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Town Council Meeting February 9, 2016 Page 1

TOWN OF WOODSIDE

Report to Town Council Agenda Item 5

Prepared by: Kevin Bryant, Town Manager February 9, 2016

SUBJECT: PENINSULA CLEAN ENERGY: ADOPTION OF AN ORDINANCE

AUTHORIZING THE IMPLEMENTATION OF A COMMUNITY CHOICE

AGGREGATION PROGRAM

RECOMMENDATION

It is recommended that the Town Council adopt the attached draft

ordinance (Attachment 1) which authorizes the implementation of a

community choice aggregation program within the Town of Woodside.

BACKGROUND AND DISCUSSION

On January 26, 2016, the Town Council introduced the attached draft

ordinance which would authorize the implementation of a community

choice program within the Town of Woodside. At the same meeting, the

Town Council adopted Resolution 2016-7082 (Attachment 2), which

directed the Mayor to execute the Joint Exercise of Powers Agreement

establishing the Peninsula Clean Energy Authority with the Town of

Woodside as a charter member. The staff report for the January 26th

meeting, without attachments, is included as Attachment 3.

To complete the process for authorizing Peninsula Clean Energy within

the Town of Woodside, the Town Council needs to adopt the attached

draft ordinance at its second reading on February 9th. The Mayor

should also appoint a Councilmember to be on the Peninsula Clean

Energy governing board, and another Councilmember or staff member as

an alternate to the governing board.

OTHER CITIES

As of February 2nd, the Towns of Atherton, Portola Valley and Woodside

and the Cities of San Mateo, Menlo Park, Half Moon Bay, East Palo

Alto, Daly City, San Carlos, Belmont, Burlingame and Foster City have

joined the County of San Mateo in Peninsula Clean Energy.

The Town of Colma and the Cities of Redwood City, San Bruno, Pacifica,

and Millbrae have Peninsula Clean Energy on an upcoming agenda for

consideration.

CONCLUSION

Adoption of the attached draft ordinance will complete the process of

joining Peninsula Clean Energy.

ATTACHMENTS

1. Draft Ordinance

2. Resolution 2016-7082

3. January 26, 2016 Staff Report (without attachments)

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ORDINANCE NO. 2016 -

AN ORDINANCE OF THE TOWN OF WOODSIDE AUTHORIZING THE IMPLEMENTATION OF A COMMUNITY CHOICE AGGREGATION

PROGRAM

The Town Council of the Town of Woodside hereby ordains as follows:

FINDINGS. In conjunction with the County of San Mateo and other cities and towns within San Mateo County, the Town Council has investigated options to provide electrical services to customers within the Town of Woodside with the intent of achieving greater local control and involvement over the provision of electrical service, competitive rates, the development of clean, local, renewable energy projects, reduced greenhouse gas emissions, and the wider implementation of energy conservation and efficiency projects and programs; and hereby finds and declares as follows:

WHEREAS, the County of San Mateo prepared a Feasibility Study for a community choice aggregation (“CCA”) program in San Mateo County, with the cooperation of the cities and towns, including the Town of Woodside, under the provisions of the Public Utilities Code Section 366.2. The Feasibility Study shows that implementing a CCA program would provide multiple benefits, including:

Providing customers a choice of power providers;

Increasing local control and involvement in and collaboration on energy rates and other energy-related matters;

Providing more stable long-term electric rates that are competitive with those provided by the incumbent utility;

Reducing greenhouse gas emissions arising from electricity use within San Mateo County;

Increasing local renewable generation capacity;

Increasing energy conservation and efficiency projects and programs;

Increasing regional energy self-sufficiency;

Improving the local economy resulting from the implementation of local renewables and energy conservation and efficiency projects; and

WHEREAS, the County of San Mateo Board of Supervisors has directed staff to

bring for its approval a Joint Powers Agreement creating the Peninsula Clean Energy Authority (“Authority”). Under the Joint Powers Agreement, cities and towns within San Mateo County may participate in the Peninsula Clean Energy CCA program by adopting the resolution and ordinance required by Public Utilities Section 366.2. Cities and towns choosing to participate in the CCA program will have membership on the Board of Directors of the Authority as provided in the Joint Powers Agreement; and

