When I step down from the City Council in January 2023, one of the things I will miss most is MCE (Community Choice Energy). I have represented Richmond on the board of MCE since the City joined in 2013, and I have served as board chair and president for the last four years. I want to share the accomplishments of the past year, which has been another groundbreaking year for MCE, filled with accomplishments, challenges and opportunities. From supporting our customers during the COVID-19 pandemic, to building long-term clean energy resources, MCE’s impact stretches across California and beyond.

Figure 1- 10.5 megawatt MCE Solar 1 in Richmond
Operational Initiatives

• Launched service to 40,000 new customers in Fairfield in April 2022.
• Successfully brought all of MCE’s customer service activities, including our call-center,
• in-house, increasing customer satisfaction with shorter call times, faster email responses and greater customer retention.
• Completed the creation of our in-house data warehouse and customer relationship management (CRM) platform. We are now leveraging these tools to deepen analytical capabilities for load forecasting, customer support, and deepening programmatic success.
• During the September heat wave and Flex Alerts, we engaged over 420,000 residents and businesses to encourage load reductions through MCE programs and behavior changes, helping eliminate the need for rolling outages. This includes direct emails, social media, and phone calls.

Financial Savings

• We issued one of the first-ever climate-friendly prepayment bonds for clean energy resources, helping reduce our energy costs by 10%, or $3 million a year for the next 10 years.
• Our MCE Cares Credit program provided cost relief to over 30,000 customers, providing over $5 million in bill credits to income-qualified residents and small businesses.
• Since MCE’s launch, we have saved customers $31.5 million and expect that number to reach $90 million by the end of 2022.
• MCE continues to carry two investment-grade credit ratings including an A rating from S&P.
• MCE has earmark requests recommended at the national level to enhance our electric vehicle and resiliency efforts with an additional $6 million.

Energy Storage

• MCE allocated $12.2 million to our energy storage efforts, and secured more than $350,000 in funding for our customers through the State Self Generation Incentive Program.
• We are helping Pittsburg Unified School District install 1.6 MW of storage across 10 of 13 school sites with over $715,000 in rebates from MCE. The school district will be using the savings, anticipated to be $2.8M over 7 years, from this project to fund other energy efficiency and clean technology improvements to benefit the 11,000 students in the district.
• MCE also supported 10 kW of battery storage at the West Marin Medical Center, a critical facility located in Point Reyes.
• We completed our second battery give-away program to medically vulnerable customers, ensuring that they can access clean power during an outage. MCE has now offered 200 portable batteries to make these customers more resilient and reduce pollution from diesel back-up generation.

Energy Efficiency

• We launched our Residential Efficiency Market, an expansion of MCE’s Marketplace programs, which include the Commercial Efficiency Market and the Peak FLEXmarket. Together, these programs help MCE shape load, to help reduce grid strain, and increase customer savings. By installing energy efficiency upgrades and clean energy technologies like LED lighting, more efficient heating and cooling systems, managed EV charging, solar plus storage, and other electrification measures, we are building a more resilient grid that is more responsive to our needs.
• MCE’s $188 million energy efficiency business plan was submitted to the CPUC with new residential equity offerings in defined environmental justice communities. This plan builds on the almost 150% year-over-year increase in our energy efficiency programs.
• MCE’s Healthy Homes programs will receive $3 million over the next five years as part of Richmond Rising, a comprehensive Transformational Climate Communities proposal, to help provide energy efficiency and health and safety upgrades to homes in Richmond.

Transportation Electrification

• We expanded the MCE Sync app beyond the pilot program, helping customers align EV charging with home rooftop solar generation and grid solar availability, providing grid-reliability incentive payments worth up to $10 per month, and increasing customer education about smarter charging strategies.
• Our transportation electrification outcomes include installation of over 1,400 Level 2 charging stations around our service area.
• MCE is partnering with the Contra Costa Transportation Authority (CCTA) to deliver the Charge Up Contra Costa Program which is funded by a $3.5 million California Energy Commission grant and $840,000 in match funding from MCE and CCTA. This program will reduce more than 50,000 tons of greenhouse gas emissions through clean transportation solutions.
• We also received an additional $180,000 grant from the Marin Community Foundation to fund EV charging in affordable multifamily properties in Marin.

