Financial, Administrative and Procurement Subcommittee
Meeting
Wednesday, May 27, 2026
3:30 pm
In Person:
Altamont Conference Room
Ava Community Energy
1999 Harrison Street, Suite 2300
Oakland, CA 94612
Or from the following locations:
• 1110 Webster St Conference Room 2nd floor, Oakland, CA 94607 • 34009 Alvarado-Niles Road, Union City, CA 94587
• 35653 Scarborough Dr, Newark, CA 94560
• Dublin Civic Center, 100 Civic Plaza, Dublin, CA 94568 Via Zoom:
https://avaenergy-org.zoom.us/j/83599993289
Or join by phone:
Dial (for higher quality, dial a number based on your current location): US: +1 669 900 6833 or +1 346 248 7799 or +1 253 215 8782 or +1 929 205 6099 or +1 301 715 8592 or 888 475 4499 (Toll Free) or 877 853 5257 (Toll Free) Webinar ID: 835 9999 3289
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) 707-1764 or [email protected].
If you have anything that you wish to be distributed to the Finance, Administration and Procurement Subcommittee, please email it to the clerk by 5:00 pm the day prior to the meeting.
1. Welcome & Roll Call
2. Public Comment
Ava Community Energy
Board of Directors Page | 2
This item is reserved for persons wishing to address the FAP Subcommittee on any Ava-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 Board are customarily limited to three minutes per speaker. The FAP Chair may increase or decrease the time allotted to each speaker.
3. Approval of Minutes from January 28, 2026 (Action Item)
4. Quarterly Financial Statements (Informational Item)
Deliver Q3 2025-26 Quarterly Financial Statements; Discuss YTD Budget to Actuals Performance.
5. Prepay Financings (Informational Item)
Review of 2026 Prepay Transaction Plans.
6. 2026-2027 Budget Preview (Informational Item)
Review of draft budget for the next fiscal year.
7. Committee Member and Staff Announcements including requests to place items on future Board Agendas
8. Adjourn
The next Financial, Administrative and Procurement Subcommittee meeting will be held on Wednesday, September 9, 2026 at 3:30pm.
Altamont Conference Room
Ava Community Energy
1999 Harrison Street, Suite 2300
Oakland, CA 94612
Draft Minutes
Financial, Administrative and Procurement Subcommittee
Meeting
Wednesday, January 28, 2026
3:30 pm
In Person:
Altamont Conference Room
Ava Community Energy
1999 Harrison Street, Suite 2300
Oakland, CA 94612
Or from the following locations:
• 1110 Webster St Conference Room 2nd floor, Oakland, CA 94607 • 34009 Alvarado-Niles Road, Union City, CA 94587
• Clipper Club, 5 Captain Drive, Emeryville, CA 94608
• Dublin Civic Center, City Manager's Office, 100 Civic Plaza Dublin, CA 94568 • Milk and Honey Cafe, 34265 Fremont Blvd Fremont, CA 94555 Via Zoom:
https://avaenergy-org.zoom.us/j/83599993289
Or join by phone:
Dial(for higher quality, dial a number based on your current location): US: +1 669 900 6833 or +1 346 248 7799 or +1 253 215 8782 or +1 929 205 6099 or +1 301 715 8592 or 888 475 4499 (Toll Free) or 877 853 5257 (Toll Free) Webinar ID: 835 9999 3289
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) 707-1764 or [email protected].
If you have anything that you wish to be distributed to the Finance, Administration and Procurement Subcommittee, please email it to the clerk by 5:00 pm the day prior to the meeting.
1. (0:38) Welcome & Roll Call
Present: Directors: Morada (Dublin), Keng (Fremont), Brown (Oakland), Sakakihara (Union City), and Chair Kaur (Emeryville).
Ava Community Energy
Board of Directors Page | 2
Absent: Director Del Catancio (Newark).
2. (1:11) Public Comment
This item is reserved for persons wishing to address the FAP Subcommittee on any Ava-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 Board are customarily limited to three minutes per speaker. The FAP Chair may increase or decrease the time allotted to each speaker.
There were no speakers for public comment.
3. (1:21) Approval of Minutes from September 8, 2025 (Action Item) Director Morada (Dublin) motioned to approve the minutes. Director Keng (Fremont) seconded the motion, which passed 6/0/0/0/1.
Yes: Morada (Dublin), Keng (Fremont), Brown (Oakland), Del Catancio (Newark), and Chair Kaur (Emeryville).
No: None.
Abstain: None.
Recuse: None.
Not Present: Director Sakakihara (Union City).
There were no speakers for public comment.
4. (4:05) FY 2025-26 Mid-Year Budget Review (Informational Item) Review the mid-year performance of actuals through December 2025 and updated projections through June of 2026 as compared to the fiscal year budget.
