The First CCA – in concept and context – could actually be PWRPA
To see a great example of how an efficient Community Choice Aggregation Program should be operated, look no further than the Power & Water Resources Pooling Authority (PWRPA).
PWRPA is a Joint Powers Authority of California Irrigation Districts that, along with Stakeholders made up of California Water Agencies and Districts, provides Retail Electric Service to hundreds of Mw’s of load in Northern and Central California.
Mr. Palmerton was responsible for creating the majority of the policies and procedures at PWRPA throughout his ten (10) years as General Manager. He wrote and administered the Authority’s Risk Management Policy, designed and managed the Authority’s Pool Cost Allocation Methodology, retail rates, RPS and GHG policies and procurement, Supplemental Power program and personally carried out the Power Procurement activities for PWRPA.
PWRPA’s annual retail load varied from a minimum of 300 Gwh in Wet hydrology years to a maximum of nearly 600 Gwh in Dry years. Load variability, (driven by surface water availability), market price volatility, hydro generation availability and renewable generation intermittency were key variables that drove price and performance of the PWRPA portfolio.
For ten years, Mr. Palmerton procured and managed a diverse set of resources, across a four (4) year rolling procurement horizon to meet the Risk Management targets set for the Authority.
These resources included Lg. hydro contracts (from WAPA), third party supply contracts, numbering between 5 and 9 contracts per month, in front of and behind the meter RPS resources, PWRPA owned generation and a portfolio of allocated and purchased CRR’s, and carbon allowances.
The General Manager was authorized to transact for Power Supply within broad guidelines as a mater of delegated authority. However, protocol was to manage the individual load and resources portfolios of each of PWRPA’s thirteen (13) “members” pursuant to the Authority’s Supplemental Power Program. Consequently, Mr. Palmerton secured participation percentages in bulk power purchased for PWRPA for each “member” based on that “member’s” pre-stated risk tolerance for going long or short in the market and for resource type.
These combined requirements were then managed pursuant to an overall Risk Management criteria to allow procurement actions to be taken to satisfy the combined forward hedge targets of the members and the overall Risk criteria applicable to the total retail service. The procurement effort effort was complex but manageable with the right tools and experience. The value in this complex approach was to provide a unique, risk adjusted, portfolio of power supply assets to each PWRPA member agency. These, and other techniques would directly apply to a multi-jurisdictional CCA where each jurisdiction desired its own resource portfolio and associated costs or retail rates. At a minimum, unique rate profiles by customer class could be managed and priced according to prescribed power supply objectives.
The procurement activities undertaken by Mr. Palmerton at the Pooling Authority were facilitated by close interactions with various Scheduling Coordinators. PWRPA employed the services of ACES Power Marketing as SC agent (PWRPA was the actual SC in the CAISO’s eyes), and indirectly Viasyn Inc. as SC for contracted Renewable Resources. Key elements of the SC interface include appropriate deal capture to make sure secured power supply, (or sales thereof) are captured by the SC “front” office and that transaction information flows through to the “Back” Office managing settlements.
Another key element included coordinating with the SC’s “Middle” Office, to be sure the various procurement vehicles, contracts and enabling agreements had appropriate credit support and transaction authority limits in place prior to real-time operations.
