Agenda packet — Ava Community Energy Executive Committee, June 4, 2025

Executive Committee Meeting
Wednesday, June 4, 2025
3:00 pm
In Person:

Conference Room 5
Ava Community Energy
1999 Harrison St., Suite 2300
Oakland, CA 94612
Or from the following locations:

Hayward City Hall, 777 B St, Hayward, CA 94541
City of Pleasanton – Council Office - 123 Main Street, Pleasanton, CA 94566 Via Zoom:
https://avaenergy-org.zoom.us/j/88267670367
Or join by phone:

Dial(for higher quality, dial a number based on your current location):

US: +1 669 900 6833 or +1 253 215 8782 or +1 346 248 7799 or +1 301 715 8592 or +1 312 626 6799 or 877 853 5257 (Toll Free) or 888 475 4499 (Toll Free) Webinar ID: 882 676 70367
Meetings are accessible to people with disabilities. Individuals who need special assistance or a disability-related modification or accommodation to participate in this meeting, or who have a disability and wish to request an alternative format for the meeting materials, should contact the Clerk of the Board at least 2 working days before the meeting at (510) 906- 0491 or [email protected].

If you have anything that you wish to be distributed to the Executive Committee, please email it to the clerk by 5:00 pm the day prior to the meeting.

1. Welcome & Roll Call

2. Public Comment
This item is reserved for persons wishing to address the Executive Committee on any Ava Community Energy-related matters that are not otherwise on this meeting agenda. Public comments on matters listed on the agenda shall be heard at the time the matter is called.

As with all public comment, members of the public who wish to address the Committee are customarily limited to three minutes per speaker and must complete an electronic speaker slip. The Executive Committee Chair may increase or decrease the time allotted to each Ava Community Energy
Executive Committee Page | 2
speaker.

3. Approval of Minutes from May 7, 2025

4. Draft Ava Budget for Fiscal Year 2025-2026 (Informational Item) Provide further information on the upcoming fiscal year budget

5. Prepay Follow Up (Informational Item)
Provide further information on prepay structure and risks

6. Committee Member and Staff Announcements including requests to place items on future Executive Committee Agendas

7. Adjourn
The next Executive Committee meeting will be held on Wednesday, July 2, 2025 at 3pm.

Draft Minutes
Executive Committee Meeting
Wednesday, May 7, 2025
3:00 pm
In Person:

Conference Room 5
Ava Community Energy
1999 Harrison St., Suite 2300
Oakland, CA 94612
Or from the following locations:

Hayward City Hall, 777 B St, Hayward, CA 94541
City of Pleasanton, City Council Office, 123 Main St., Pleasanton, CA 94566 Via Zoom:
https://avaenergy-org.zoom.us/j/88267670367
Or join by phone:

Dial(for higher quality, dial a number based on your current location):

If you have anything that you wish to be distributed to the Executive Committee, please email it to the clerk by 5:00 pm the day prior to the meeting.

1. Welcome & Roll Call

Present: Members: Members Marquez (Alameda County), Roche (Hayward), Balch (Pleasanton), Vice-Chair Gonzalez (San Leandro), and Chair Andersen (Piedmont) Not Present: Member Fugazi (Stockton)

2. Public Comment
This item is reserved for persons wishing to address the Executive Committee on any Ava Community Energy-related matters that are not otherwise on this meeting agenda. Public Ava Community Energy
Executive Committee Page | 2
comments on matters listed on the agenda shall be heard at the time the matter is called.

There were no speakers for public comment.

3. Closed Session Public Comment
There were no speakers for closed session public comment.

4. (4:59) Closed Session
PUBLIC EMPLOYEE PERFORMANCE EVALUATION under California Government Code Section 54957: Performance Evaluation of Chief Executive Officer Howard Chang

5. (48:32) Report Out of Closed Session
There were no items to report out of closed session.

6. Approval of Minutes from March 7, 2025
Member Gonzalez motioned to approve the minutes. Member Roche seconded the motion which was approved 4/0/1/0/1 (yes/no/abstain/recuse/not present) Yes: Members: Marquez, Roche, Vice-Chair Gonzalez and Chair Andersen No: none
Abstain: Member Balch
Recuse: none
Not Present: Member Fugazi

7. (50:34) 2025-26 Draft Budget Review (Informational Item) Review first draft of the fiscal year 2025-26 budget
Howard Chang presented Ava’s draft budget for fiscal year 2025–26, outlining two scenarios: an “upside” case under current PCIA rules and a “PCIA reform” scenario, which could reduce revenue due to anticipated regulatory changes. He explained how these scenarios would affect staffing levels, local development funding, and customer rate structures, and outlined potential tools to manage a budget shortfall.

Selected topics discussed by the Executive Committee
• Member Gonzalez asked for explanations of the $187 million impact and the $780 million scenario.
• Member Roche requested that staff provide a weighted recommendation on which budget adjustment strategies are most effective and least disruptive. (1:08:58) Public Comment – Jim Lutz asked if the contracts underlaying the PCIA calculations for PG&E stranded costs had been audited.

Ava Community Energy
Executive Committee Page | 3

8. (1:10:53) CMF Update (Informational Item)
Update on current status of the Critical Municipal Facilities Portfolio JP Ross gave an update on Ava’s Critical Municipal Facilities Program, explaining that the agency is now planning to own and operate the solar projects directly, instead of using a third-party power purchase model. He noted that the team is moving quickly to select a contractor due to an April 2026 deadline. JP also explained the financial risks involved, including possible cost increases and uncertainty around federal tax credits, and said staff are working to reduce those risks before bringing a final recommendation to the board.
(1:19:57) Public Comment – Kelly Furgusson of Engie spoke in support of Ava and stated that while Engie ultimately chose not to bid on the EPC Contractor RFP, they hope to work with Ava in the future.

9. San Joaquin County (SJC) 2026 Enrollment Update (Informational Item) Update regarding SJC enrollment timing and process
Alex DiGiorgio, Public Engagement Manager, provided an overview of Ava’s planned enrollment of unincorporated San Joaquin County for March 2026. A key issue involves the South San Joaquin Irrigation District, which is seeking to municipalize and serves a subset of overlapping customers in the unincorporated area. Due to potential legal and logistical conflicts, Alex recommended deferring service to these overlapping customers while Ava negotiates an agreement to avoid procurement risks and stranded costs. (1:28:51) Public Comment – Jim Lutz asked if and how Ava can support South San Joaquin Irrigation District’s municipalization process.

Selected topics discussed by the Executive Committee
• Member Balch recommended that staff seek guidance from the board with regards to Ava’s relationship to the South San Joachin Irrigation District’s municipalization process.

10.Committee Member and Staff Announcements including requests to place items on future Executive Committee Agendas
There were no Committee Member or Staff announcements.