Howard Chang presented the FY 2025–2026 mid-year budget update, reporting improved financial projections driven by operational savings, higher revenues, and reduced reliance on reserves. He noted that mild weather lowered electricity sales in the first half of the year, while rising energy prices continue to create market volatility.
There were no speakers for public comment.
Selection of topics discussed by subcommittee members:
• Frequency and timing of budget reforecasting and financial updates • Impacts of current fiscal year performance on future budget projections • Energy market volatility and unexpected fluctuations in energy and natural gas prices
• Variances between budget forecasts and actual financial performance • Improvements in the agency’s projected financial outlook and reduced reliance on reserves
• Actions taken to manage deficits, including cost reductions, deferred hiring, and procurement adjustments
• Concerns about long-term reliance on the rate stabilization fund and deferred expenses
Ava Community Energy
Board of Directors Page | 3
• Importance of maintaining community support programs and bill credits while managing financial risk
5. (39:50) Overview of Contracts Entered Into (Informational Item) Brief follow-up to input from the Board upon the implementation of the latest Procurement Policy to discuss the details of the monthly Contracts Entered Into item.
Howard Chang reviewed Ava’s standardized contract reporting format in response to board feedback and recent procurement policy changes. He explained key fields included in the contract reports, such as vendor name, contract purpose, value, expiration date, and not-to-exceed amount.
There were no speakers for public comment.
Selection of topics discussed by subcommittee members:
• Clarity and functionality of the updated contract reporting format • Requests for more descriptive explanations of vendor services and contract scopes
• Distinction between contract amendments and first-time agreements in reporting descriptions
• Whether contract purpose provide sufficient context for board review • Where and when contract reports should be reviewed by the committee and full board
• Preference for maintaining a centralized contract reporting process through regular board agenda
6. (51:03) Committee Member and Staff Announcements including requests to place items on future Board Agendas
• Howard Chang announced that the March 25, 2026 FAP meeting may need to be rescheduled or canceled due to a potential scheduling and quorum conflict with a CalCCA event.
• Howard Chang announced the upcoming resilience hub workshop at Ava’s office, and highlighted strong community interest and participation.
7. Adjourned at 4:30pm.
The next Financial, Administrative and Procurement Subcommittee meeting will be held on Wednesday, March 25, 2026 at 3:30pm.
Altamont Conference Room
Ava Community Energy
1999 Harrison Street, Suite 2300
Oakland, CA 94612
Minutes written by Raïssa Ngoma.
1 ACCOUNTANTS’ COMPILATION REPORT
Board of Directors
Ava Community Energy Authority
Management is responsible for the accompanying financial statements of Ava Community Energy Authority (a California Joint Powers Authority) which comprise the statement of net position as of March 31, 2026, and the related statements of revenues, expenses, and changes in net position, and the statement of cash flows for the year to date and three months then ended in accordance with accounting principles generally accepted in the United States of America. We have performed a compilation engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. We did not audit or review the accompanying statements nor were we required to perform any procedures to verify the accuracy or completeness of the information provided by management. Accordingly, we do not express an opinion, conclusion, nor provide any assurance on these financial statements.
Management has elected to omit substantially all of the note disclosures required by accounting principles generally accepted in the United States of America in these interim financial statements.
Ava Community Energy’s annual audited financial statements include the note disclosures omitted from these interim statements. If the omitted disclosures were included in these financial statements, they might influence the user’s conclusions about the Authority’s financial position, results of operations, and cash flows. Accordingly, these financial statements are not designed for those who are not informed about such matters.
We are not independent with respect to the Ava Community Energy Authority because we performed certain accounting services that impaired our independence.
