010 from Content Category 1, and not more than fifteen percent (15%) from Content Category 3. C. For Compliance Period 3, and annually thereafter, LEU shall procure not less than seventy-five percent (75%) of the eligible renewable energy resource electricity products associated with contracts executed after June 1, 2010 from Content Category 1, and not more than ten percent (10%) from Content Category 3. 8. Long-term Contract Requirement (PUC sections 399.13(b) and 399.30(d)): Beginning January 1, 2021, with Compliance Period 4, at least sixty-five percent (65%) of LEU’s renewables portfolio standard procurement for each compliance period shall be from contracts of 10 years or more in duration or ownership or ownership agreements for eligible renewable energy resources. City of Lodi Electric Utility Revised RPS Procurement Plan and Enforcement Program October 2020 8 9. Excess Procurement (PUC section 399.30(d)(1), PUC section 399.13(a)(4)(B)) LEU shall be allowed to apply excess procurement (Excess Procurement) from one compliance period to subsequent compliance periods. A. For Compliance Periods 1 -3, the following conditions must be met: i. LEU may accumulate, beginning on January 1, 2011, Excess Procurement from one Compliance Period to be applied in any subsequent Compliance Period. ii. In calculating the quantity of Excess Procurement, LEU shall deduct from actual procurement quantities, the total amount of procurement associated with contracts of less than ten (10) years in duration. iii. Eligible resources must be from Content Category 1 or Content Category 2 or Grandfathered Resources to be Excess Procurement. iv. Resources from Content Category 3 shall not be counted as Excess Procurement. B. Beginning with Compliance Periods 4 and for all subsequent Compliance Periods, the following conditions apply: i. For electricity products from Portfolio Content Category 1, contracts of any duration may count as Excess Procurement. ii. Electricity products from Portfolio Content Category 2 shall not be counted as Excess Procurement. iii. Contracts of any duration for electricity products meeting the Portfolio Content Categories 2 or 3 that are credited towards a compliance period shall not be deducted from POU’s procurement for purposes of calculating Excess Procurement. C. If sixty-five percent (65%) of LEU’s procurement for Compliance Period 3, ending December 31, 2020 is from contracts of 10 years or more in duration or in its ownership or ownership agreements for eligible renewable energy resources, LEU may apply the excess procurement provisions of subsection B above for that Compliance Period. City of Lodi Electric Utility Revised RPS Procurement Plan and Enforcement Program October 2020 9 10. Timely Compliance (PUC section 399.30(d)(2), PUC section 399.15(b)(5)) A. Waiver of Timely Compliance Enforcement of timely compliance with minimum procurement quantities per PUC section 399.15 and section 6 above shall be waived if LEU demonstrates that any of the following conditions are beyond LEU control, and will prevent timely compliance: i. Inadequate Transmission (PUC section 399.15(b)(5)(A)): There is inadequate transmission capacity to allow for sufficient electricity to be delivered from LEU’s proposed eligible renewable energy resource projects using the current operational protocols of LEU’s Balancing Authority, the California Independent System Operator (CAISO). In making its findings relative to the existence of this condition, LEU’s deliberations shall include, but not be limited to the following: (1) Whether LEU has undertaken, in a timely fashion, reasonable measures under its control and consistent with its obligations under local, state, and federal laws and regulations, to develop and construct new transmission lines or upgrades to existing lines intended to transmit electricity generated by eligible renewable energy resources. In determining the reasonableness of LEU’s actions, LEU shall consider its expectations for full-cost recovery for these transmission lines and upgrades, and (2) Whether LEU has taken all reasonable operational measures to maximize cost- effective deliveries of electricity from eligible renewable energy resources in advance of transmission availability. ii. Permitting, interconnection, or other factors that delayed projects, or procurement, or there is insufficient supply of eligible renewable energy resources available to LEU (PUC section 399.15(b)(5)(B)). In making its findings relative to the existence of this condition, LEU’s deliberations shall include, but not be limited to the following: (1) Whether LEU prudently managed portfolio risks, including relying on a sufficient number of viable projects; (2) Whether LEU sought to develop one of the following: its own eligible renewable energy resources, transmission to interconnect to eligible renewable energy resources, or energy storage used to integrate eligible renewable energy resources; (3) Whether LEU procured an appropriate minimum margin of procurement above the minimum procurement level necessary to comply with the renewables portfolio standard to compensate for foreseeable delays or insufficient