HomeMy WebLinkAbout _ 4.5(a)--Authorize Submittal of Grant Application to the CEC for Grid Reliability DEBA GrantC IT Y OF
REMDINO�"
AN CITY OF REDDING
REPORT TO THE CITY COUNCIL
MEETING DATE:
February 20, 2024
FROM: Nick Zettel, Director of
ITEM NO.
4.5(a)
Redding Electric Utility
***APPROVED
BY***
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nzettel@cityofredding.org
btippin@cityofredding.org
SUBJECT: 4.5(a) --Authorize
Submittal of a
Grant Application to the California Energy
Commission for a Grid Reliability Distributed Energy Bulk Assets Grant
Recommendation
Authorize the City Manager, or designee, to submit a grant application for $25,000,000 to the
California Energy Commission's Bulk Grid Asset Enhancements for Grid Reliability Grant
(GFO-23-401) to replace the Redding Power Plant's Unit 4 steam turbine.
Fiscal Impact
There is no fiscal impact associated with submitting the grant application. Additionally, there is
no penalty for opting out of the grant program at a later date.
The projected cost for the steam turbine replacement project is $60 million. The Distributed
Energy Bulk Assets (DEBA) Program's Bulk Grid Asset Enhancements for Grid Reliability
Grant (Grant) would cover up to 70% of the project costs for zero -emission initiatives, with a cap
set at $25 million. Diverse funding mechanisms are being explored to cover the remaining $35
million required for match funding. These include the potential utilization of utility reserve
funds, the issuance of bonds, or securing a line of credit. Additionally, Redding Electric Utility is
actively pursuing federal tax credits and other incentives, which would further contribute to the
overall cost-effectiveness of the project.
Staff are completing portfolio modeling, and the project will only move forward if it provides a
net reduction in the Utility's long-term financial risk. This modeling will analyze the prospective
grant amount to determine the funding threshold that must be met for the project to be deemed
cost-effective.
Should the Utility be awarded the grant, staff will return to the City Council with complete
project details, including a cost -benefit analysis, financing plan, and resolutions for the Council's
consideration.
Report to Redding City Council February 15, 2024
Re: 4.5(a) --Authorize Submittal of Grant Application to the CEC for Grid Reliability DEBA
Grant Page 2
Alternative Action
The City Council may choose not to apply for the funds or provide alternative direction to staff.
Background/Analysis
California's power grid faces increasing challenges due to carbon emissions reduction mandates,
increased saturation of renewable intermittent resources such as solar and wind energy, and
growing customer demand from transportation and building electrification. To address the
shortages in firm dispatchable resources, the DEKA Program's Grant provides funding for the
purchase and installation of efficiency upgrades and capacity additions to existing bulk grid
power generators in California that will serve as emergency supply for the state's electrical grid
during extreme events.
REU owns and operates the Redding Power Plant (Plant), a locally -owned natural gas-fired
power plant with a total nameplate capacity of 183.1 megawatts (MW). The Plant is comprised
of.
• Three GE Frame 5 simple cycle combustion turbines (Units 1, 2, and 3) with a combined
nameplate capacity of 73.8 MW; and
• Two -on -one combined cycle power generating units (Unit 5 and Unit 6) with two
Siemens SGT -800 gas turbines (with nameplate capacities of 42.5 MW and 40 MW,
respectively) coupled to a 26.8 MW nameplate capacity GE steam turbine (Unit 4).
The original heat recovery steam generators on Units 5 and 6 were deliberately undersized to
match the original cogeneration steam turbine already installed at the site. Unit 4 was not
upgraded when Unit 6 was installed, meaning additional heat could not be recovered and
converted to steam generation. The existing steam turbine operates in a two -on -one configuration
with two gas turbines at a total nameplate capacity of 109 megawatts.
REU staff reviewed the impacts of replacing the existing steam turbine at the Plant with a higher
capacity steam turbine and upgrading the associated heat recovery steam generators to higher
temperature and pressure. The proposed steam turbine replacement presents an opportunity to
augment the combined cycle capacity by an additional 21 MW.
Initial project analysis did not favorably position this as a cost-effective resource option based on
the cost considerations; however, recently, the California Energy Commission (CEC) initiated a
grant funding opportunity (GFO) specifically targeting the enhancement of existing power plant
efficiency in the state. The DEBA Grant provides REU an opportunity to receive funding for
capacity expansion and efficiency upgrades for Unit 4 to support bulk grid power generators in
California. The Grant is expected to cover $25 million of the projected $60 million project cost,
thereby making it a cost-effective endeavor. The Grant requires the additional capacity be made
available to support the California power grid during energy emergencies. REU would satisfy
this requirement by continuing to offer the Redding Power Plant generators to the Energy
Imbalance Market, which allows all of its generators to support the grid during energy
emergencies.