Maher Accountancy
San Rafael, CA
May 11, 2026
1101 Fifth Avenue, Suite 200 San Rafael, CA 94901 415 459 1249 mahercpa.com Current assets
Cash and cash equivalents - unrestricted 503,347,016$
Cash and cash equivalents - restricted 2,543,836
Accounts receivable, net of allowance 66,065,091
Accrued revenue 23,967,367
Other receivables 8,483,581
Prepaid expenses 5,896,907
Investments 17,852,415
Total current assets 628,156,213
Noncurrent assets
Deposits 992,749
Investments 329,563,117
Loans receivable 2,629,221
Capital assets, net of depreciation and amortization 23,395,196 Total noncurrent assets 356,580,283
Total assets 984,736,496
Current liabilities
Accrued cost of electricity 113,243,613
Accounts payable 4,760,109
Advances from grantors 2,543,836
Other accrued liabilities 2,685,137
User taxes and energy surcharges due to other governments 8,481,515 Lease liability 445,735
Security deposits - energy suppliers 4,183,100
Total current liabilities 136,343,045
Noncurrent liabilities
Lease liability 11,590,429
Total noncurrent liabilities 11,590,429
Total liabilities 147,933,474
Rate Stabilization Fund 188,014,795
Net investment in capital assets 10,460,782
Unrestricted 638,327,445
Total net position 648,788,227$
NET POSITION
AVA COMMUNITY ENERGY AUTHORITY
STATEMENT OF NET POSITION
As of March 31, 2026
ASSETS
LIABILITIES
DEFERRED INFLOWS OF RESOURCES
See accountants' compilation report. 2
Three Months Year-to-Date
OPERATING REVENUES
Electricity sales, net 149,431,243$ 737,308,746$
Grant revenue 107,344 1,168,639
Other operating revenues 2,064,182 3,952,009
Total operating revenues 151,602,769 742,429,394
OPERATING EXPENSES
Cost of electricity 180,940,821 616,094,809
Contract services 5,714,840 17,101,843
Staff compensation 6,708,614 18,587,665
Other operating expenses 4,502,221 11,960,464
Depreciation and amortization 274,366 814,871
Total operating expenses 198,140,862 664,559,652
Operating income (loss) (46,538,093) 77,869,742
NONOPERATING REVENUES (EXPENSES)
Investment income 4,544,443 17,738,138
Interest expense (236,140) (717,519)
Nonoperating revenues (expenses), net 4,308,303 17,020,619 CHANGE IN NET POSITION (42,229,790) 94,890,361
Net position at beginning of period 691,018,017 553,897,866 Net position at end of period 648,788,227$ 648,788,227$
AVA COMMUNITY ENERGY AUTHORITY
Nine Months Ended March 31, 2026
AND CHANGE IN NET POSITION
STATEMENT OF REVENUES, EXPENSES
See accountants' compilation report. 3
Three Months Year-to-Date
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 233,005,708$ 851,328,437$
Receipts from grantors 21,238 382,488
Receipts from wholesale sales and other operating receipts 6,792,474 13,439,918 Receipts of supplier security deposits - 31,044,287
Payments to suppliers for electricity (188,306,195) (655,099,256) Payments for other goods and services (8,625,690) (30,489,769) Payments for staff compensation (6,963,572) (18,400,115) Payments of deposits and collateral - (29,840,748)
Payments of taxes and surcharges to other governments (12,595,254) (31,812,032) Net cash provided by operating activities 23,328,709 130,553,210
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Lease payments (335,632) (559,387)
Purchases of capital assets (439,724) (2,008,064)
Net cash used by capital and related financing activities (775,356) (2,567,451)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales and maturities of investments 111,797,543 174,633,636 Investment income received 7,724,521 12,742,757
Loan principal received 16,415 25,342
Purchase of investments (116,826,128) (187,240,564)
Loan issued - (750,000)
Net cash provided (used) by investing activities 2,712,351 (588,829) Net change in cash and cash equivalents 25,265,704 127,396,930 Cash and cash equivalents at beginning of period 480,625,148 378,493,922 Cash and cash equivalents at end of period $ 505,890,852 $ 505,890,852 Reconciliation to the Statement of Net Position
Cash and cash equivalents - unrestricted 503,347,016$ 503,347,016$ Cash and cash equivalents - restricted 2,543,836 2,543,836 Cash and cash equivalents $ 505,890,852 $ 505,890,852
Nine Months Ended March 31, 2026
STATEMENT OF CASH FLOWS
AVA COMMUNITY ENERGY AUTHORITY
See accountants' compilation report. 4
RECONCILIATION OF OPERATING INCOME TO NET
CASH PROVIDED (USED) BY OPERATING ACTIVITIES
Three Months Year-to-Date
Operating income (loss) (46,538,093)$ 77,869,742$
Adjustments to reconcile operating income to net
cash provided (used) by operating activities
Depreciation and amortization expense 274,366 814,871
(Increase) decrease in:
Accounts receivable 45,853,336 26,581,710
Other receivables 1,577,651 (1,713,583)
Accrued revenue 30,034,540 37,209,891
Prepaid expenses 889,962 (696,052)
Deposits 95,706 (29,575,969)
Increase (decrease) in:
Accrued cost of electricity (2,982,007) (24,570,779)
Accounts payable (20,882) (2,206,100)
Other accrued liabilities (179,923) 117,479
Advances from grantors (86,107) (1,147,401)
Deferred revenue (517,914) 227,627
User taxes due to other governments (4,899,396) 26,277
Security deposits from energy suppliers (172,530) 29,225,717 Rate Stabilization Fund - 18,389,780
Net cash provided (used) by operating activities 23,328,709$ 130,553,210$
NONCASH INVESTING ACTIVITIES
Change in fair value of investments (3,240,852)$ 5,163,669$ Change in interest receivable 60,774$ (168,288)$
NONCASH CAPITAL FINANCING ACTIVITIES
Capital acquisitions included in accounts payable and other liabilities 681,213$ 898,250$ Nine Months Ended March 31, 2026
STATEMENT OF CASH FLOWS (Continued)
AVA COMMUNITY ENERGY AUTHORITY
See accountants' compilation report. 5
FY 25-26 Q3 Financial Highlights
Summary of financial statements:
• Cash balances increased by $97M or 24% compared to the same period last fiscal year. • Gross Accounts receivable (A/R) increased by 7.8% compared to the same period last fiscal year.