WHEREAS, the Authority will enter into Agreements with electric power suppliers

and other service providers, and based upon those Agreements the Authority will be

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able to provide power to residents and businesses at rates that are competitive with those of the incumbent utility. Once the California Public Utilities Commission approves the implementation plan created by the Authority, the Authority will provide service to customers within the unincorporated area of San Mateo County and within the jurisdiction of those cities and towns who have chosen to participate in the CCA program; and

WHEREAS, under Public Utilities Code Section 366.2, customers have the right

to opt-out of a CCA program and continue to receive service from the incumbent utility. Customers who wish to continue to receive service from the incumbent utility will be able to do so; and

WHEREAS, this ordinance is exempt from the requirements of the California Environmental Quality Act (“CEQA”) pursuant to the CEQA Guidelines, as it is not a “project” as it has no potential to result in a direct or reasonably foreseeable indirect physical change to the environment. (14 Cal. Code Regs. § 15378(a)). Further, the ordinance is exempt from CEQA as there is no possibility that the ordinance or its implementation would have a significant effect on the environment. (14 Cal. Code Regs. § 15061(b)(3)). The ordinance is also categorically exempt because it is an action taken by a regulatory agency to assume the maintenance, restoration, enhancement or protection of the environment. (14 Cal. Code Regs. § 15308). The Planning Director shall cause a Notice of Exemption to be filed as authorized by CEQA and the CEQA Guidelines. NOW, THEREFORE, THE TOWN COUNCIL OF THE TOWN OF WOODSIDE DOES ORDAIN AS FOLLOWS: Section 1. The above recitations are true and correct and material to this ordinance. Section 2. Based upon the forgoing, and in order to provide residents and businesses within the Town of Woodside with a choice of power providers and with the benefits described above, the Town Council of the Town of Woodside ordains that it shall implement a CCA program within its jurisdiction by participating as a group with the County of San Mateo and other cities and towns as described above in the CCA program of the Peninsula Clean Energy Authority, as generally described in the Joint Powers Agreement. Section 3. This Ordinance shall be in full force and effect 30 days after its adoption, and shall be published and posted as required by law.

* * * * * I, the undersigned, do hereby certify that the foregoing Ordinance is a full, true and

correct copy of Ordinance No. 2016 - of the Town of Woodside; that it was introduced

at a regular meeting of the Town Council held on the 26th day of January 2016, and

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adopted thereafter at a regular meeting of the Town Council held on the 9th day of

February 2016, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

Clerk of the Town of Woodside

APPROVED:

Mayor of the Town of Woodside

______________________________________________________________________ Town Council Meeting January 26, 2016 Page 1

TOWN OF WOODSIDE

Report to Town Council Agenda Item 3 Prepared by: Kevin Bryant, Town Manager January 26, 2016 SUBJECT: PENINSULA CLEAN ENERGY: (1) INTRODUCTION OF AN ORDINANCE

AUTHORIZING THE IMPLEMENTATION OF A COMMUNITY CHOICE AGGREGATION PROGRAM AND (2) RESOLUTION AUTHORIZING AND DIRECTING THE MAYOR TO EXECUTE THE JOINT EXERCISE OF POWERS AGREEMENT, WHICH WILL ESTABLISH THE PENINSULA CLEAN ENERGY AUTHORITY WITH THE TOWN OF WOODSIDE AS A CHARTER MEMBER

RECOMMENDATION It is recommended that the Town Council review and introduce the attached draft ordinance and adopt the attached draft resolution to join the Peninsula Clean Energy (PCE) Joint Powers Authority (JPA). PCE is a Community Choice Aggregation (CCA) effort led by San Mateo County. BACKGROUND California Assembly Bill 117, passed in 2002, allows California cities and counties to pool the electric load of their residents, businesses and public facilities in order to purchase and develop clean electricity – Community Choice Aggregation. Community Choice Aggregation is a mechanism by which local governments assume responsibility for providing electrical power for residential and commercial customers in their jurisdiction in partnership with Pacific Gas & Electric Company (PG&E). Community Choice Aggregation also provides the opportunity to fund and implement a wide variety of energy related programs of interest to the community. On February 24, 2015, the Town Council adopted Resolution 2015-7032, which authorized the Town’s participation in the pre-development and feasibility exploration phase of Community Choice Aggregation in partnership with San Mateo County. The product of that exploration work is the Draft Peninsula Clean Energy CCA Technical Study1. With the pre-planning and due diligence work complete, the County is now moving into the planning and development phase for Peninsula Clean Energy and conducting community outreach. Representatives from San Mateo County, Supervisor Dave Pine, Seth Baruch from LEAN Energy (the program consultant), and David Silberman from the Office of County Counsel were in attendance at the December 8th Town Council meeting to present information about Peninsula Clean Energy and to answer questions about the program. Attachment 3 is the slide deck from the Power Point presentation the representatives made.

