Ava Community Energy Financial, Administrative and Procurement Subcommittee
January 28, 2026

Introduction
2 • Every June, Ava’s Board of Directors (the “Board”) approves spending for the following fiscal year spanning from July 1st through June 30th of the following year. • Staff reviews budget performance internally regularly and presents these results to the Board at, or about, the mid-year mark.
• Ava’s accounting cycle generally requires about 45 days to close a period to ensure all revenues and expenses are captured accurately. Thus, the close of December 31st is typically mid-February. • Presenting the mid-year analysis in February allows a more accurate presentation on the true half year performance.
• The mid-year report presented today covers the closed months of July through November, a “soft” close estimate of December, and updated projections for the second half of the fiscal year—January through June. These updated values will collectively be referred to as “actuals” even though only July through November are confirmed
3 Ava Community Energy
Fiscal Year 2025-2026 Mid-Year Budget Update
• Expecting increase in operating revenue by
$5.8MM
▪ Operating Revenue increases by $41.1MM without
use of Rate Stabilization Fund (GASB 62)
• Cost of Energy expected to increase by $5.1MM
• Overhead expenses forecasted to be reduced
by $3.5MM
• Non-Operating activity is expected to add an
addition $13.2MM to net revenues
• Net Revenues are projected to be positive by
about $17.5MM
▪ Net Revenue increases by $52.8MM without use of
Rate Stabilization Fund (GASB 62)
The following slides provide more detail on these
changes
4 First Half Budget to Actuals
• Revenues from sales were $40.1MM under
budget driven by lower load resulting from milder
than expected weather
• Cost of Energy was $20.9MM under budget driven
by lower load/lower energy prices, higher than
forecasted RA sales, and higher than forecasted
large hydro production. This was partially offset
by higher REC costs as a result of higher market
price benchmarks.
• Overhead expenses are $5.1MM below budget
due to cost reductions, deferred hiring, and
deferred functional area costs
• Non-Operating activity increased net revenues by
$10.5MM from higher interest rates on
investments and reduced Local Development
funding from the December Board decision
• Net revenues were $2MM below expected budget
5 Second Half Original Budget to Updated Budget
• Revenues from electricity sales is forecasted to increase by $44.2MM driven by changes in value proposition, higher than forecasted 2026 rates, and SJ County enrollment in May
o Operating Revenue increases by $79.6MM when excluding RSF (GASB62)
• Cost of Energy is forecasted to increase by $26MM relative to budget driven by higher energy prices and higher REC costs due to increased market price benchmarks
o Note: Dec update forecasted lower energy prices for 2026 relative to budget. Between Dec to Jan energy costs increased by $16MM due to the extreme cold conditions throughout the country, outside of CA.
• In Overhead, continued savings from deferred hiring for open positions while deferred costs from the first half in other functional areas are back half weighted
• Non-Operating Expenses includes reduced Local
Development Funding
• Net Revenues are expected to increase by $19.5MM from the original budget
o Net Revenues increase by $54.9MM without use of RSF
GASB62