11.Adjourned at 4:34pm.

The next Executive Committee meeting will be held on Wednesday, June 4, 2025 at 3pm.

Fiscal Year 2025-2026
Draft Budget
Executive Committee
Howard Chang | June 4, 2025
Introduction & Updates
2 • The CPUC issued a Proposed Decision (PD) on Friday 5.23.25 indicating PCIA reform in line with our modeled assumptions
▪ This decision will be voted out on 6.23.25 and Ava is preparing to file comments on it • PG&E's ERRA filing was made on 5.15.25 providing a preliminary indication of rates for 2026 ▪ This filing was made prior to PD and uses outdated Market Price Benchmarks (MPBs) from end of 2024 • The material changes in this budget presentation relative to the previous presentation are:
▪ Two budget scenarios, both incorporating the PCIA reform changes - variance reflects different market prices ▪ Reduced operating expenses due to lower procurement costs from implementing compliance period procurement methodology
▪ Both scenarios now reflect the same operating expenses Proposed Recommendation for Board Approval
3 • Approve the base case budget
▪ The base case scenario is our best estimate of market prices and reflects a more conservative scenario
▪ Implement the Compliance Period Procurement methodology • Detailed procedure and policy to be brought forward for review with board in July ▪ Utilize GASB62 Rate Stabilization Fund to offset any potential fiscal year deficit • Formal recommendation to allocate a portion of the fiscal year 2024-25 surplus (forecasted at >$110MM) to the Rate Stabilization Fund to be brought forward in July/Sept timeframe
PCIA Update
4 The CPUC's PCIA Process – Key Dates
PCIA Rulemaking
• Phase I RA MPB proposed decision – issued 5/23/25
• Phase I RA MPB final decision - 6/26/25
ERRA
• 2026 ERRA Forecast filing - filed 5/15/25
• 2026 ERRA Forecast "October update filing" - 10/15/25 • 2026 ERRA Forecast final decision - 12/18/25
• New rates go into effect - 1/1/26
5 The Energy Resource
Recovery Account (ERRA)
Forecast proceeding at the
CPUC results in PCIA and
PG&E generation rates for
the following year. In this
case, calendar year 2026.

CPUC Proposed Decision (PD)
• The PD essentially proposes to adopt what Ava modeled as the "PCIA Reform" scenario • Specifically, the PD:
o Includes the prior 4 years of available transactions for a given delivery year, instead of only more recent (prior 21 months) transactions
o Uses one value for all RA MPBs that include system, local, and flexible RA, instead of separate values for each type of RA
o Excludes affiliate, swap, and sleeve transactions from RA MPB calculations • The PD, if finalized, will:
o increase calendar 2026 PCIA rates for most Ava customers (depending on vintage) and o lower calendar 2026 PG&E bundled generation rates
• Ava and CalCCA will continue to engage in this proceeding and file comments to negotiate altering this implementation
6 Impact of PCIA Reform on Revenues
• In 2026, the impact of PCIA Reform for
2025 true-up is estimated to reduce
revenues by ~$187MM
▪ This reduction is based on retroactive
adjustments to the 2025 RA MPBs used in the
PCIA calculation
▪ Separate from PCIA reform, revenues are
expected to decrease due to true-up of other
market prices that are softening in 2025
• $79MM would be realized in January – June
2026, in this proposed budget
• The remaining $108MM would be realized
in July – December 2026, impacting fiscal
year 2026-2027
7 35,086,000
79,200,000
137,648,000
186,819,000
-
50,000,000
100,000,000
150,000,000
200,000,000
250,000,000
300,000,000
CY Q1 CY Q2 CY Q3 CY Q4
Comparative Revenue Performance & Impact of Reform for
Calendar Year 2026
No Reform PCIA Reform Difference Cumulative
Market Price Benchmark Trends 2023-2027
8 • In addition to changes in the PCIA methodology,
we forecast a softening of prices in 2025 and 2026,
though markets have seen historically high
volatility
• Note that Forecasted and Final MPBs vary
significantly, reflecting year to year market
volatility
RA Market Price Benchmark
Brown Power Market Price Benchmark
RPS Adder
2025-26 Draft Budget
9 Expected Market Environment & Impact to Rates/PCIA
• Rates have increased and PCIA has decreased since 2021, driven by historic increases in market energy prices • We are seeing some stabilization and softening in energy costs where forecasted market prices are likely to set PCIA higher and rates lower in 2026
• The PCIA methodology changes will further increase PCIA and decrease rates in calendar year 2026 • For this presentation, two budget scenarios are considered with varying market price assumptions ▪ Upside Budget: PCIA reform incorporated and assumes higher RPS MPBs as filed in May ERRA ▪ Base case Budget: PCIA reform incorporated and assumes lower RPS MPBs based on our internal forecasts 10 2026-U is the Upside Scenario
2026-B is the Base case Scenario

0.078 0.082 0.072 0.083

0.132 0.145 0.135

0.111 0.104

0.026 0.030 0.038

0.037

0.012

0.006

0.008

0.017 0.021
-0.02
0 0.02

0.04 0.06

0.08 0.1

0.12 0.14

0.16 2019 2020 2021 2022 2023 2024 2025 2026-U 2026-B
$/kWh
Fiscal Year
Customer Rate Revenue Profile
Ava Average Rates PCIA Fees Operating Expenses Margin

0.081 0.080 0.066

0.113 0.137 0.141 0.147

0.076 0.060

0.029 0.032 0.043

0.024 0.004 0.010 0.004

0.036 0.042

0.016 0.016

0.003

0.022

0.038 0.035 0.034

0.030

0.046
-0.1
-0.05
0 0.05

0.1 0.15

0.2 2019 2020 2021 2022 2023 2024 2025 2026-U 2026-B
$/kWh
Calendar Year
Customer Rate Revenue Profile
Ava Average Rates PCIA Fees Operating Expenses Margin
Draft Budget Fiscal Year 2025-2026
11 • Current fiscal year budget is presented along
with an "Actuals" column reflecting incurred
actual costs through March 2025 and
projected costs for the final quarter
• 2026 "Base case" budget results in a deficit of
negative $41.9MM and assume utilization of
the Rate Stabilization Fund to offset this
deficit
• While Ava has not previously utilized its Rate
Stabilization Fund, it serves to balance
overcollection and under collection year to
years
AVA COMMUNITY ENERGY FY 2025 FY 2025 FY 2026 FY 2026