Report to Redding City Council February 15, 2024
Re: 4.5(a) --Authorize Submittal of Grant Application to the CEC for Grid Reliability DEBA
Grant Page 3
In response to the GFO, REU has developed a grant application for the construction of a steam
turbine replacement project that would provide numerous qualitative and quantitative
advantages, including:
• Achieving significant efficiency gains by lowering the plant heat rate by 1.5%;
• Boosting power generation capacity without increasing fuel consumption levels;
• Shielding REU customers from increased variability in power supply expenses due to
reduced hydropower availability, particularly during droughts; and
• Addressing uncertainties related to market fluctuations, climate shifts, and electrification,
thereby providing a strategic hedge against future energy demand forecasting challenges.
REU carefully considers cost-effectiveness and affordability when making decisions that impact
the utility. Leveraging grant funding from the State to support this project would allow
customers to realize the full benefits of the Redding Power Plant without sacrificing clean energy
goals. This strategy ensures that sustainability targets are upheld without burdening customers
with the responsibility of shouldering the entire project cost. Furthermore, REU's 2024
Integrated Resource Plan commits to a Net -Zero Carbon by 2045 plan, with the Plant projected
to operate through that timeline. Replacing the zero -carbon steam turbine will increase the
efficiency of the entire power plant, promoting the sustainable delivery of reliable and affordable
power.
Environmental Review
This is not a project defined under the California Environmental Quality Act; however, the CEC
may require additional evaluation of the project's environmental impacts. At this time, no further
action is required.
Council Priority/City Manager Goals
• Government of the 211t Century — `Be relevant and proactive to the opportunities and
challenges of today's residents and workforce. Anticipate the future to make better
decisions today."
Attachments
Distributed Electricity Backup Assets (DEBA) Program Guidelines
DOCKETED
Docket Number:
22 -RENEW -01
Project Title:
Reliability Reserve Incentive Programs
TN M
252687
Document Title:
Distributed Electricity Backup Assets (DEBA) Program
Guidelines, First Edition
Description:
DEBA Program Guidelines, First Edition
Filer:
O'Shea Bennett
Organization:
California Energy Commission
Submitter Role:
Commission Staff
Submission Date:
10/23/2023 3:51:36 PM
Docketed Date:
10/23/2023
CALIFORNIA
% R. COMMISSION
California Energy Commission
C: A C i F n R N 1. A
NATURAL
RESOURCES
A G E G Y
Distributed Electricity Backup
Assets (DEBA) Program
Guidelines, First Edition
(Assembly B"111 205.r 2022)
October 2023 1 CEC-300-2023-005-CMF
Hudson Spivey
Ashley Emery
Erik Lyon
O'Shea Bennett
Pamela Doughman
Primary Authors
Hudson Spivey
Project Manager
Ashley Emery
Branch Manager
Deana Carrillo
Director
RELIABILITY, RENEWABLE ENERGY, AND DECARBONIZATION INCENTIVES
DIVISION
Drew Bohan
Executive Director
DISCLAIMER
These proposed guidelines were approved by the California Energy
Commission (CEC or Energy Commission) on October 18, 2023. The
requirements in these guidelines are based on applicable law,
including Public Resources Code Sections 25791 and 25791.5, as
well as staff analysis and public input.
Created by Assembly Bill (AB) 205 (Ting, Chapter 61, Statutes of 2022) as part of the Strategic
Reliability Reserve, the Distributed Electricity Backup Assets (DEBA) Program offers incentives
for building cleaner and more efficient distributed energy assets. These distributed energy
assets will serve as on-call emergency supply or load reduction for the state's electrical grid
during extreme events. These program guidelines for the DEBA Program establish the rules for
the program, including eligibility requirements, participation process, and incentive structure.
Keywords: AB 205, DEBA, distributed resource, bulk grid assets, extreme event, demand
response, backup generation, load reduction, Strategic Reliability Reserve
Please use the following citation for this report:
Spivey, Hudson, Ashley Emery, Erik Lyon, O'Shea Bennett, and Pamela Doughman. October
2023. Distributed Electricity Backup Assets Program Guidelines, First Edition. California
Energy Commission. Publication Number: CEC-300-2023-005-CMF.
4
Abstract......................................................................................................................... i
Tableof Contents...........................................................................................................
ii
Listof Tables................................................................................................................
iii
CHAPTER 1: Program Overview.......................................................................................
1
A. Summary of Key Program Design Elements.............................................................1
B. Background.........................................................................................................1
C. Program Budget...................................................................................................1
CHAPTER 2: Program Design..........................................................................................