supply; City of Lodi Electric Utility Revised RPS Procurement Plan and Enforcement Program October 2020 10 (4) Whether LEU took reasonable measures, under its control to procure cost- effective distributed generation and allowable unbundled renewable energy credits; (5) Whether actions or events beyond the control of LEU have adversely impacted timely deliveries of renewable energy resources including, but not limited to, acts of nature, terrorism, war, labor difficulty, civil disturbance, or market manipulation. iii. Unanticipated curtailment of eligible renewable energy resources if the waiver would not result in an increase in greenhouse gas emissions. (PUC section 399.15(b)(5)(C)). iv. Unanticipated increase in retail sales due to transportation electrification. In making a finding that this condition prevents timely compliance, LEU shall consider both of the following: (1) Whether transportation electrification significantly exceeded forecasts in LEU’s service territory based on the best and most recently available information filed with the State Air Resources Board, the Energy Commission, or another state agency. (2) Whether LEU took reasonable measures to procure sufficient resources to account for unanticipated increases in retail sales due to transportation electrification. B. Portfolio Balance Requirement Reduction (Section 3206(a)(4)) (PUC sections 399.16(e), 399.30(c)(3)) i. Lodi Risk Oversight Committee may determine that a reduction of the procurement content requirement is warranted for any compliance period to the extent that LEU demonstrates that it cannot comply with the balancing requirement because of conditions beyond LEU’s control as provided in PUC section 399.15(b)(5) and subsection A above. ii. LEU shall not, under any circumstances, reduce the obligation to procure Content Category 1 resources below 65% for any compliance period obligation after December 31, 2016. C. Procedures Upon Approving Waiver: In the event of a Waiver of Timely Compliance due to any of the factors set forth above, LEU shall implement the following procedures: City of Lodi Electric Utility Revised RPS Procurement Plan and Enforcement Program October 2020 11 i. Establish additional reporting for intervening years to demonstrate that reasonable actions under the LEU’s control are being taken (PUC section 399.15(b)(6)). ii. Require a demonstration that all reasonable actions within LEU’s control have been taken to ensure compliance in order to grant the waiver (PUC section 399.15(b)(7)). D. Prior Deficits: In no event shall deficits from prior compliance periods be added to future compliance periods (PUC section 399.15(b)(9)). 11. Greater Than 40% Large Hydro (PUC section 399.30(k)) A. If, during any Compliance Period, LEU receives more than 40 percent of its retail sales from large hydroelectric generation under an ownership agreement or contract in effect as of January 1, 2018, LEU is not required to procure eligible renewable energy resources that exceed the lesser of subpart i or ii for that year, and LEU’s compliance obligation during that compliance period shall be adjusted such that the total quantities of eligible renewable energy resources to be procured shall reflect such reductions: i. The portion of LEU’s retail sales unsatisfied by LEU’s large hydroelectric generation. ii. The soft target adopted by the Energy Commission for the intervening years of the relevant compliance period, or for those years where soft targets are not adopted, a showing of progress as defined in section 5 herein. B. An extension or renewal of a procurement agreement shall not be eligible to count towards the determination that the local publicly owned electric utility receives more than 40 percent of its retail sales from large hydroelectric generation in any year, except for any agreement in effect on January 1, 2015, between a local publicly owned electric utility and the Western Area Power Administration or federal government as part of the federal Central Valley Project. C. This adjustment does not modify LEU’s compliance obligation to satisfy the Portfolio Balancing Requirements above. 12. Cost Limitations for Expenditures (PUC section 399.30(d)(3), PUC section 399.15(c)) City of Lodi Electric Utility Revised RPS Procurement Plan and Enforcement Program October 2020 12 A. LEU, at its sole discretion, may elect to establish cost limitations for all eligible renewable energy resources used to comply with the renewables portfolio standard that is set at a level that prevents disproportionate rate impacts. In ensuring that customers do not face a disproportionate burden, the Lodi Risk Oversight Committee has the authority to implement a cost limitation provision which may result in a temporary suspension of RPS compliance activities. This cost limitation provision may be implemented on an annual basis (intervening year) and/or for a Compliance Period, as authorized by the Lodi Risk Oversight Committee and may be implemented regardless of available historic carryover and/or excess procurement. The Lodi Risk Oversight Committee shall notify the Lodi City Council via Quarterly Utility Updates to the Council if