BUDGET ACTUALS UPSIDE BASE CASE

OPERATING ACTIVITY
TOTAL OPERATING REVENUE 872,854,000 926,835,000 927,758,000 865,577,000

NON-OPERATING ACTIVITY
TOTAL NON-OPERATING REVENUE 11,449,000 19,160,000 14,767,000 14,767,000 TOTAL NON-OPERATING EXPENSES 25,296,000 23,628,000 11,457,000 11,457,000 NET NON-OPERATING POSITION (13,847,000) (4,468,000) 3,310,000 3,310,000 TOTAL NET REVENUES 42,283,000 113,522,000 20,313,000 (41,868,000) Draft Budget Scenario Assumptions
• Revenues assume no changes to value proposition under both scenarios. Ava maintains 5% discount to PG&E for Bright Choice and a 0.25 cent premium for Renewable 100 • Net revenues assume Ava maintains a 1% uncollectable rate • Energy costs are derived from a blend of contracted and open positions. Open prices are non-stressed, mean-forecasted market prices. • Both scenarios assume implementation of a compliance period procurement methodology over a three-year period of 2024-2026 with an average target of 81% renewable and carbon free energy, which is unchanged from previous board approved targets • Both scenarios assume San Joaquin County begins service in March of 2026 (to be finalized) • No draws on credit facility or use of reserve funds
• We do anticipate use of Rate Stabilization Fund to offset any budget deficit • Non-operating revenues assume an average of 3.5% interest rate earned through the fiscal year • Personnel headcount as 7 incremental additional staff • Local Development allocation is $10MM
12 Budget Uncertainty and Risk Mitigants
• To mitigate a potential deficit there are a
variety of options to consider:
o Adjustments to the customer value
proposition (Bright Choice rate discount and
R100 Premium)
o Adjustments to renewable energy and large
hydro procurement targets (e.g. implement
procurement periods or adjustment of
procurement floors to minimize over-procurement)
o Adjustments to local development funding
o Adjustments to personnel hiring
o Allocating 2024-25 budget surplus to Rate
Stabilization Fund to release in 2026-27
timeframe
13 AVA COMMUNITY ENERGY FY 2027 FY 2027

UPSIDE PCIA REFORM

OPERATING ACTIVITY
TOTAL OPERATING REVENUE 871,419,000 757,262,000

EXPENSES & OTHER USES
Cost of Energy 904,763,000 904,763,000
Cost of Energy Services 15,754,000 15,754,000
Total Energy Operating Expenses 920,517,000 920,517,000 Total Overhead Operating Expenses 54,228,000 52,056,000 TOTAL OPERATING EXPENSES 974,745,000 972,573,000
NET OPERATING POSITION (103,326,000) (215,311,000)

NON-OPERATING ACTIVITY
TOTAL NON-OPERATING REVENUE 16,009,000 16,009,000
TOTAL NON-OPERATING EXPENSES 26,390,000 11,460,000
NET NON-OPERATING POSITION (10,381,000) 4,549,000
TOTAL NET REVENUES (113,707,000) (210,762,000)
Note: For simplicity all revenue & cost assumptions for FY 25-26 are carried over for FY 26-27
Future forecasts (2027 & beyond) are highly uncertain due to market conditions and PCIA reform. There are scenarios in which Ava runs a material deficit in the 2026-27 fiscal year.

Below are indicative downside scenarios.

Draft Budget: Fiscal Year Revenue Scenarios
14 • Difference in revenues in FY 2026 driven by potential MPB settlements
• No change to value proposition in both scenarios
• Bright Choice: 5% discount to PG&E
• Renewable 100: Premium of 0.25 cents to PG&E
• Uncollectable rates maintained at 1% of sales
• No planned recognition of GASB 62 deferred revenue balance At the current 2025 load distribution:
•1% Δ in Bright Choice discount results in
$7.3MM change in revenue
•0.25 cent Δ in R100 premium results in
$5.6MM change in revenue
•Staff may consider a mid-year value
proposition change to bring to the board
later in 2025 as market prices actualize
AVA COMMUNITY ENERGY FY 2025 FY 2025 FY 2026 FY 2026

BUDGET ACTUALS UPSIDE BASE CASE

OPERATING ACTIVITY

REVENUE & OTHER SOURCES
Electricity Sales 881,671,000 924,006,000 937,129,000 874,320,000 Uncollectables (8,817,000) (9,017,000) (9,371,000) (8,743,000) Other Operating Revenue 0 11,846,000 0 0
TOTAL OPERATING REVENUE 872,854,000 926,835,000 927,758,000 865,577,000 Fiscal Year 1% ∆ BC 0.25 Cent ∆ R100
First Half 4,303,000 2,745,000
Second Half 3,020,000 2,873,000
Compliance Period Procurement Methodology
• CA legislatively mandated Renewable Procurement Standards (RPS) include Compliance periods of 3-4 years whereby load serving entities can bank/retire RECs in different years relative to the generating year • This allows for management of variable resources like renewable energy and hydro in meeting compliance obligations while increasing procurement of ghg-free resources over an extended timeframe • Ava can apply a similar approach for our voluntary procurement targets with 3-4 year procurement periods • This approach can help Ava address deficit concerns and reduce costs associated with over-procurement of green attributes by creating a balancing mechanism across the period 15 • The final 2024 Power Content Label is
shown to the right, reflecting total
renewables and large hydro of 96% for Ava
• PG&E procured 23% renewables utilizing
banked RECs to meet its RPS compliance
obligation for 2024
• PG&E's 2025 power content will change
significantly, likely with lower nuclear and
higher natural gas
Compliance Period Procurement Methodology (Cont.)
• Without compliance periods, Ava will continue to over procure as our portfolio includes more contingent, as-delivered contracts, based on the new projects that Ava is building • Ava proposes implementing procurement periods for 2024-2026 to utilize over procurement from 2024 in future years, this would result in our Power Content Label being above and below procurement targets in certain years allowing staff to balance procurement levels based on new projects coming online, firm vs. Contingent contracts, and optimal supply/pricing • There are different variations of this methodology and it is estimated that this can reduce procurement costs in 2025-26 by $10-16MM, which is included in the budget scenarios • Staff to bring forward more detailed procedures and policy in July for board discussion and review 16 Bright Choice 2020 2021 2022 2023 2024 2025 2026
Board Adjusted Target Procurement NA NA 68% 76% 81% 81% 81% Actuals (Renewables + Large Hydro) 55% 58% 71% 89% 96% TBD TBD Over/(Under) procurement % 1% 3% 3% 13% 15% (7.5%) (7.5%) Compliance Period Adjusted Target 73.5% 73.5%
Rate Stabilization Fund Utilization
17 • The GASB 62 Revenue Deferral Fund was
established by Resolution R-2020-26
• Current balance is approximately $57.6MM
with ~$32.1MM retained specifically for rate
stabilization
• Based on the strong forecasted surplus for
2024-25 of >$110MM, staff will propose a
recommendation to allocate all or a portion
to the Rate Stabilization Fund in July/Sept
timeframe
• If we allocate the current year's full surplus,
this would total $145MM for rate stabilization
o With a forecasted deficit of $42MM, this would
leave $103MM for future use
o The Rate Stabilization Fund is intended to be
used to balance surplus and deficit year
reflecting over and undercollection year to year
FY Contribution Recognition BalancePurpose
2020 12,680,000 - 12,680,000
Stabilize Local Development balance until Fund
is established by Reso R2020-26
2021 15,814,000 12,680,000 15,814,000
Recognized LD balance with fund establishment
via Budget. Contributed to PCIA PUBA balance
through December 2023 as allocated by Audit
2022 - - 15,814,000
2023 37,200,000 - 53,014,000
~$10.5MM each for on-bill credits and PPA
premium plus $16.2MM for rate stabilization as
allocated by audit and Resolution R-2023-37
2024 - 10,504,837 42,509,163
Recognition is for on-bill credits, by Resolution
R-2023-58
2025 37,407,824 22,316,492 57,600,495
Contribution for on-bill credits and NBT from
surplus revenue as allocated by audit and
Resolution R-2024-2. Recognition is net on-bill
credits by Resolution R-2024-73.
2026 - - 57,600,495
2027 - 10,504,837 47,095,658
Recognition is for PPA premium contribution
from 2023, by Resolutions R-2023-58 and R-2024-26
2027 - 14,963,130 32,132,528
Possible recognition of NBT incentives
contributed in FY 2025
Draft Budget: Overview of Operating Expenses
18 • Expenses are divided into three overall
cost center categories:
• Energy Operations which includes all
energy, energy attributes, and ancillary
related costs and required management
services such as scheduling, data
management, and customer billing
▪ This category comprises nearly 95% of Ava’s
total operating expenses
• Overhead Operations which includes all
personnel and staffing needs as well as
work function cost centers required to
manage the organization at large, and is
about 5% of total operating expenses
• Non-Operating Expenses, which are all
capital and capital transfer related costs,
includes the local development budget.