3
A. Project Selection Requirements..............................................................................3
1. Eligibility Requirements........................................................................................
3
2. Funding.............................................................................................................
4
3. Key Funding Deadlines........................................................................................
5
4. Solicitation Process..............................................................................................
5
B. Project Evaluation and Administrative Screening......................................................6
C. Project Implementation Requirements....................................................................9
D. Project Performance and Reporting Requirements..................................................10
E. Disbursement of Awarded Grant Funds.................................................................10
CHAPTER 3: Administrative Requirements.......................................................................11
A. DEBA Guideline Authority....................................................................................11
B. Effective Date of the DEBA Program Guidelines.....................................................11
C. California Environmental Quality Act.....................................................................11
D. Prevailing Wage.................................................................................................12
E. Authorized Third Parties......................................................................................12
F. Audits and Access to Facilities.............................................................................12
G. Record Retention...............................................................................................12
H. Use and Disclosure of Information and Records and Confidentiality ..........................13
I. Enforcement......................................................................................................13
J. Severability.......................................................................................................14
K. Waiver..............................................................................................................14
Reference Documents...................................................................................................15
Glossary......................................................................................................................16
KeyWords and Terms................................................................................................16
03
Table 1: DEBA Program Budget Allocation........................................................................ 2
Table 2: Anticipated DEBA Funding Allocation................................................................... 4
Table 3: Screening Criteria.............................................................................................. 6
Table 4: Example Technical Scoring Criteria for Bulk Grid Assets ......................................... 7
Table 5: Example Technical Scoring Criteria for Distributed Resources ................................. 8
P •
gram Overview
A. Summary of Key Program Design Elements
Created by Assembly Bill (AB) 205 (Ting, Chapter 61, Statutes of 2022) as part of the
Strategic Reliability Reserve, the Distributed Electricity Backup Assets (DEBA) Program
provides incentives for constructing cleaner and more efficient distributed energy assets.
These distributed energy assets will serve as on-call emergency supply or load reduction
for the state's electrical grid during extreme events (as defined in Public Resources Code
[PRC] Section 25790.5[b]). Eligible projects include (1) efficiency upgrades, maintenance,
and capacity additions to existing power generators and (2) new zero- or low -emission
technologies at existing or new facilities. Initial funding for the DEBA Program will be
awarded through one or more grant funding opportunity (GFO) solicitation processes.
DEBA solicitations will be designed to attract clean resources into the Strategic Reliability
Reserve while not inadvertently discouraging clean resources from participating in the
state's Resource Adequacy program.
B. Background
AB 205 created the Strategic Reliability Reserve to support the state's electric grid
reliability during extreme events. PRC Section 25790(c) states, 'AAs California transitions
to a clean energy future and contends with climate impacts and other challenges,
sufficient capacity of new and existing generation assets will be required to maintain
reliability during extreme events."
AB 205 requires the CEC to implement and administer the DEBA Program, codified in PRC
Sections 25791 and 25791.5. The DEBA Program will provide incentives for constructing
cleaner and more efficient distributed energy assets and efficiency upgrades,
maintenance, and capacity additions to existing power generators that will serve as on-
call emergency supply or load reduction for the state's electrical grid during extreme
events, such as heat waves.
PRC Section 25791(c) directs the CEC to develop guidelines for the DEBA Program. The
guidelines shall include a loading order that aims to achieve electricity reliability and
prioritizes feasible, cost-effective demand response and efficiency resources; then
feasible, cost-effective renewable and zero -emission resources; and then feasible, cost-
effective conventional resources. The guidelines shall also consider the anticipated useful
life of the resources in relation to the state's climate and air quality requirements.
C. Program Budget
DEBA Program funding is authorized under Assembly Bill 180 (Ting, Chapter 44, Statutes
of 2022) and Assembly Bill 102 (Ting, Chapter 38, Statutes of 2023) with a program
budget of $595 million. About $545,000,000 was authorized in Fiscal Year 2021-2022
and the remainder in future years.
Table 1: DEBA Proqram Budqet Allocation
Fiscal Year
2021-22
2022-23
2023-24
2024-25
2025-26
Program Funding
in Millions
$545
--
--
$25
$25
Source: California Energy Commission
I
CHAPTER 2:
Program i
A. Project Selection Requirements
1. Eligibility Requirements
a. Eligible Applicants
The DEBA Program is available to all public and private entities. Applicants must
intend to own or operate the eligible project.
b. Eligible Projects
The DEBA Program seeks to offer incentives for the construction of cleaner and
more efficient distributed energy assets and efficiency upgrades, maintenance, and
capacity additions to existing power generators that will serve as on-call
emergency supply or load reduction for the state's electrical grid during extreme
events.
Eligible projects must be located in California and provide expected electricity
supply or load reduction that will be available to California during extreme events.