1 The full Technical Study can be viewed at http://green.smcgov.org/sites/green.smcgov.org/files/documents/files/DRAFT%20Peninsula%20Clean%20Energy%20CCA%20Technical%20Study_9%2018%202015.pdf.

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DISCUSSION In September 2015, San Mateo County released its Draft Peninsula Clean Energy CCA Technical Study on the CCA, which estimates greenhouse gas (GHG) reductions and costs for three levels of renewable electric power. The Technical Study indicates that PCE would be financially viable and provide GHG reductions. The Technical Study evaluated three main options for renewable power, a 35% renewable scenario, a 50% renewable scenario, and a 100% renewable scenario. In general terms, the Technical Study indicates that the Peninsula Clean Energy program could be economically viable while achieving the County’s environmental objectives. With the results of the Technical Study now available, the County believes it has sufficient market data to design a program and create energy products that will be both economically viable and environmentally beneficial. County staff and the PCE consultant planning team will investigate and recommend a range of energy products and supply portfolios that will be available to customers when PCE launches in the fall of 2016. In addition, PCE programs are likely to include net energy metering, community based solar, and/or feed-in-tariff programs to encourage local power development, among other energy services. JPA FORMATION PROCESS The Public Utilities Code (Section 366.2(c)(12)(B)) contemplates creation of a JPA so that a county and a city/town or cities and towns can “participate as a group in a community choice aggregation program.” In order to create a CCA program, the County and each participating city or town must take two formal actions: (1) entering into a Joint Powers Agreement forming a JPA under Section 6500, et seq. of the Government Code; and (2) adopting an Ordinance “elect[ing] to implement a community choice aggregation program within its jurisdiction” as required by Section 366.2(c)(12)(A). The framework of the proposed JPA agreement (Attachment 1a) originated from a similar agreement that was used to form the Sonoma Clean Power CCA program. Some key terms that are included in the JPA Agreement are as follows:

• Each city or town will have a member on the JPA Board, represented by an elected public official.

• Each city or town can also appoint an alternative to the JPA Board which can either be an elected public official or a staff member.

• The JPA will have a two-tiered voting system based on both majority vote as well as a weighted vote that takes into account the energy use within the jurisdiction so as to create a fair balance of power among the members.

• Any liabilities of the JPA are incurred by the JPA and not the constituent members.

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• Constituent members may withdraw from the JPA without financial obligation if prior to launch it is clear that the JPA is unable to provide, as part of its baseline offering, electrical rates 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.

Whatever the final energy products that will be developed by PCE, under Public Utilities Code Section 366.2, customers have the right to opt-out of PCE and continue to receive service from their existing utility. However, if the Town of Woodside does not join PCE, through adoption of the attached draft ordinance and resolution authorizing participation in the Joint Powers Agreement, residents and businesses within the Town cannot elect to receive their power through PCE. OTHER CITIES As of January 20th, the Town of Atherton and the Cities of San Mateo, Menlo Park, Half Moon Bay, and East Palo Alto have joined the County of San Mateo in PCE. The Town of Portola Valley and the Cities of San Carlos, Daly City, Pacifica, and Belmont have joining PCE on their agenda for the week of January 25th. The Town of Colma and the Cities of Foster City, Burlingame, and Millbrae have joining PCE on their agenda for the week of February 1st. CONCLUSION Staff recommends that the Town Council authorize participation in Peninsula Clean Energy at this time. ATTACHMENTS

1. Draft Ordinance 2. Draft Resolution

a. Joint Exercise of Powers Agreement Relating to and Creating the Peninsula Clean Energy Authority of San Mateo County

3. County Presentation to Town Council, December 8, 2015.