This category is presented and discussed
in a later slide AVA COMMUNITY ENERGY FY 2025 FY 2025 FY 2026 FY 2026

BUDGET ACTUALS UPSIDE BASE CASE

EXPENSES & OTHER USES
Cost of Energy 760,248,000 760,682,000 847,322,000 847,322,000 Cost of Energy Services 11,608,000 11,726,000 14,379,000 14,379,000 Total Energy Operating Expenses 771,856,000 772,408,000 861,701,000 861,701,000 Overhead Operating Expenses
Personnel 26,592,000 22,326,000 29,639,000 29,639,000
Marketing & Communications 6,168,000 4,450,000 4,372,000 4,372,000 Legal, Policy, & Regulatory Affairs 4,104,000 2,371,000 4,260,000 4,260,000 Other Professional Services 2,136,000 1,981,000 3,523,000 3,523,000 General & Administrative 5,868,000 5,309,000 7,260,000 7,260,000 Total Overhead Operating Expenses 44,868,000 36,437,000 49,054,000 49,054,000 TOTAL OPERATING EXPENSES 816,724,000 808,845,000 910,755,000 910,755,000 Draft Budget: Fiscal Year Energy Operations
19 Energy Costs
• Costs are derived from a blend of contracted and
open positions for all energy, attributes, and RA
▪ Open prices are non-stressed, mean-forecasted
▪ FY 2026 overall prices are expected to be about 11%
higher than FY 2025 on average
▪ Material increases in Open and RA costs
• RECs are lower to reflect compliance period
savings
• Approx. 25.3% of cost is with open positions to
the market. This gives up to $70MM of potential
cost increases from market risk
• Note: While the last year maintained stabile
market prices, we are still in a period of
historically high brown power prices with FY 2026
prices projected at 70% above 10-year average,
and expected to increase in later years
AVA COMMUNITY ENERGY FY 2025 FY 2025 FY 2026 FY 2026

BUDGET ACTUALS UPSIDE BASE CASE

EXPENSES & OTHER USES
Cost of Energy 760,248,000 760,682,000 847,322,000 847,322,000 Energy Services
Data Management/CRM 8,057,000 8,170,000 10,326,000 10,326,000 Billing & Metering 2,820,000 2,826,000 3,286,000 3,286,000 Scheduling 731,000 730,000 767,000 767,000
Cost of Energy Services 11,608,000 11,726,000 14,379,000 14,379,000 Total Energy Operating Expenses 771,856,000 772,408,000 861,701,000 861,701,000 PPAs Hedges Open Resource
Adequacy
RECs Carbon Free
FY 2026 Budget to FY 2025 Actuals by Attribute
FY 2025 FY 2026
Draft Budget: Fiscal Year Non-Operating Details
20 Non-Operating Revenue
• Interest Income is based on expected returns
for the managed treasury accounts for
reserve funds and rotating working capital
▪ Rates are estimated at 3.5%
• Other Non-Operating Revenue is rent from
the AT&T tower on the 8th Street building
Non-Operating Expenses
• Borrowing Interest are costs associated with
Ava’s credit facility held with US Bank. This
facility will be up for renewal in October 2025
and current market surveys indicate
marginally more favorable rates
• Capital Expenditures are costs estimated for
tenant improvements at 1999 Harrison St
offices
AVA COMMUNITY ENERGY FY 2025 FY 2025 FY 2026 FY 2026

BUDGET ACTUALS UPSIDE MPB FLEX

NON-OPERATING ACTIVITY

NON-OPERATING REVENUE
Interest Income 11,400,000 19,144,000 14,718,000 14,718,000 Grants 0 0 0 0
Other Non-Operating Revenue 49,000 16,000 49,000 49,000 TOTAL NON-OPERATING REVENUE 11,449,000 19,160,000 14,767,000 14,767,000