The enabling statute of the DEBA Program authorizes funding for two categories of
projects: (1) efficiency upgrades, maintenance, and capacity additions to existing
power generators and (2) new zero- or low -emission technologies, including, but
not limited to, fuel cells or energy storage, at existing or new facilities.
Eligible projects under each project funding category are outlined below:
• Category 1: Bulk Grid Assets: Efficiency upgrades, maintenance, and
capacity additions to existing power generators.
Eligible bulk grid projects must increase the nameplate capacity of an existing
power generator or the power output of an existing facility that is
interconnected in California to the bulk transmission grid. Examples of eligible
projects in this category include:
o Efficiency upgrades at existing power generators.
o Clean back-up generation or storage sited at existing power generators.
o Waste heat to power integrated with existing power generators.
• Category 2: Distributed Resources: New zero- or low -emission
technologies, including, but not limited to, fuel cells or energy storage, at
existing or new facilities in California with the first point of interconnection that
is not on the bulk transmission grid. Projects in this category may be located
either behind the meter or in front of the meter.'
Examples of eligible projects in this category include:
o Load flexibility controls, supervisory control and data acquisition (SCADA)
systems, demand -response aggregation software.
o Fuel cells.
o Energy storage.
o Linear generators.
o Microgrids.
o Microturbines.
o Vehicle -to -grid integration.
o Battery -backed electric vehicle charging.
o Pumped hydroelectric storage.
o Combined heat and power systems.
c. Ineligible Projects
The following projects are ineligible to receive funding from the DEBA Program:
• New diesel backup generators regardless of fuel (diesel, biodiesel, or
renewable diesel or a combination)
• Variable renewable resources, such as solar photovoltaics or wind turbines,
without paired energy storage devices
2. Funding
The DEBA Program funding may be awarded through one or more GFO solicitation
processes, subject to budget availability, as described in these Guidelines. The DEBA
Program may release several GFO solicitations, depending on identified electrical grid
reliability needs in the state, project opportunities, and available funding. The CEC
may also choose to allocate funding through other state administrative processes after
the initial phase.
Table 2: Anticinated DEBA Fundino Allocation
Funding Category
Funding Allocation
Bulk Grid Assets
Up to $100 million
Distributed Resources2
Up to $445 million
Source: California Energy Commission
1 This includes microgrids that can provide grid services at the transmission level.
2 This includes CEC administrative costs and funding to be used in the Climate Heat Impact Response Program as
required by Public Resources Code section 25791.5.
4
At least 25 percent of the funding shall be awarded to projects located in local publicly
owned electric utility service territory Additionally, the DEBA Program will seek to
award at least 50 percent of distributed resource project funding to projects located in
or benefiting disadvantaged communities. DEBA funding may also be directed to
leverage federal funding opportunities.
If all funding originally allocated to a particular funding category or funding round is
not disbursed at the conclusion of that funding round, undisbursed funds may be
reallocated to a future funding round. This reallocation will vary depending on existing
and projected applicant demand and the state's grid reliability needs. The CEC may
conduct additional funding cycles if funds are available or additional funds are
allocated to the program.
3. Key Funding Deadlines
All funds appropriated to the DEBA Program in the FY 21-22 budget cycle must be
encumbered (committed) in grant awards no later than June 30, 2026. Grant funds
must be liquidated (spent by the grant recipient and reimbursed by the CEC) no later
than June 30, 2030.
If additional funds are allocated to the DEBA Program in the future, funding
encumbrance and liquidation requirements will be delineated in future GFOs or
guidelines or both.
4. Solicitation Process
A GFO solicitation will be posted on the CEC website at
http://www.energy.ca.gov/contracts/.
Information necessary to submit an application shall be provided in the GFO
solicitation and shall be consistent with these guidelines. The GFO solicitation shall
include solicitation objectives, eligibility requirements, schedule, scoring criteria,
application forms, and other required templates, along with the terms and conditions
included in agreements for all awarded projects.
CEC staff shall hold a preapplication workshop reviewing the GFO solicitation process
with potential applicants. Workshop attendance may be in person or via remote
access. Participation is optional but strongly encouraged. The workshop shall provide
an opportunity for potential applicants to ask questions on the solicitation and the
application process. Following the workshop, CEC staff shall provide an opportunity
for interested parties to submit written questions about the solicitation. A response to
all questions shall be posted on the CEC website as indicated in the solicitation. Any
revisions, corrections, and clarifications on the solicitation shall also be posted on the
CEC website and announced through the appropriate email subscription topics.
All applications shall be scored according to a set of selection criteria. When scoring
for the solicitations is complete a notice of proposed award (NOPA) shall be released
providing the rank of each applicant based on overall score. The GFO solicitation will
specify if the funding will be awarded competitively or based on passing scores.