This is primarily due to new territories being added after March 31, 2025. While gross A/R increased, net A/R decreased by 7.7% due to the increase in our allowance for uncollectible accounts.
• Revenue increased by $49M or 7.1% compared to the same period last fiscal year. With electricity revenue increasing 8.4% or $57M compared to prior year. If we exclude the new territories added (Stockton and Lathrop), electricity revenue decreased by approximately $68M or 9.8% compared to same period last fiscal year.
• Gross margin is consistent year over year with cost of electricity at 83.6% of electricity revenue in current fiscal vs 83.9% in prior year.
• Overhead expenses increased 22.2% compared to same period last fiscal year. This is due to increased staff expenses (13 net new hires after 3/31/25) and program incentives related to new programs going live (Bike Electric and Smart Home Battery). 2 Finance Updates:
• We are transitioning our bill payment platform from Bill.com to Ramp on July 1st. Ramp provides better controls and visibility into spend across credit cards, expense reimbursements, and vendor payments. It incorporates procurements and budgets into the approval process to ensure that expenses are aligned with budget and contracts prior to approval
• We are building a Google Form for Board members to submit expense reimbursements and attach receipts to streamline the process. This should be live by December.
• We have begun recruiting for a Sr Associate, Accounting & Finance to help with Local Development reporting, Prepay tracking, and treasury reporting. We hope to have this person onboarded by end of June. This is a replacement role.
3 Energy Prepayment Financing Overview
2 • IRS Regulations codified in 2005 allow for tax-exempt debt to be issued for the prepayment of electricity to serve load.
• Tax-exempt debt (issued by CCCFA) provides a lower cost of funding than energy prepay financing participants would be able to receive by issuing taxable debt or internal funding. • Bond investor risk is tied to the energy prepay funding recipient (not Ava), and their ability to pay debt service and redeem bonds in event of default on the bonds. • Ava enters 30-year energy supply agreements, commits to purchasing a fixed volume of energy during that period, and receive a fixed $/MWh discount to the market energy price. • Objective: Prepay transactions enable Ava to lower its cost of energy on existing and future energy contracts through the discount and enable a customer value proposition into the future.
Goal: Reduce the cost of public power purchases by monetizing tax-exempt debt.
Energy Prepayment Transaction Diagram
3 1. Bond Issuance: CCCFA issues the Bonds to
fund the prepayment.
2. Prepayment: CCCFA applies bond proceeds
to prepay Energy Supplier for 30 years of
energy deliveries.
3. Commodity swap: Energy Supplier enters
swap transaction at fixed price.
4. CCCFA commodity swap: CCCFA enters
commodity swap at same fixed price to de-risk variability of debt service.
5. Ava: Ava enters energy supply contract to
buy energy delivered by Energy Supplier at a
fixed discount to Ava’s energy contracts.
6. Funding Agreement: Energy Supplier
finances bond proceeds with third-party
funding recipient to enhance savings
potential.
7. Assigned PPAs: Ava assigns its existing and
future PPAs to Energy Supplier through a
custodial account. Energy Supplier
contributes pays and take title to underlying
PPA energy.