NON-OPERATING EXPENSES
Borrowing Interest 2,796,000 1,228,000 1,087,000 1,087,000 Local Development Funding 22,400,000 22,400,000 10,190,000 10,190,000 Capital Expenditures
Investments 0 0 0 0
Other CapEx 100,000 0 180,000 180,000
Total Capital Expenditures 100,000 0 180,000 180,000
TOTAL NON-OPERATING EXPENSES 25,296,000 23,628,000 11,457,000 11,457,000 NET NON-OPERATING POSITION (13,847,000) (4,468,000) 3,310,000 3,310,000 Draft Budget: Local Development Incremental Funding Allocation 21 Program Area Previous
Upside
Budget
Current
Proposed
Budget
Comments
Ava Charge $5,000,000 $3,000,000 Upside allocation would support expansion to additional cities Critical Municipal Facilities (CMF) $6,000,000 $0 Upside allocation would support a second future portfolio Heat Pump Water Heater support $5,000,000 $0 Program funding to support Air District gas water heater phase out Future Roadmap Funding $5,000,000 $4,000,000 Upside allocation to support 2027 programmatic effort. PCIA reform allocation could be used for CMF, expansion of Ava Charge, heat pump support, or future road map
Consultants for Roadmap $500,000 $500,000 Allocation for external consultants to help inform future roadmap for 2027 forward
Legal expenses $1,500,000 $1,050,000 Expenses associated primarily with Ava Charge and CMF Marketing expenses $2,000,000 $1,640,000 Expenses to support operational programs, such as Ava Charge, Ava Bike Electric, Ava SmartHome Charging, and the upcoming solar and storage program
FY25-26 Total Additional LD Funding $25,000,000 $10,190,000 Est EOY LD Fund Balance $92,000,000
Potential updated Fund Balance $117,000,000 $102,190,000 Ava is currently in the execution phase of previously budgeted programs (more details on following slide) and additional strategic planning for future phase implementations is underway Local Development –
FY26 anticipated spend of existing funding
22 Program Area Previously Funded Comments
Ava Charge $1,500,000 Development, Operations and Marketing Critical Municipal Facilities $8,000,000 Capital expenditure and risk mitigation Grants $950,000 Payments for contracted grants
Solar + storage upfront incentives $2,000,000
Incentives and expenses for ongoing programs
Solar + storage ongoing incentives $500,000
Health-e Communities pilot $1,000,000
Building Efficiency Accelerator $1,000,000
Ava Bike Electric incentives $5,000,000
Ava SmartHome Charging incentives $900,000
Total $20,850,000
Next Steps
• Staff will continue to refine modeling and market assumptions, but does not anticipate material updates to this budget
• Preliminary Draft budget was presented in May to Ex Comm, FAP, and Full board • Staff will seek approval at Full board on June 18, 2025 and is seeking feedback from Ex Comm on the recommendation
• Staff recommendation is to approve the base case budget ▪ The base case scenario is our best estimate of market prices and reflects a more conservative scenario ▪ Implement the Compliance Period Procurement methodology – detailed procedure and policy to be brought forward for review with board in July
▪ Utilize GASB-62 Rate Stabilization Fund to offset any potential fiscal year deficit – formal recommendation to allocate a portion of the fiscal year 2024-25 surplus (forecasted at >$110MM) to the Rate Stabilization Fund to be brought forward in July/Sept timeframe
• Staff will consider a value proposition adjustment as part of a mid-year budget update based on how market prices actualize
23 Appendix
24 Background & Discussion
25 • Every year in June, Ava Board of Directors (the “Board”) approves the following fiscal year’s budget • This draft budget has been reviewed with the Ex Comm (5/7) and FAP (5/8) • The Budget typically goes through a few rounds of review in May with formal board approval in June • The Budget covers the overall categories of the General Operating Fund:
▪ Revenues from Operations
▪ Energy Operating Expenses
▪ Services to Facilitate Energy Operations
▪ Operational Overhead to Energy Operations
▪ Non-Operating Revenues
▪ Non-Operating Expenses, including a Capital Transfer to the Local Development Fund • Expenses are typically 90%+ energy related with overhead and Local Development funding accounting for 6-8% of total expenses
How Ava Works—Revenues & Rates
• Ava offers two electricity products to customers:
• Renewable 100: 100% of the energy is from renewable resources • Originally set at $0.01/kWh above PG&E and has migrated down as Ava financials improved • Currently priced at $0.0025/kWh above PG&E rates
• Bright Choice: In 2025-26 this will be 81% from renewable energy and large hydro, plus ~10% nuclear • Originally set at 1.5% discount to PG&E, reduced to a 1% discount in 2021,increased to a 3% discount in 2022 • The latest adjustment was to a 5% discount to PG&E rates in 2023 • The current percent load of Bright Choice customers is ~72% for FY 2026 26 How Ava Works—Energy Delivery
• Ava sells energy directly to its customers by procuring energy through various market mechanisms and scheduling delivery into California Independent Service Operator (CAISO) • Ava is not responsible for transmission or delivery of the commodity; this is a service retained by PG&E • Per Ava’s risk management policy, much of the expected load is procured and hedged in advance across energy, RECs, and Resource Adequacy
• Ava schedules it's forecasted load with CAISO on a day-ahead basis and real-time basis • This is done regardless of the amount of energy hedges that Ava has procured • The CAISO is California’s regional market balancing authority whose primary purpose is to keep the energy being pulled off the grid balanced by energy being put on the grid to prevent grid damage or area shortages 27 How Ava Works—Billing Cycle
• Revenues are made from sales of energy to customers based on generation rates that are indexed to PG&E cost of service rates as approved by the CPUC
• PG&E will read Ava customer meters to monitor consumption. These reads are then reported to Ava and its Billing data manager
• The consumption data is processed to generate billing amounts based on Ava’s rates and then sent back to PG&E, who then issues the bills and collects payments on Ava’s behalf • PG&E's bundled customers and unbundled (Ava) customers also pay a power charge indifference adjustment (PCIA) and minor system fees. These are collected by PG&E from customer revenues and retained prior to payment distribution to Ava.
o Additionally, all PG&E bundled and unbundled customers are charged a Transmission & Distribution cost • A billing cycle is typically about three months, meaning it takes about three months for Ava to receive payment from a customer’s consumption
• Consumption occurs in the first month
• A bill is issued in the second month
• Payment is due in the third month
28 Power Charge Indifference Adjustment (PCIA)
• Ava’s generation rates to customers are indexed to PG&E’s generation rate • A portion of the generation cost is a pass-through charge to PG&E for the PCIA • The PCIA is how PG&E recovers "stranded costs or credits" for legacy generation resources • PCIA rates are based on an annual mark-to-market
• For Energy, Resource Adequacy (RA), and Renewable Portfolio Standard (RPS) resources, the mark-to-market is against "Market Price Benchmarks" (MPBs)
• Forecasts for MPBs are presented by the Investor-Owned Utilities (IOUs) in May and then updated in October to establish the next year’s rates
• PCIA and rates are "trued up" from forecast to actual, and any overcollection or under-collection is recovered in rates the following year.
• Higher MPBs higher rates and lower PCIA = more operating headroom for Ava • Lower MPBs lower rates and higher PCIA = less operating headroom for Ava 29 Portfolio
Costs
Portfolio
Value*
Stranded
Costs/credit
*Value calculated using “Market
Price Benchmarks” (MPBs)
Carbon Free & Renewable Procurement Schedule
30 • In April 2022, the Board approved
the “Path to Zero by 2030” for the
Bright Choice product, as shown
in the table to the left
▪ Carbon Free percentages reflect
renewable and large hydro energy
on a net annual basis
• In previous years, the Board has
approved an increase to carbon
free procurement targets
• June 2024, the Board approved an
additional 5% to calendar year
2025 targets; increasing from
76% to 81%
Year Path Target Increase Updated Target Increase Updated Target Increase Updated Target Increase Updated Target 2022 63% 5% 68% -- -- -- -- -- --
2023 66% 5% 71% 5% 76% -- -- -- --
2024 71% 0% 71% 10% 81% 0% 81% -- --
2025 76% 0% 76% 0% 76% 5% 81% 0% 81%
2026 81% 0% 81% 0% 81% 0% 81% 0% 81%
2027 85% 0% 85% 0% 85% 0% 85% 0% 85%
2022 2023 2024 2025
Draft Budget: Fiscal Year Personnel Details
31 • FY 2024 Budget was set for 15 additional FTE (83 total) and FY 2025 Budget was set for 15 additional FTE (98 total) to expand on internal expertise, build more depth, and help scale operations further. • FY 2026 Budget seeks to add 7 additional FTE (105 total) to continue addressing increased workflow in key areas and meet essential business needs.
▪ Proposed additional hires have been separated to align with the two budget scenarios presented (7): 3 Power Resources, 2 Operations, 1 Local Development, 1 Marketing • Compensation Adjustments:
▪ COLA: 3%; Promotions/Wage Adjustments: 3%; Merit-based Compensation: 13% • Note: In 2023-2024, Ava adjusted compensation structure to standardize pay scales and create merit-based compensation to reduce pay bias in salaries as a DEI initiative 2025 2025 2026 2026
PERSONNEL BUDGET %Cost ACTUALS %Cost UPSIDE %Cost BASE CASE %Cost Salaries & Wages 19,765,000 74.3% 16,207,000 80.5% 23,171,000 78.2% 23,171,000 78.2% Health Care/Benefits 3,961,000 14.9% 1,616,000 8.0% 3,242,000 10.9% 3,242,000 10.9% Retirement 2,450,000 9.2% 2,032,000 10.1% 2,745,000 9.3% 2,745,000 9.3% Payroll Expenses 416,000 1.6% 284,000 1.4% 481,000 1.6% 481,000 1.6% Total Personnel Costs 26,592,000 100.0% 20,139,000 100.0% 29,639,000 100.0% 29,639,000 100.0% Draft Budget: General & Administrative
32 Current Year Material Items:
• Operational Expenses were slightly higher than expected due to additional banking fees associated with certain energy contracts • Rent & Utilities were slightly above expected amounts due to increased on-site needs with internet, parking, and on-site board meetings
• HR & Recruiting costs were slightly higher than expected with increased recruiting efforts
• Small Equipment is well below expected amounts due to lower than expected equipment cycling
• All other areas are actualizing lower than expected costs Next Year Material Items:
• Operational Expenses: Increased staff costs related
to insurance, service fees, supplies, membership
dues, operational services, building maintenance,
and other relevant G&A
• Membership Dues, Fees, & Operating Expenses:

Costs associated with JPAs, trade associations, and
industry associations (CalCCA, CCCFA, CCPower,
CFEE, Veloz, etc.)
• Software & Subscriptions: Increase covers
additional software needs for Power Resources, HR,
and EAS, as well as essential subscriptions for
ongoing operations with expanded staff
• Rent & Utilities: Increases with lease transition and improvements
• Board & Director Fees: Draft Budget reflects
potential maximum cost

DRAFT BUDGET BUDGET ACTUALS
2026 2025 2025

GENERAL OPERATIONS
Operational Expenses 1,200,000 832,000 844,000
Memberships & Sponsorships 1,165,000 600,000 678,000
Software & Subscriptions 3,052,000 2,669,000 2,132,000
Small Equipment 310,000 510,000 79,000
Rent & Utilities 1,021,000 770,000 965,000
Conferences & Prof. Development 231,000 249,000 146,900 HR & Recruiting 190,000 156,000 251,000
Board & Director Fees 91,000 78,000 37,100
Total 7,260,000 5,864,000 5,133,000
Draft Budget: Marketing & Communications
33 Current Year Material Items:
• Advertising & Promotions: Advertising costs and
promotional items were sourced at lower-than-expected costs, also certain special event fundings did not materialize

DRAFT BUDGET BUDGET ACTUALS
2026 2025 2025

MARKETING
Advertising & Promotions 1,450,000 1,515,000 541,000
Required Mailings 635,000 1,052,000 813,000
Communications 1,450,000 2,755,000 2,397,000
Sponsorships & Memberships 661,000 780,000 624,000
Software & Subscriptions 176,000 66,000 75,000
Total 4,372,000 6,168,000 4,450,000
Next Year Material Items:
• Advertising & Promotions: Event and Local
sponsorships, education and awareness
campaigns, other printing costs
• Required Mailings: Enrollment notifications
for San Joaquin County, Fremont R100
notifications, Joint Rate Mailer, Power Content
Label Mailer
• Communications Consultants: Consultants
for graphic design, public relations, other
creative services
• Software & Subscriptions: With efficiencies
in other areas, software and subscriptions are
expected to increase to compensate
Draft Budget: Legal, Policy, & Regulatory Affairs
34 Current Year Material Items:
• Legal Consultants: Certain expected litigations costs did not wholly materialize in the fiscal year, also
efficiencies in procedure developed by counsel and
staffing has reduced outside counsel demand
• Software & Subscriptions: Software expectations
were not implemented in current FY, but are planned
for next year
Next Year Material Items:
• Policy & Legislative Consultants: Expected
increase due to increase in CPUC docket

DRAFT BUDGET BUDGET ACTUALS
2026 2025 2025

LEGAL, POLICY, & REGULATORY AFFAIRS
Legal Consultants 3,143,000 3,238,000 1,694,000
Policy & Legislative Consultants 740,000 560,000 571,000 Software & Subscriptions 298,000 256,000 56,000
Memberships & Sponsorships 79,000 50,000 50,000
Total 4,260,000 4,104,000 2,371,000
Draft Budget: Other Professional Services
35 No significant current year
material items to report.

Consultant projects are well
managed.