After the NOPA is released, all applicants shall be notified of the results, and a CEC
representative shall begin working with each awardee to develop an agreement for
the awarded project. Once the agreements are finalized, they shall be presented and
approved at an Energy Commission business meeting. After approval at an Energy
Commission business meeting, the grant agreement shall be signed by all parties.
B. Project Evaluation and Administrative Screening
Applications shall be evaluated and scored based on responses to the information
requested in the solicitation. To evaluate applications, the CEC shall organize an
evaluation committee consisting of CEC staff possessing applicable energy operations or
electrical grid reliability expertise or both. Proposals shall be evaluated in two stages:
application screening and technical scoring.
Application screening is a series of pass/fail administrative requirements as described in
Table 3 below. All applications not passing all the administrative screening requirements
are disqualified and shall not move on to the scoring stage. The following screening
criteria shall be used for all funding categories in the DEBA Program:
Source: California Energy Commission
Proposals passing the application screening process are then scored by an evaluation
committee. The technical scoring criteria will be tailored with each GFO solicitation based
on program funding targets and the state's grid reliability needs.
The following are examples of the technical scoring criteria that may be used for DEBA
Program GFO solicitations for bulk grid assets:
rable 4: Example Tecnnicai scorinq criteria for Bulk Grid Assets
1. Applicant and Project Eligibility
a. Proposal demonstrates the applicant and project have met all eligibility
requirements as specified in the solicitation manual.
2. Resource Longevity
a. Proposal describes the anticipated useful life of the project in relation to the
state's climate and air quality requirements.
3. Capacity and Availability
a. Total amount of additional power (in MW and MWh) that the project would
provide to the state.
b. Maximum hours available for dispatch during peak load (between the hours of
4 p.m. to 10 p.m.).
c. Proposal describes a clear and reasonable measurement and verification plan
that describes how performance during an emergency electrical grid event,
including additional power generated, will be metered, documented, and
reported to the CEC for verification.
4. Cost
a. Cost-effectiveness of dollar value of DEBA funding per MW of additional power.
b. Proposal provides a detailed budget proposal, including the dollar value of
DEBA funding per MW of additional power.
S. Readiness:
a. Estimated project completion date in relation to immediate electrical grid needs
and program funding timelines.
b. Proposal provides justifiable and reasonable estimation of the project
completion date and when the resource will be fully operational.
c. Proposal describes a reasonable approach to performing the work with a clear
description of all project task and subtasks, with identified outcomes and
deliverables.
d. Proposal identifies and discusses factors critical for success, such as risks,
barriers, environmental permitting and California Environmental Quality Act
(CEQA), utility or balancing authority interconnection studies and/or approval,
supply chain issues, schedules for operations, climate or weather
considerations, and other limitations, and how these will be addressed to
successfully complete the project within the grant term.
Source: California Energy Commission
The following are examples of the technical scoring criteria that may be used for DEBA
Program GFO solicitations for distributed resources:
Table 5: Example Technical Scoring Criteria for Distributed Resources
1. Applicant and Project Eligibility
a. Proposal demonstrates the applicant and project have met all eligibility
requirements as specified in the solicitation manual.
2. Loading Order
a. Project is higher in the loading order identified in Assembly Bill 205 (Ting,
Chapter 61, Statutes of 2022), which prioritizes feasible, cost-effective demand
response and efficiency resources, then feasible, cost-effective renewable and
zero -emission resources, and then feasible, cost-effective conventional
resources.
3. Resource Longevity
a. Proposal describes the anticipated useful life of the project in relation to the
state's climate and air quality requirements.
4. Capacity and Availability
a. Total amount of load reduction or additional power or both (in MW and MWh)
that the project would provide to the state.
b. Maximum hours available for dispatch during peak load (between the hours of
4 p.m. to 10 p.m.).
c. Proposal provides a clear and reasonable measurement and verification plan
that describes how performance during an emergency electrical grid event,
such as total amount of load reduction or additional power generated, will be
metered, documented, and reported to the CEC for verification.
S. Cost
a. Cost-effectiveness of dollar value of DEBA funding per MW of additional power.
b. Project is supported by federal funding.
c. Proposal provides a detailed budget proposal, including the dollar value of
DEBA funding per MW of additional power.
6. Readiness:
a. Estimated project completion date in relation to immediate electrical grid needs
and program funding timelines.
b. Proposal provides justifiable and reasonable estimation of the project
completion date and when the resource will be fully operational.
c. Proposal describes the approach to performing the work with a clear
description of all project task and subtasks, with identified outcomes and
deliverables.
d. Proposal identifies and discusses factors critical for success, such as risks,
barriers, environmental permitting and CEQA, utility, or balancing authority
interconnection studies or approval or both, supply chain issues, schedules for
operations, climate or weather considerations, and other limitations, and how
these will be addressed to successfully complete the project within the grant
term.