Ava
Energy Supplier
Affiliate
2026 Prepay Financing Plans
Staff will be seeking approval for two-three transactions by the Board in June o Similar to last year, each would be authorized for up to $1.25 billion, but will likely be approx. $1 billion, similar to prior deals
o We plan to propose using Morgan Stanley and Goldman Sachs as underwriter and supplier for one transaction each; staff evaluating using a third bank (RBC/JP Morgan/Citadel among others) for another ▪ Further optimizes each related PPA pool of resources with the existing banks ▪ Using a third bank further diversifies Ava counterparty risk o Staff will seek Green Bond designation for all transactions o Transactions would occur after approvals by Ava and CCCFA boards in June, subject to market conditions o Selection of funding recipient will occur after approvals; Ava will seek Bond Ratings shortly after in preparation for each bond sale
4 May FAP
June
ExComm
June Ava
Board
June CCCFA
Board
Receive
Ratings/Mail POS
Price and Close
Prepay transactions
June 1 July 1 Aug - January
Summary Table by Transaction
5 CCCFA 2021B CCCFA 2022A CCCFA 2023E CCCFA 2025C CCCFA 2025E Total Project Participant(s) Ava & SVCE Ava Ava Ava Ava N/A
Initial Bond Principal
Amount $1,234,720,000 $931,120,000 $997,895,000 $1,004,395,000 $960,730,000 $5,128,860,000 Delivery Period Start
Date 1/1/2022 4/1/2023 1/1/2024 11/1/2025 4/1/2026 N/A
Bond Refinancing Date 8/1/2031 8/1/2028 3/1/2031 10/1/2033 5/1/2035 N/A Total Discount to Ava
($/MWh) $4.28 $7.46 $12.66 $10.85 $13.30 $9.55/MWh
Initial Period Savings
($M) $21.4M $26.8M $49.6M $47.1M $56.5M $201.5M
Initial Period Energy
Delivery (MWh) 5.0MM 3.59MM 3.92MM 4.34MM 4.25M 21.1M
# of Ava PPAs Currently
Assigned2 2.5 2.5 2 1 2 10
Ava’s transactions to date have resulted in over $5.1B in CCCFA bond issuances, with $/MWh discounts improving in more recent transactions driven largely by market conditions.
2 Where a decimal is present, certain Ava PPAs have energy volume allocated on a pro rata basis across multiple prepayment transactions.
Ava Energy Prepay Savings by Transaction
6 • Ava’s initial five prepay
transactions are expected to
provide $201.5M in energy savings
over the initial bond periods.
• Average savings discount:
$9.55/MWh across ~21.1 TWh of
Ava energy procured through 2035.
• Annual savings of >$20M per year
from 2026-2030 from the five
existing prepays $-
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Ava Annual Energy Savings1from Existing Prepay Transactions ($M) CCCFA 2021B CCCFA 2022A CCCFA 2023E CCCFA 2025C CCCFA 2025E 1 Annual savings above reflect total expected energy discount received by Ava through the respective bond refinancing date.
Note: the savings decline in later years (2031-2035) above is a function of Ava’s existing transactions reaching their refinancing date on a rolling basis. At refinancing, Ava would issue a new bond and receive a new $/MWh discount for the duration of the bond.
Prepay Structure Risks
7 Risk Description Mitigation
Market risks Macro factors (Iran, inflation, Fed rate decisions, etc.) may impact bond pricing and Ava savings potential of energy prepayment transactions.
Ava and PFM to coordinate closely with underwriters
on market timing to optimize execution.
Refinancing risk • Initital prepay bond savings periods are typically 5-10 years. • Each transaction must be re-financed at that time
• Future savings are subject to decrease/increased based on market conditions at refinancing.
• Energy prepayment transaction volume has meaningfully increased in past few years, so the refinancing market will have a higher supply in the coming years.
Ava to assess opportunities to stagger Ava transaction
refinancing dates to de-risk market and interest rate
conditions at re-financing.
Issuing transactions in 2026 may result in higher
savings than future years when new issuances
may compete with refinancings for the same bond
purchaser pool.
Load loss risk Material inability by Ava to deliver contracted MWh in future years may lead to loss of energy discount.
Ava limits its prepay-committed power relative to its
long-term load forecast. After Prepays #6 & 7,
approximately 49 % of Ava’s future load will be
committed to prepays.
Out of pocket costs Requires staff time to execute & manage; ratings agency and green bond fees are paid regardless of transaction’s success.
Fees are greatly outweighed by the savings potential.
Tax / regulatory risk Changes in tax law or RPS standards may impact energy prepayment transactions in the future and potentially cause existing deals to unwind.
Limited ability to mitigate.
Ava Planning Risk - Loss of discounted power would place some future budgetary pressure on Ava Prepaid Energy Refinancing Risk
8 Over $95.6B of prepaid energy financings are coming due for refinancing by 2036, which may result in pressure on future bond pricing, energy discounts, and market access.
Potential for Future Prepay Transactions
9 • Under tax guidance, Ava’s aggregate load committed to all energy prepayment transactions should not exceed 80% of total expected load in any given year.
• Through 5 transactions: 34% of Ava’s forecasted load is committed to energy prepayments in peak years.
• After Prepays #6 & 7, 49% of Ava’s forecasted load will be committed across all transactions.
• Following Prepay #7, Ava expects to have load capacity headroom for 2-4 additional prepayment transactions. This is subject to change based on actual volume commitments in forthcoming transaction and will be reviewed over time
against Ava's long-term load forecast.