DRAFT BUDGET BUDGET ACTUALS
2026 2025 2025

OPERATIONS CONSULTANTS
Operations 475,000 335,000 311,000
Finance Consultants 650,000 333,000 309,000
Power Resources Consultants 741,000 715,000 664,000
Human Resources Consultants 747,000 364,000 338,000
Technology Consultants 460,000 25,000 24,000
Information Technology Consultants 450,000 360,000 335,000 Total 3,523,000 2,132,000 1,981,000
Next Year Material Items:
• Operations: Increase due to tenant improvement contractors and project management consultants
• Finance Consultants: Increase is from new Treasury Manager costs and some expected increases in rates from current consultants • Human Resources: With headcount growth and continued staff collaboration on key initiatives, increased need for training & development plus increased scope with 3rd-party staffing agencies. • Technology Consultants: Expanding operations requires additional data engineering and CRM structure and design
Executive Committee
Presentation:

Prepay Financing Update
June 4, 2025
• IRS Regulations allow for tax-exempt debt to be issued for the prepayment of electricity to serve load • Energy Prepays are complex transaction structures requiring at least three parties:
▪ Energy Recipient, e.g. Ava
▪ Prepaid Energy Provider/Supplier, e.g. Morgan Stanley, Goldman Sachs, RBC, etc. ▪ Bond Issuer, e.g. CCCFA, a Conduit Issuer
• Cost of funding with tax-exempt debt is lower than supplier would otherwise receive borrowing from taxable market or from using internal funding at their cost of capital • Energy supply agreement where buyer (Ava) commits to purchase the commodity over a term, receiving a discount to the market price – lowers Ava's costs on existing and future energy contracts ▪ Ava maintains energy contracts assigned from its portfolio into prepay structure through 30-year deal term • Bond investor risk is tied to the supplier and corporate guarantor to make debt service payments and redeem bonds if termination events occur or bankruptcy
Prepay Financing Background
2 What is a Prepay?
▪ RFP and selection of providers for Prepays 4 & 5 March/April ▪ Discuss at April Board and further at May FAP and June Ex Comm before seeking Board Approval in June
▪ Staff will be seeking approval at June Ava Board and CCCFA Board meetings for two transactions
▪ Prepay #4 Morgan Stanley – plan to issue up to $1.25 billion prepay bonds late June or shortly after ▪ Prepay #5 Goldman Sachs – plan to issue up to $1.25 billion prepay bonds in August/September Prepay Planning Process
3 Green Bond Designation
What are Green Bonds?
• Bonds offered to investors that have been designated as bonds that qualify as “Green Bonds” per ICMA’s Green Bond Principles in the eligible project category of renewable energy. • Targets the marketing of bonds to investors who are seeking investments that support carbon reduction efforts aligning with Ava’s core values
• Potential pricing benefits by driving demand for these investments that improve transaction economics • Second Party Opinions (SPO) review the use of the proceeds and certifies through its opinion that the bonds adhere to the ICMA’s Green Bond Principles
Ava Green Bonds
• Ava’s three prior Prepay transactions were sold as Green Bonds • Ava intends to seek Green Bond designation for the upcoming prepay transactions. • Kestrel Verifiers will be engaged to review the use of proceeds and determine eligibility, and if qualified, Ava will use the Green designation
• Kestrel will issue a Second Party Opinion (SPO) to be included in the Offering Statement 4 Beneficial Elements to a Prepay
5 • Power Contract Assignment:
▪ Existing renewable PPAs are assigned to the taxable Prepay Supplier. The LSE (i.e. the CCA). continues to take and pay for energy and attributes from the Prepay Supplier, delivered through the contract. • All other terms of the PPA are unchanged
• Termination:
▪ If the prepay program terminates early, prepaid supplier fails to perform, or LSE (CCA) fails to perform, the LSE(CCA) forgoes the future savings and the assigned PPA contract is put back to the original

LSE (CCA)
• Debt Issued by Conduit Issuer:
▪ Non-Recourse: Prepays utilize non-recourse municipal bonds and are not secured or guaranteed by the LSE Rather the debt is recourse to the Prepay Supplier (i.e. the bank receiving the prepayment). This significantly protects the LSE(CCA) and mitigates risk related to the payment of power contracts novated through the prepay.
• Off Balance sheet for LSE/CCA:
▪ Bonds are issued by a municipal bond conduit and arranged by the Prepay Supplier Potential Risks
6 • Out of Pocket Costs if a transaction does not materialize – Consultants are primarily contingent on a successful deal, with the exception of certain rating agency and green bond designation fees
– Consultants are primarily paid from deal proceeds vs. Ava directly • Opportunity Cost of higher savings through the prepay transaction or alternative structure initiated at a different time.
– To the extent that MS does not provide the minimum discount Ava will have a right not to proceed in future repricing periods.

Minimum discount will likely be set at around 6-7%. Target initial discount is 8-10%. – Ava also has a right to shop the prepay provider if we view that the offered discounts are not at market • Load loss or inability to assign a PPA into the prepay due to contractual limitations would likely lead to remediation or remarketing activities and potentially result in the loss of the discount. ― Note that costs would not increase above contractual levels • Tax and Regulatory risk -changes to tax exempt financing rules or changes to RPS standards • Political and reputational risk associated with a transaction unwinding due to non-compliance to tax codes or other material contractual breach
Transaction Structure Prepays 1,2 & 3
7 Prepay Supplier
(Morgan Stanley)
Municipal
Conduit (CCCFA) LSE/CCA (Ava)
Existing PPA to
be Assigned
Non-Recourse
Tax-Exempt
Bonds
Existing PPA
Counterparty
Contract Price
Prepayment $$
Contract Price
Less Discount
MWhs + RECs MWhs + RECs
+ Debt Service
MWhs + RECs
Debt
Service
Bond
Proceeds
Commodity
Swap
Counterparty
Fixed $$ Fixed $$ Index $$ Index $$
Transaction Structure-Proposed Prepays 4&5
8 Involved Parties to Prepay Transactions
9 Prepay Supplier/Bond Underwriter: Morgan Stanley/Goldman Sachs – Selected through solicitation issued November 2019/2025 Special Purpose Vehicle – entity created to enable funding recipient to differ from Prepay Supplier Funding Recipient: Large taxable organizations such as Insurance Companies and Banks Municipal Financial Advisor: PFM Financial Advisors LLC & PFM Swap Advisors LLC Counsel: Orrick, Herrington & Sutcliffe (Bond & Tax Counsel) | Chapman & Cutler LLP (Disclosure & Issuer’s Counsel) Bond Issuer: California Community Choice Financing Authority Custodian: Bank of New York
Commodity Swap Counterparty: Natixis, RBC, others
– RBC in 2021, Natixis was the swap counterparty in 2022, 2023 and selected for 2025 (lowest cost) Credit Rating Agency: Moody’s Investor Service Inc
Diversification Benefits Within Prepays
10 ▪ CCA prepays have primarily always been with the same supplier and funding recipient ▪ Diversifying suppliers and funding recipients can provide benefits and mitigate risk ▪ Diversifying the Energy Supplier reduces risk to Ava
• Ava has 3 prepays with Morgan Stanley and is planning Prepay 4 • By diversifying, Ava can better protect its risk to losing the discount, if the supplier becomes insolvent or other unforeseen supply concerns
• Staff proposing to use Goldman Sachs for the Prepay 5 to begin to diversify ▪ Investors seek to diversify their portfolio risk and will bid more aggressive with a new funding recipient
• May increase savings offered due to higher investor demand for the new funding recipient credit risk • Ava proposes utilizing this new structure for Prepay's 4&5 to access new funding counterparties • Will not increase risk to Ava
Potential Funding Recipients & CCA Experience
11 Firm Rating
Morgan Stanley & Co. A1
Deutsche Bank Baa1
Canadian Imperial Bank of
Commerce Aa2
Bank of Montreal Aa2
Athene Annuity and Life Company A1
Global Atlantic (Forethought Life
Ins. Co.) A2
Sumitomo Mitsui Banking
Corporation A1
Nomura Holdings Baa1
Pacific Life Aa3
Corebridge Financial (American
General Life Ins.) A2
New York Life Aaa
The Southern Company Baa1
Societe Generale Baa2
BNP Paribas, New York Branch Baa1
Recent Transactions Using New Structure
CPA/ CCCFA Series 2023C: Deutsche Bank
CPA / CCCFA Series 2023D: American General Life
Insurance Co.
3CE / CCCFA Series 2023F: National Bank of Canada
SMUD / NCEA Series 2024: Pacific Life Insurance
Company
CPA / CCCFA Series 2024B: Athene Annuity & Life Co.