7. Equity
a. Project is located in or benefiting a disadvantaged community.
b. Project replaces or displaces fossil fueled generation.
8. Resiliency Cobenefits
a. Proposal describes how the project offers benefits beyond statewide grid
reliability, such as offering resilience to critical infrastructure, including, but not
limited to, emergency services, healthcare facilities, potable water, and
wastewater treatment.
9. Resource Portfolio Diversity
a. Project enhances the overall diversity of the portfolio of projects participating
in the state's Strategic Reliability Reserve.
Source: California Energy Commission
Upon notification of the grant award, a grant agreement is developed establishing a
business relationship between the CEC and the recipient of the DEBA award. The grant
agreement includes a scope of work, project budget, project schedule, and general terms
and conditions. A commission agreement manager (CAM) shall be assigned to the project
and be responsible for coordinating with funding recipients to guide agreement
development, provide project oversight, and serve as the CEC's point of contact for
stakeholders interested in receiving more information about the project.
All recipients shall be required to:
• Participate in a kickoff meeting to establish deliverable expectations, roles and
responsibilities, accounting procedures, and reporting requirements.
• Submit periodic progress reports to ensure the recipient is complying with the task
schedule specified in the grant agreement.
• Provide required deliverables as specified in the scope of work.
Some DEBA projects may include one or more critical project review meetings at a
predesignated milestone(s) in which the CAM shall review the progress to date and
determine whether the progress to date justifies proceeding to the next phase of the
project or making necessary corrections to ensure project success. For all projects, CAMs
may call a critical project review at any time during the project if the CAM believes there
is a significant issue with the progress or administration of the project that needs to be
discussed and could result in a change to the project or termination.
Periodic project progress reports are required describing project progress to date. These
reports are generally required quarterly. The CEC CAM shall identify the necessary
reporting frequency. A final report, which will document total performance for the
project, shall be due before the agreement end date.
D. Project Performance and Reporting Requirements
All incentivized equipment and projects will be required to participate as an on-call
emergency electrical grid resource for the state during extreme events as required in
Public Resources Code Section 25791(f). Specific performance and reporting
requirements, including reports on performance during extreme events, depend on the
projects or technology types selected and will be tailored with each GFO solicitation. CEC
may also require reporting and data to inform program evaluations.
Public Resources Code Section 25791(e) requires funding recipients for bulk grid assets
to comply with regulations adopted following Part 2 (commencing with Section 3850) of,
and Part 5 (commencing with Section 35870) of, the California Global Warming Solutions
Act of 2006 (Division 25.5 [commencing with Section 38500] of the Health and Safety
Code), including, but not limited to, the mandatory reporting of emissions of greenhouse
gasses and compliance market-based mechanism.
E. Disbursement of Awarded Grant Funds
Awarded grant funds typically are disbursed in arrears upon the demonstration of project
completion by a grant recipient. In addition, the CEC anticipates that a portion of each
grant award for Distributed Resource projects will be disbursed over a set period of years
and released upon a grant recipient's demonstration that load reduction or emergency
supply was provided during extreme events within a given year, based on the specific on-
call emergency performance requirements detailed in the GFO solicitation. The
disbursement approach will be dependent on the projects or technology types selected
and will be tailored with each GFO solicitation.
E
CHAPTER 3:
Administrative Requirements
A. DEBA Guideline Authority
These program guidelines are adopted under Public Resources Code (PRC) Section
25791(c), which directs the CEC to develop guidelines to implement the DEBA Program.
Under AB 180, Section 18(3)(a) and Section 19(2)(a), the Administrative Procedure Act
(Chapter 3.5 [commencing with Section 11340] of Part 1 of Division 3 of Title 2 of the
Government Code) does not apply to the adoption these guidelines.
B. Effective Date of the DEBA Program Guidelines
The DEBA Program Guidelines will take effect only after they have been approved at a
CEC business meeting. Once finalized, the CEC will post the adopted DEBA Program
Guidelines on the2DJE;��BAPProgram website, available at
https://www.energy.ca.gov/programs-and-topics/programs/distributed-electricity-backup-
assets-program.
Applicants and interested persons may also obtain the program guidelines by contacting
DEBA@energy.ca.gov.