Energy prepayment load commitments as
% of Ava's expected load3
34.3%
14.5%
31.1%
20.0%
Prepay #1-5 volume
Expected Prepay #6 & 7
volume
Headroom for future
transactions
Reserved per tax guidance
3Percentages in chart reflect expected volumes for
calendar year 2051, which is the peak aggregate
volume commitment for Ava's existing energy
prepayment transactions.
Fiscal Year 2026-2027
Draft Budget
Howard Chang, CEO | May 27, 2026
Introduction
2 • Every year in June, Ava Board of Directors (the “Board”) approves the following fiscal year’s budget • This draft budget was reviewed by an ad hoc group of the Ex Comm on 5/6 and Board on 5/20. It will be further reviewed by Ex Comm (6/3) with approval scheduled for the meeting on June 17th. • The Budget covers the overall categories of the General Operating Fund:
▪ Revenues from Operations
▪ Energy Operating Expenses (typically 90%+ of total 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 • PG&E issued an updated ERRA filing on May 15 that materially altered the forecast in this presentation and was updated on 5/20, after the first review by ExComm ▪ Staff may consider delaying the first review of the budget draft to post May ERRA filing in future years Current Fiscal Year 2025-2026 Performance
• Details on “Actuals” are settlements through March and updated projections through June.
• Revenue is expected to settle above budget due to Board action on value proposition in December.
▪ Other Operating Revenue is primarily fees and damages to Ava on energy contracts
• Cost of energy is coming in below expectations as
market prices softened and higher than expected large
hydro generation
• Total overhead is currently estimated at $6.5MM below budget due to opex reductions
• Non-operating activity is higher than expected as interest rates remain higher-for-longer and with the reduction of Local Development contributions
▪ Borrowing interest expenses have been moved to General & Administrative overhead due to accounting treatment
changes
• Overall Net Revenues are expected to come in at $83MM above estimates without using $35MM budgeted GASB
62 funds.
3 Fiscal Year 2026-2027 Draft Budget
4 Draft Budget Fiscal Year 2026-2027
• Revenues: Energy prices continue to soften, and with the resolution of Track 1 Ava’s effective PCIA is lowering while PG&E’s rates are increasing due to persistent costs in their portfolio
• Cost of Energy: Lower energy prices reduce open position costs
• Overhead: Increase in G&A is predominantly due to
increased rent, a change in accounting treatment of credit facility fees, and increasing software costs
• Non-Operating Activity: Higher interest income and lower borrowing interest due to a change in accounting
treatment of credit facility. No incremental contributions to Local Development Funding in fiscal year 2026-2 with
current fund balance at $83.6MM
5 Expanded budget view shown in appendix
Draft Budget: Forecast Uncertainty
• May 15, 2026 ERRA filing provided a year-to-date update on a subset of the underlying assumptions that generate the PCIA and rates, but did not provide updated MPBs. Assumptions require additional diligence and validation. This is separate from potential changes that may come from the General Rate Case (GRC) • PCIA Tracks 2 and 3 may have material impacts on PCIA and rate setting methodologies. Track 3 scope and timing presents the greatest uncertainty. 3 pre-scoping workshops have been scheduled for June. • Load forecast uncertainty:
▪ Weather conditions present the greatest impact on actualized load volume and shape ▪ With the addition of SJC, estimates will become more accurate as Ava receives more data beyond initial enrollment ▪ Longer-term: data center and electrification presents significant uncertainty as well • New power generation project online dates may be delayed or moved forward impacting power portfolio expenses
• Energy prices are highly volatile and currently softening in response to a mild winter, accelerated melting snowpack, and new energy capacity coming online.