cost limitation provisions have been implemented. B. This section establishes a cost limitation provision that will be triggered if the rate impact on LEU customers related to the procurement of renewable energy attributes exceeds $0.005/kwh during a particular intervening year and/or Compliance Period. C. LEU will, after reviewing and obtaining approval from the Lodi Risk Oversight Committee, take the following actions if the cost limitation provision is activated during an intervening year and/or Compliance Period: ndn i. Adjust the RPS incremental expenditure into Lodi’s resource portfolio so that the rate impact does not exceed $0.005 cent/kWh 𝐑𝐑𝐑𝐑𝐑𝐑 𝐈𝐈𝐈𝐈𝐈𝐈𝐈𝐈𝐈𝐈𝐈𝐈𝐈𝐈𝐈𝐈𝐈𝐈𝐈𝐈𝐈𝐈 𝐄𝐄𝐄𝐄𝐄𝐄𝐈𝐈𝐈𝐈𝐄𝐄𝐄𝐄𝐈𝐈𝐄𝐄𝐈𝐈𝐈𝐈 ($)𝑅𝑅𝑅𝑅𝑅𝑅 𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅 𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑆𝑆 (𝑘𝑘𝑘𝑘ℎ) ≤ $0.005/𝑘𝑘𝑘𝑘ℎ RPS Incremental Expenditure = LEU Total RPS procurement cost minus the associated non-renewable energy cost2 ii. Incorporating the costs of the completed RPS procurement3 that will be delivered in the future years. The cost limitation threshold identified herein will be applied for the subsequent 5 years. D. When applying the cost limitation defined herein, the City shall rely on this RPS Procurement Plan, as well as: i. Procurement expenditures that approximate the expected cost of building, owning, and operating eligible renewable energy resources; and ii. The potential that some planned resource additions may be delayed or cancelled. 2 The non-renewable cost is calculated based on CAISO Day-Ahead Market (DAM) NP15 actual price and energy market forward price forecast used in LEU’s annual energy cost budgeting processes. 3 The Commercial Operation Date (COD) of a signed renewable energy contract is later than the current year City of Lodi Electric Utility Revised RPS Procurement Plan and Enforcement Program October 2020 13 E. When evaluating the potential use of this cost limitation provision, the following will be taken into consideration: i. Grandfathered resources will not be included in the cost limitation calculation. ii. The cost limitation calculation will only apply to the renewable attribute portion of the energy procurement. For contracts that do not split the price between the energy component and the renewable attribute, the CAISO market energy price will be used to determine the remaining portion (renewable attribute) of the cost. iii. Renewable attribute that is generated and purchased in one compliance period, but is counted towards compliance in a subsequent compliance period, will be applied against the cost limitations in the compliance period in which it is counted. . iv. The power supply forecast from LEU’s annual budgeting process will be used to calculate the annual RPS cost limitations. F. LEU continuously monitors its expenditure levels and will advise the Lodi Risk Oversight Committee annually of its RPS expenditures when the thresholds to implement its cost limitation are met or fall below the cost limitation thresholds to resume RPS Procurement Plan requirements. F. LEU shall review the need for cost limitations and the rate impact limit as part of the annual budget process described in this RPS Procurement Plan. 13. Historic Carryover A. LEU, at its sole discretion, may elect to adopt rules that allow for procurement generated before January 1, 2011 that meets the criteria of Section 3202 (a)(2), that is in excess of the sum of the 2004-2010 annual procurement targets defined in Section 3206(a)(5)(D) and that was not applied to the RPS of another state or to a voluntary claim, to be applied to the LEU’s RPS procurement target for the compliance period ending December 31, 2013, or for any subsequent compliance period. B. Both the historic carryover and the procurement applied to the LEU’s annual procurement target must be from eligible renewable resources that were RPS-eligible under the rules in place at the time of execution of ownership agreement. i. Historic carryover must be procured pursuant to a contract or ownership agreement executed before June 1, 2010. C. Historic carryover will be calculated based on the following: City of Lodi Electric Utility Revised RPS Procurement Plan and Enforcement Program October 2020 14 i. A baseline of an amount equal to 2001 procurement divided by 2001 retail sales, multiplied by 2003 total retail sales, plus one percent of 2001 retail sales. ii. Annual procurement targets for 2004-2010 that are equal to the lesser of 20 percent of the previous year’s retail sales or 1 percent of the previous year’s retail sales greater than the annual procurement target for the previous year. D. All applicable historic procurement claims for January 1, 2004 – December 31, 2010, baseline calculations, annual procurement target calculations, and any other pertinent data must be submitted to the California Energy Commission by January 1, 2014. 