Projects

• As MCE continues to plan for increased electrical load, we are investing in battery storage both locally and on a utility-scale. These projects allow us to store solar energy produced during the day for use during peak hours of 4 - 9 p.m. and increase access to renewable energy while improving grid reliability. Projects such as MCE’s Daggett, Golden Fields, Humidor, and Ranch Sereno will collectively supply over 325 MW of utility scale solar plus storage, enough to power approximately 133,000 homes.
• We announced our first Virtual Power Plant project in Richmond which is funded by a grant from the California Energy Commission and will help low-income residents access clean energy technologies. The project will upgrade up to 100 homes and 20 businesses with new energy efficient and electrification technologies, including completely refurbishing 10 previously abandoned homes. The first of these homes was completed in October.
• MCE signed a contract for our largest solar+storage project yet, the Golden Fields Solar project in Kern County in southern California. This 100 MW solar and 75 MW lithium-ion battery project will provide enough power for 52,000 homes each year.
• We signed our first contract for local battery storage at Ranch Sereno in Byron, unincorporated Contra Costa County, in late February. The project is part of our FIT Plus program and includes 2 megawatts of solar and an 800-kilowatt battery. Like MCE’s other FIT Plus projects, this will be constructed with union labor, prevailing wage, and pollinator-friendly requirements.
• MCE also contracted for over 175 megawatts of new battery storage resources outside of our service area, helping improve grid reliability across the state and decreasing the need for fossil fueled generation.
• MCE just signed a contract for 7 megawatts of new geothermal energy, just 100 miles north of our service area, bringing 24/7 clean energy to our customers.

Awards

• MCE won the 2022 Spare the Air Leadership Award for our Low-income Families and Tenants (LIFT) Program
• MCE received the East Bay Innovation Award in the Clean Tech category for our work in Contra Costa County, and we were the only awardee from Contra Costa County this year.

As of 2022, MCE’s cumulative accomplishments over 12 years include:

• 700,000 metric tons of CO2 reduced;
• More than 10,000 metric tons of CO2e reduced through MCE’s energy efficiency programs
• $2.4 billion invested in new California renewables;
• 914 MW of new renewables built to serve MCE load, including 48 megawatts of new local projects;
• More than 2 million labor hours supported; and
• Serving 580,000 accounts including 1.5 million residents and businesses.

Future Challenges

The last 12 months have marked continued shifts in California away from fossil-based electricity use, growth in the CCA industry, steep power supply cost increases and new challenges regarding procurement mandates and grid stability. While there is steady growth in the electric vehicle industry, supply chain issues have impacted availability of key materials for resources, and this has impacted some of MCE’s procurement and development timelines. The growth in the CCA sector has been paired with increasing “scope creep” as the California Public Utilities Commission, and other regulatory bodies, contemplate and implement new requirements for load-serving entities, particularly regarding procurement of supply.

Price increases have been unprecedented in the energy sector, impacting MCE’s ability to accumulate planned reserves. The State’s movement away from gas-fired generation resources has added to shortages in the market for resource adequacy resources, and while it is good to see the reduction in gas-fired resources, the transition has exacerbated the high cost of supply. There have been increasing mandates from the CPUC regarding what, when, and how much energy we procure, and the CPUC is contemplating further oversight over CCAs through the Integrated Resource Plan filings. Procurement mandates have been issued with a very short timeframe for purchases and this has created a “seller’s market” environment, where prices have increased even beyond the already high market level.

There is also some new oversight being contemplated by the California Energy Commission regarding “real-time” rates, and there is discussion underway in the legislative arena and in the Governor’s office indicating a likelihood of more procurement mandates, and potentially more purchasing power being given to a “central procurement entity” in the state, removing some of MCE’s control over what we procure for our portfolio. These issues heighten the need for close engagement with our legislative contacts and continued relationship-building with regulators.

Another current issue involves recent regulatory changes that are pushing load serving entities in the direction of hourly accounting (instead of the current annual accounting) for renewable and carbon-free energy, and this is likely to have an impact on the composition of MCE’s renewable and low/no carbon product offerings for our customers. While buying renewable volumes on an annual basis was reasonable when the rest of the state was relying on majority non-renewable sources, the strong grid reliance on solar and other intermittent resources is now driving a different need for our portfolio. These challenges create an opportunity for MCE to explore new technologies that will meet real-time state needs in an innovative and cost- effective way, while in parallel spark a need for us to dialogue with CPUC staff about how to avoid unintended consequences from any new requirements.

MCE’s programs for customers have been extremely successful this term, and in some cases have been adopted by other load-serving entities. Our “Flex Market” programs represented a full departure from CPUC’s traditional prescriptive energy efficiency programs to unlock market innovation and were so successful that the CPUC responded by requiring all IOUs to adopt MCE’s model in 2022.

Also, there are quite a few opportunities emerging as funding has been allocated to climate improvements at the national level, through the Infrastructure, Investment and Jobs Act (IIJA), and the Inflation Reduction Act (IRA), and at the state level, through the Governor’s budget and a host of climate bills. The IRA gives MCE the opportunity to own power supply projects. And climate funds have been earmarked for green hydrogen, renewable energy infrastructure in disadvantaged communities, electric vehicles, and other initiatives that are closely aligned with MCE’s interests and areas of experience. We have secured funds to begin some of this aligned work, and we have plans underway to attract additional funds and deepen our impact.