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d; A I Il E V E F (, Y I I F F RIVERSIDE PUBLIC UTILITIES PUBLIC UTILITIES Board Memorandum BOARD OF PUBLIC UTILITIES DATE: SEPTEMBER 23, 2019 ITEM NO: 9 SUBJECT: CITY OF RIVERSIDE'S WITHDRAW AND USE OF THE PROJECT STABILIZATION FUND WITH SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY ISSUE: Receive an update on the City of Riverside's withdraw and use of the Project Stabilization Fund with the Southern California Public Power Authority. RECOMMENDATION: That the Board of Public Utilities receive an update on the City of Riverside's withdraw and use of the Project Stabilization Fund with the Southern California Public Power Authority. BACKGROUND: Southern California Public Power Authority (SCPPA) is a Joint Power Agency (JPA) formed in 1980 under the Joint Exercise of Power Act of the California Legislature. Under the JPA, SCPPA is governed by a Board of Directors consisting of one Director from each of the 12 member utilities. SCPPA was formed to jointly develop and implement generation and transmission projects. In the 1990s, SCPPA established power procurement procedures to reflect the restructuring of the electric industry, transitioning from building and owning generation and transmission infrastructure to contracting for resources delivered through the statewide grid. In this way, tools were created through SCPPA to procure energy resources — in particular renewable energy and energy efficiency resources — that were and continue to be increasingly mandated by the state. On May 16, 1996, the SCPPA Board of Directors (SCPPA Board) adopted Resolution 1996-7 to establish a Project Stabilization Fund (PSF) in response to California's changing energy market environment under deregulation. The PSF provided a means by which SCPPA member utilities could better position themselves to compete in an environment of increased competition. In accordance with the resolution, each member utility has a separate PSF account, contributions to the PSF are determined solely by the authorized representative of the respective utility, and funds in the PSF account are invested in investment securities according to Resolution 1996-7. Any interest earnings are credited to the member's account at the end of each month. Under this Resolution, withdrawals from the PSF account may be used to pay for member utility's monthly power costs, capital and operating expenses on projects, bond -related expenses, and to cure any deficiency in other funds for any SCPPA project the utility is a participant. Withdrawals could also be used to pay any costs incurred by SCPPA and payable by the utility to SCPPA that do not relate to any specific SCPPA project. In 2016, SCPPA members determined that the uncertainty risk associated with deregulation had been minimized reducing the need for the PSF for some Members. In acknowledgment of the reduced market risks faced by SCPPA projects, SCPPA members sought to expand the options for members to withdraw from the PSF. On August 18, 2016, the SCPPA Board adopted Resolution No. 2016-084, which among