▪ While forecasted summer prices are softening, actuals may vary greatly based on temperatures and demand • Opaque portfolios with the IOU could lead to materially different MPBs in the October ERRA filing • Interest rates and macroeconomic environment may change 6 May ERRA Addendum Filings
• The May 15 ERRA filing consists of the filing documents and the series of datasets called the “Working Papers”
▪ The filing and working papers can be accessed through the PG&E Azure website here:
https://pgera.azurewebsites.net/Regulation/search
• Select the “ERRA 2027 PGE – Forecase [A.25-05-007]” case from the dropdown menu and click search to see all documents available for download
• Staff is still processing the working papers with consultants to get better color on the details
7 • What is known:
• 2025 RA PCIA reform is in place at a steady state for 2027 • Load appears to be materially lower for PG&E due to milder than expected weather to date and community load departure
• PG&E's revenue requirements remain stable despite the reduction in load, increasing generation rates • What is not known from the ERRA:
• Direction on MPB settlement for all attributes
• A significant portion of the filing is redacted due to market sensitive confidential information and our 3rd party consultant has access to this information, which may be shared on a very limited basis • There were some known errors/inconsistencies that are in the process of being validated and reconciled PCIA & Operating Headroom
8 • Ava’s generation rates to customers are indexed to PG&E’s generation rate • A portion of the generation cost is a charge from PG&E for the Power Charge Indifference Adjustment (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 following year’s rates
• PCIA and rates are "trued up" from forecast to actual, and any over-collection 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 Portfolio
Costs
Portfolio
Value*
Stranded
Costs/credit
*Value calculated using “Market
Price Benchmarks” (MPBs)
PCIA Proceeding & Risk Elements
The CPUC has an ongoing proceeding regarding the PCIA, divided into "Tracks". o Track 1
o CalCCA has appealed CPUC Track 1 decision; appeal is pending o Revised the MPB for RA retroactive through 2025
o Major driver for the much higher PCIA most Ava customers see in 2026 versus 2025 o Track 2
o Proceeding is ongoing; decision expected in time for inclusion in 2027 rates o The CPUC is reviewing the methodology for valuing RECs that PG&E "banked" prior to 2019 but did not actually use for compliance purposes until 2025. An interim methodology values those RECs at $0. This increases the PCIA for most Ava customers versus what the PCIA would be if those RECs were valued at the current market price for RECs
o Outcome indeterminate; CalCCA proposal would use current market prices for REC value, and lower the PCIA for most Ava customers versus status quo; PG&E proposal would make the status quo interim methodology permanent o Track 3
o Scope and timing undetermined
▪ CCAs propose to address reviewing the Track One revisions to MPBs; aligning the RA MPB with the RA Slice of Day framework; revintaging of PCIA resources; PCIA GHG-free methodology; and potentially other structural changes to the PCIA ▪ IOUs propose to prioritize changes to RPS MPBs ahead of any other issues, with changes to the brown power MPB next o Outcome indeterminate; CCA approach would likely reduce PCIA for most Ava customers if adopted while the IOU approach would likely raise the PCIA for most Ava customers if adopted 9 Electricity Product Load & Rates
• Renewable 100:
• Originally set at $0.01/kWh above PG&E and has migrated down as Ava financials improved • Currently priced at $0.0175/kWh above PG&E rates
• Bright Choice:
• Originally set at 1.5% discount to PG&E, reduced to a 1% discount in 2021,increased to a 3% discount in 2022, increased to 5% discount to PG&E rates in 2023. Latest adjustment was to 0.5% discount to PG&E in January of 2026
• The percent load of Bright Choice customers is estimated at ~66% for FY 2027 10 0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0 1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
9,000,000
10,000,000
2023 2024 2025 2026 2027
BC%
Retail MWh
Bright Choice as Percent of Retail Load by Fiscal Year
BC-Res BC-C&I R100-Res R100-C&I BC%
• Growth in Bright Choice in FY 2026 is
due to unincorporated SJC
• Growth in Renewable 100 in FY 2027
is due to Fremont opt up
• Annual load and load shape can
vary materially year to year and
between budget to actuals due to
weather, individual customer usage,
and expansion to new territories
Brown Power Energy Price Volatility
11 • Brown power prices are set by a number of
factors impacting supply and demand, such
weather, natural gas prices, system capacity,
transmission congestion, etc.
• Volatility is high due to these uncertain and
changing factors year to year
• Customer rates (generation and PCIA) are set
based on a forecast while also incorporating a
true up of the prior year's forecasted market
prices with actualized prices
• 2026 rates were set by and 2026 forecasted
prices and truing up 2025 actualized prices.
2027 rates will be set by 2027 forecasted
prices and truing up 2026 actualized prices.