C. California Environmental Quality Act
In general, the CEC must comply with California Environmental Quality Act (CEQA) , 3
which requires public agencies to identify and consider potential environmental impacts of
proposed projects when the CEC supports proposed projects with grants or other
subsidies.4
The CEC has made an initial determination that the development of these guidelines is
not a project for purposes of CEQA. However, if the guidelines are a project, the CEC has
made an initial finding that they are exempt from CEQA under California Code of
Regulations, Title 14, Sections 15307 and 15308. These provisions exempt actions taken
by a regulatory agency pursuant to state law to "assure the maintenance, restoration, or
enhancement of a natural resource" and actions taken to "assure the maintenance,
restoration, enhancement, or protection of the environment" where the action involves
procedures for protection of the environment. The CEC has also made an initial
determination that the guidelines are exempt from CEQA under the common-sense
exemption, California Code of Regulations, Title 14, Section 15061(b)(3), because there is
no possibility that the guidelines may have a significant effect on the environment, as
defined by CEQA.
3 Public Resources Code Section 21000 et seq.; see also California Code of Regulations, Title 14, Section 15000
et seq.
4 Public Resources Code Section 21065(b).
•
Projects receiving an award of public funds from the CEC often involve construction,
alteration, demolition, installation, repair, or maintenance work more than $1,000. For
this reason, projects receiving an award of public funds from the CEC are likely to be
considered public works under the California Labor Code. See Chapter 1 of Part 7 of
Division 2 of the California Labor Code, commencing with Section 1720 and Title 8,
California Code of Regulations, Chapter 8, Subchapter 3, commencing with Section
16000. Public works projects require the payment of prevailing wages. Prevailing wage
rates can be significantly higher than non -prevailing wage rates. If the recipient does not
believe the project is a public works project, the recipient is responsible for obtaining a
legally binding determination from the Department of Industrial Relations or a court of
competent jurisdiction before work begins on the project that the proposed project is not
a public work. The recipient is fully responsible for complying with all California public
works requirements, including, but not limited to, payment of prevailing wage.
If outside contractor labor is used, the contractor shall be paid at the prevailing wage for
their particular trade as established by the California Department of Industrial Relations.
Projects must comply with any applicable laws pertaining to prevailing wage and labor
compliance.
E. Authorized Third Parties
Authorized third parties may complete applications on behalf of an eligible DEBA Program
participant but may not sign attestations on their behalf. A signed letter of authorization
from the DEBA Program participant specifying any authority or responsibility delegated to
the third party is required as part of the application package.
F. Audits and Access to Facilities
Upon written request from the CEC, applicants and recipients must:
• Provide all project documents, including detailed documentation of all planned and
paid expenses.
• Allow the CEC or its designee access to project facilities and records.
• Allow the CEC or its designee to collect project -related data, including the data
required to measure and verify generation or load reduction data or both.
Further, if requested, the applicant or recipient must provide the CEC or its designee
associated data from a period before the start of the project as necessary to establish
baseline data, such as energy usage. Audits or program reviews may occur at any time
during program implementation or after projects are completed.
G. Record Retention
Recipients must retain all project records (including financial records, progress reports,
payment requests, electricity generation or load reduction data or both, and fuel use
documentation) for a minimum of three years from the date of the final payment.
Recipients must include the above audit, record retention, and access rights in any
subcontract or subgrant.
1
H. Use and Disclosure of Information and Records and
Confidentiality
With very few exceptions, all project documents submitted to the CEC or its technical
consultant(s), including as part of any audit, are considered public records subject to
disclosure under the California Public Records Act. The CEC or other state agencies may
also use any of these documents or information for any purpose, including to determine
eligibility and compliance with the DEBA Program, applicable law, or a particular
solicitation or guideline document; evaluate related or relevant programs or program
elements; or prepare reports. These documents and information include, but are not
limited to, applications for funding, the agreement itself, invoices and any documentation
submitted in support of applications, all agreement deliverables, final project report, and
documents prepared for other reporting requirements, materials and documents
developed as part of technology transfer activities.
If the CEC requires an applicant or recipient to provide copies of records that the
recipient believes contain confidential/proprietary information entitled to protection under
the California Public Records Act or other law, the recipient may request that such
records be designated confidential according to the CEC's regulations for confidential
designation, Title 20, California Code of Regulations, Section 2505.
Applicants considering confidentiality should note that DEBA Program funds are subject to
information disclosure requirements to ensure transparency. Information concerning the
identity of recipients and the grant amount is public information and will be disclosed
according to the California Public Records Act. This information, as well as other public
information, may also be disclosed through the CEC's website, another State of California
agency website, or through other means.
The CEC can disclose confidential information and records to other governmental entities
and policing authorities for civil and criminal investigation and enforcement.
I. Enforcement
In addition to any other rights the CEC has, the CEC can take any of the following actions
necessary to enforce the CEC's rights and program requirements.
1. Recovery of Overpayment
The CEC may direct its chief counsel to commence formal legal action against any
applicant, former applicant, or recipient to recover any portion of a payment under a
grant agreement that the executive director determines the applicant, former
applicant, or recipient was not otherwise entitled to receive, retain (that is, advanced
funds), or spend in the manner it was spent.