14. Exclusive Control (PUC section 399.30(m)) In all matters regarding compliance with the RPS Procurement Plan, LEU shall retain exclusive control and discretion over the following: A. The mix of eligible renewable energy resources procured by LEU and those additional generation resources procured by LEU for purposes of ensuring resource adequacy and reliability. B. The reasonable costs incurred by LEU for eligible renewable energy resources owned by it. 15. Reporting (PUC section 399.30(f), and 9605 – revised per AB 2196) A. Deliberations on Procurement Plan (PUC section 399.30(f)): i. Public Notice: LEU shall post notice of meetings if the Council will deliberate in public regarding this RPS Procurement Plan. ii. Documents and Materials Related to Procurement Status and Plans: When LEU provides information to the City Council related to its renewable energy resources procurement status and future plans, for the City Council’s consideration at a noticed public meeting, LEU shall make that information available to the public. B. Compliance Reporting (per Section 3207): i. Annual Reports – by July 1 for each year (see Section 3206(c)) ii. Compliance Period Reports – by July 1 of 2014, 2017, 2021, and annually thereafter. (see Section 3207(d)) 16. Program Review LEU’s RPS Procurement Plan shall be reviewed by the Lodi Risk Oversight Committee in accordance with LEU’s Renewable Portfolio Standard Enforcement Program. City of Lodi Electric Utility Revised RPS Procurement Plan and Enforcement Program October 2020 15 17. Plan Modifications/Amendments This RPS Procurement Plan may be modified or amended by an affirmative vote of the Lodi City Council during a public meeting at the recommendation of the Lodi Risk Oversight Committee. Any Lodi City Council action to modify or amend the RPS Procurement Plan must be publicly noticed in accordance with Section 15. 18. Voluntary Green Pricing and Shared Renewable Programs (PUC section 399.39(c)(4)) LEU may at a future date initiate a “Voluntary Green Pricing or Shared Renewable Generation Programs.” The purpose of these programs is to provide customers options for alternative renewable energy products that are not part of LEU’s portfolio used to serve its retail load. The following provisions will apply to any such programs should they be initiated: A. The kilowatt hours generated by an eligible renewable energy resource that is PCC 1 or PCC 0 that is credited to a participating customer pursuant to such programs shall be excluded from LEU’s retail sales for purposes of determining its RPS procurement requirements. B. Any renewable energy credits associated with electricity credited to a participating customer shall not be used for compliance with procurement requirements under this article, shall be retired on behalf of the participating customer, and shall not be further sold, transferred, or otherwise monetized for any purpose. C. To the extent possible for generation that is excluded from retail sales under this subdivision, LEU shall seek to procure those eligible renewable energy resources that are located in reasonable proximity to program participants; provided, however, that LEU is not prohibited from seeking resources in alternate locales if suitable warranted. 19. Enforcement Program of the RPS Procurement Plan A. Lodi Electric Utility (LEU) shall have a program for the enforcement of the RPS Procurement Plan, which shall include all of the provisions, set forth herein and shall be included in the LEU RPS Procurement Plan. B. Annual review by the Lodi Risk Oversight Committee of the RPS Procurement Plan for each year from 2011 through 2030 shall ensure that LEU is making reasonable progress as defined in Section 5 of the RPS Procurement Plan. C. Compliance Period review of the RPS Procurement Plan shall include consideration of each of the following elements: City of Lodi Electric Utility Revised RPS Procurement Plan and Enforcement Program October 2020 16 i. By December 31 of each year following the end of a Compliance Period: 1. Verify that LEU has met the procurement targets of renewable energy procurement for each compliance period defined in Section 3 of the RPS Procurement Plan. 2. If targets are not met, LEU must: (1) Review the applicability of applying Excess Procurement from previous Compliance Periods consistent with the provisions of the RPS Procurement Plan. (2) Ensure that any Waiver of Timely Compliance was compliant with the provisions in the RPS Procurement Plan. (3) Review the applicability and appropriateness of excusing performance based on the Cost Limitations for Expenditures provisions of the RPS Procurement Plan. (4) Ensure that any Portfolio Balance Requirement Reduction was compliant with the provisions of the RPS Procurement Plan. D. If it is determined that LEU has failed to comply with the provisions of its RPS Procurement Plan, the Lodi Risk Oversight Committee shall take steps to correct any untimely compliance, including: i. Reviewing LEU’s RPS Procurement Plan to determine what changes, if any, are necessary to ensure compliance in the next Compliance Period. ii. Report quarterly to the City Council regarding the progress being made toward meeting the compliance obligation for the next Compliance Period. iii. Report to the City Council regarding the status of meeting subsequent compliance period targets, and all steps being taken to ensure that the obligation is timely met.