PCE / CCCFA 2024C: American General Life Insurance Co.

Sonoma / CCCFA 2024G: Athene Annuity & Life Co
CPA/ CCCFA Series 2024H: New York Life
TID/ CVEA Series 2025A: Pacific Life Insurance Co.

VCE/ CCCFA Series 2025A: Athene Annuity & Life Co.

Documents Overview: Ava Signs
12 1. Power Supply Contract
– Sets forth terms for which CCA receives energy for 30-year term – Signed by Ava and CCCFA

2. Letter Agreement Regarding PPA Assignments
– Details the terms of the limited assignment of PPAs between Ava and 3rd party energy sellers – Signed by Ava and Morgan Stanley/Goldman Sachs (Prepay Supplier)

3. Form of Limited Assignment
– Details the terms of the limited assignment of each energy PPA Ava assigns into prepay – Signed by Ava, the original PPA counterparty, and Morgan Stanley/Goldman Sachs (Prepay Supplier)

4. Project Administration Agreement
– Sets out terms for CCA to act on behalf of the Issuer – Signed by Ava and CCCFA

5. PPA Payments Custodial Agreement
– Details cash flows between PPA Buyer (CCA), Prepay Supplier, and Custodian – Signed by Ava, Morgan Stanley, and Custodial Bank

6. Cost Share Memorandum of Understanding (MOU)
– Details the cost share arrangement with MS/GS to cover rating agency and green bond designation fees and Ava responsibility to cover costs in place of CCCFA
Documents Overview: CCCFA Signs
13 1. Prepaid Agreement
– Details the flow of power and payments between the Prepay Supplier and the Issuer (CCCFA) – Terms are largely mirrored in the Power Supply Contract

2. Re-pricing Agreement
– Sets forth terms for remarketing and repricing for future bond repricing periods

3. Trust Indenture
– Sets forth terms of bond issuance and rights of bondholders – Details that all revenues relevant to transaction flow to and through conduit issuer (CCCFA)

4. Commodity Swap documents
– Docs pursuant to which the commodity price is hedged with a 3rd-party swap counterparty (to insulate transaction from market variations)

5. Parent Guarantee
– Guarantee of “due and punctual payment” from Prepay Supplier to conduit issuer (CCCFA) – Flows in favor of conduit issuer and swap counterparty, respectively

6. Front-End Custodial Agreement
– Outlines payment flows through the transaction, signed by CCCFA, Custodian, and Bond Trustee – Also a Back-End Custodial Agreement which is signed by Morgan Stanley/Goldman Sachs, Custodian, and Bond Trustee Q&A- Discussion
14 Archive/Backup –Prior Meeting Info
15 Prepay Timeline :
16 March-April-May
o Prepay Supplier RFP – Selection late April – Morgan Stanley 1st , Goldman Sachs on 2nd o Transaction Kickoff with full Financing team
o Analysis of Contracts/Volumes for Inclusion in Prepay o Deal structuring/Document and Disclosure drafting
May-June
o Discuss Further at May FAP and June Ex Comm & Seek Board Approval in June o Present at CCCFA Board for Approval
Late June-Early July-Aug/Sep (market depending)
o Marketing and Pricing Prepay Bonds
o Close first Prepay; TBD on second (most likely late Aug/Sep) • 2019 - Ava issued RFP for Prepay Services (Prepay
Provider)
• 2021 – Ava closes first-ever CCA energy prepay
bond transaction
Ava’s Prepay Experience:
17 Timeline of Ava Prepay Activity: Structural Innovations Ava Employed • Short-term bridge PPA & forward energy price curve
to size prepays provides flexibility on timing to
market
• Master Custodian Agreement optimizes use of PPAs
• Monthly Tracking / Annual Settlement reduces
operational burden
• Morgan Stanley partnered with Ava on innovations
• 2024 - Ava amended prepays to maximize savings
and optimize operations
Ava’s Prepays to Date
Prepay Date Closed Provider/Supplier Bond Size
1 9/23/21 Morgan Stanley $1.20B
2 7/12/22 Morgan Stanley $0.93B
3 8/16/23 Morgan Stanley $0.99B
Ava is part of a list of leading CCAs
that have issued energy prepay bonds:
• Ava Community Energy
• Clean Power Alliance (CPA)
• Silicon Valley Clean Energy (SVCE)
• Peninsula Clean Energy (PCE)
• Marin Clean Energy (MCE)
• Sonoma Clean Power (SCE)
• Valley Clean Energy (VCE)
Ava’s Prepay Savings Through ‘24 Total $21.7M
18 -
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
4,500,000
Q1 '22 Q2 '22 Q3 '22 Q4 '22 Q1 '23 Q2 '23 Q3 '23 Q4 '23 Q1 '24 Q2 '24 Q3 '24 Q4 '24 Quarterly Savings by Prepay
Prepay #1 Prepay #2 Prepay #3
Transaction Planning & Supplier Selection
19 Staff is planning for at least 1 and possibly 2 transactions in 2025 and may seek approval for both simultaneously
❖ In, 2024, CPA received approvals for 3 simultaneously and entered the market at separate times successfully
Supplier Selection:
❖ All 3 Ava prepays were with Morgan Stanley as the prepay supplier ❖ Last RFP was in 2019, refresh sent out in late March; currently evaluating 4 responses ❖ There are merits to both diversification and to continuing with similar provider ❖ Consideration for splitting into two deals to optimize/de-risk execution Thank you!
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Ava Community Energy Executive CommitteeJune 4, 2025

Ava Community Energy Executive Committee
June 4, 2025