2. Fraud and Misrepresentation
The executive director may initiate an investigation of any applicant that the executive
director has reason to believe may have misstated, falsified, or misrepresented
information in submitting an application, payment request, or any reporting or other
information required under the program. Based on the results of the investigation, the
executive director may take any action deemed appropriate, including, but not limited
to:
• Cancellation of the reservation of funds.
= Termination of the award or award agreement.
= Recovery of any overpayment.
= With the concurrence of the CEC, recommending the Attorney General initiate
an investigation and prosecution under Government Code Section 12650, et
seq., or other provisions of law.
3. Noncompliance With Agreement
The CEC may seek remedies for noncompliance with agreement terms, work scope,
and project milestones, including, but not limited to, stop work, termination,
withholding requested payments, recovery of funds, or any other administrative or
civil action.
�. Severability
If any provision of these guidelines is unenforceable or held to be unenforceable, all
other provisions of these guidelines will remain in full force and effect.
K. Waiver
No waiver of any breach of these guidelines constitutes waiver of any other breach. All
remedies in these guidelines will be taken and construed as cumulative, meaning in
addition to every other remedy provided in the guidelines or by law.
Assembly Bill 205 (Committee ee on bud et, Stats. 2022, Ch. 61)
https://leginfo.legislature.ca.gov/faces/biIITextClient.xhtmI?bill_id=202120220AB205
Word/Term
Definition
AB
Assembly Bill
CalEPA
California Environmental Protection Agency
CAM
Commission agreement manager
CARB
California Air Resources Board
CEC
State Energy Resources Conservation and Development Commission,
commonly called the California Energy Commission, the Energy
Commission, or the CEC
CEQA
The California Environmental Quality Act found in California Public
Resources Code Section 21000 et seq., and the CEQA Guidelines,
promulgated by the California Natural Resources Agency, California
Code of Regulations Title 14, Section 15000 et seq. CEQA generally
requires state and local government agencies to inform decision
makers and the public about the potential environmental impacts of
proposed projects, and to reduce those environmental impacts to the
extent feasible.
Disadvantaged
Disadvantaged communities are those designated under Health and
communities
Safety Code Section 39711 as representing the 25% highest scoring
census tracts in CalEnviroScreen 4.0, census tracts previously
identified in the top 25% in CalEnviroScreen 3.0, census tracts with
high amounts of pollution and low populations as identified by
CalEPA, and federally recognized tribal areas as identified by the
Census in the 2021 American Indian Areas Related National
Geodatabase. Please see https://calepa.ca.gov/envjustice/ghginvest/
for the most current CalEPA designations.
GFO
Grant funding opportunity
Grant recipient
Those that receive an award under the DEBA Program
Guidelines
Distributed Electricity Backup Assets Program Guidelines
Extreme event
An extreme event is defined in Public Resources Code Section
25790.5(b) to mean either of the following:
• An event occurring at a time and place in which weather, climate,
or environmental conditions, including temperature, precipitation,
drought, fire, or flooding, present a level of risk that would
constitute or exceed a one -in -ten event, as referred to by the
North American Electric Reliability Corporation, including when
forecast in advance by a load -serving entity or local publicly
owned electric utility.
An event where emergency measures are taken by a California
balancing authority, including when forecast in advance by the
California balancing authority.
Load reduction
A decrease in electric demand as measured at a customer site
relative to a counterfactual baseline. Load reductions include behind -
the -meter generation or storage discharge that result in negative
demand (that is, exports) except where otherwise prohibited.
NOPA
Notice of proposed award
Project
A technology or a portfolio of technologies installed to provide
emergency electricity supply or load reduction that is contained in a
grant application.
Local publicly
Local publicly owned electric utility means a municipality or municipal
owned electric
corporation operating as a "public utility" furnishing electric service as
utility (POU)
provided in Section 10001, a municipal utility district furnishing
electric service formed pursuant to Division 6 (commencing with
Section 11501), a public utility district furnishing electric services
formed under the Public Utility District Act set forth in Division 7
(commencing with Section 15501), an irrigation district furnishing
electric services formed pursuant to the Irrigation District Law set
forth in Division 11 (commencing with Section 20500) of the Water
Code, or a joint powers authority that includes one or more of these
agencies and that owns generation or transmission facilities, or
furnishes electric services over its own or its member's electric
distribution system. (Public Utility Code section 224.3.)
PUC
Public Utilities Code
Solicitation
The document that requests grant applications from interested
parties and includes all attachments, exhibits, any addendum and
written notices and questions and answers; may be used
interchangeably with grant funding opportunity.