12 Market Price Benchmark Trends 2020-2027
• Forecast MPBs used to develop PCIA and generation rates are calculated in Sept each year:
o Energy: Avg forward price during Sept for delivery the following year o REC: Avg executed contract price in the past 15 months for delivery in following year
o RA: Avg executed contract price in the past 3 years for delivery the following year
• Forecasted vs. Final MPBs vary significantly, reflecting year to year market volatility
• RA MPB in 2025 reflects regulatory changes, no future PCIA reform is assumed in forecasts
• "Final" numbers in 2026 reflect actuals through March and updated forecast as of April
RA Market Price Benchmark
Brown Power Market Price Benchmark
RPS Adder
13 Historical Generation Rates & PCIA
• Rates increased and PCIA decreased from 2022 to 2025, driven by forecasted increases in energy market prices • Since 2025 energy costs have softened in addition to substantive PCIA reform, setting PCIA higher and rates lower in 2026
• Lower prices are expected to continue through 2026 and we are forecasting a modest increase to generation rates and a lower PCIA in 2027, though rates remain stable ▪ Between calendar year 2025 and 2026, customer rates dropped 20%, and between 2026 and 2027 Ava is estimating rates will increase 2.2% (inclusive of PCIA)
▪ Between fiscal year 2025 and 2026, customer rates dropped 2%, and between 2026 and 2027, rates are expected to drop another 12%
13 0.081 0.080 0.066
0.113
0.137 0.141 0.139
0.085 0.094
0.029 0.032
0.043
0.024
0.004 0.010 0.004
0.033 0.027
0.016 0.016
0.003
0.022
0.038 0.035
0.025
-0.011
0.005
-0.04
-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 2027-Base
$/kWh
Calendar Year
Customer Rate Revenue Profile
Ava Average Rates PCIA Fees Operating Expenses Margin
0.078 0.082 0.072 0.083
0.132 0.145
0.129
0.114
0.088
0.026 0.030 0.038
0.037
0.012
0.006
0.006
0.019
0.030
0.017 0.018
0.008 0.011
0.029
0.039
0.016 0.014
-0.001 -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 2027-Base
$/kWh
Fiscal Year
Customer Rate Revenue Profile
Ava Average Rates PCIA Fees Operating Expenses Margin
Draft Budget: Revenues
• Despite higher load, revenue from electricity sales is expected to decrease for the fiscal year with Ava's generation rates declining ~23%
• Value proposition remains unchanged at 0.5% discount to PG&E for Bright Choice and a $0.0175 premium on Renewable 100 products
• Estimated bad debt slightly increased from 1.0% to 1.25% of billings based on rising trends and getting ahead of possible inflation increases due to oil market volatility • Recognition of GASB 62 deferred revenue is not from the Rate Stabilization Fund but is half of the amount deferred from resolution R-2024-26, which allocated $10,504,837 to local, incremental generation and capacity from the 2023 RFO for projects starting in 2027 14 Draft Budget: Base Case Revenue Assumptions
• Base Case Assumptions have MPB’s for calendar year 2026 down to align with market actuals and forwards year to date
• Forward looking prices in cost of energy reflect market price assumptions • In addition to MPB assumptions, revenue requirement inputs directly from PG&E are critical in determining generation rates
o In May ERRA filing, PG&E's revenue requirement stayed relatively flat despite declining load in 2027, which needs further diligence
15 FY 2026-2027 Scenarios & Sensitivities
16 Ava looked at possible alternative MPB/revenue scenarios —High-End and Low-End • High-end: calendar year 2026 prices end up as current MPB forecasts from May ERRA filings, which are unchanged from the October ERRA filing
• Low-end: calendar year 2026 prices are one standard deviation down from current forward averages for brown power and Ava’s base case RPS and RA estimates • There is upward pressure on rates based on PG&E's request for increase in revenue requirement in their GRC filing that is anticipated, but unlikely to be implemented in the 2026-27 fiscal year MPBs 2026 2027 2026 2027 2026 2027
Power 34.09 42.66 23.70 33.28 40.90 47.61
RPS 40.00 36.92 40.00 36.92 62.45 62.45
RA 10.00 10.00 10.00 10.00 11.53 11.53
Base Case Low End High End Base Case Low End High End
Revenues 784,400,000 728,994,000 900,593,000
Cost of Energy 780,192,000 761,022,000 843,483,000
Overhead 53,561,000 53,561,000 53,561,000
Net Non-Op 24,306,000 15,988,000 23,684,000
Net Revenues (25,047,000) (69,601,000) 27,233,000
Draft Budget: Overview of Operating Expenses
17 Expenses are divided into three overall cost center
categories:
• Energy Operations which includes all energy, energy
attributes, ancillary related costs and required
management services such as scheduling, data
management, and customer billing
• This category comprises 93.5% 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 6.5% of total operating expenses
• Non-Operating Expenses which are all capital and
capital transfer related costs, including Local
Development Fund contributions. This category is
presented and discussed in a later slide
Draft Budget: Energy Operations
18 Energy Costs
• Costs are generally derived from a blend
of contracted and open position for all
energy attributes
▪ Currently, renewables, carbon free, and RA
are fully procured
▪ Open prices are non-stressed, mean
forecasted
▪ Material increase in PPAs due to reduced
revenue expectations from lower market
prices
PPAs Hedges Open Resource
Adequacy
RECs Carbon Free Transaction
Costs
Other
Fiscal Year Cost of Energy Budget by Attribute
2022 2023 2024 2025 2026 2027
Draft Budget: Renewable & Large Hydro Content
19 • In April 2022, the Board approved the “Path to
Zero by 2030” plan for the Bright Choice
product, as shown in the table to the left
• Periodically, the Board has approved adjusting
targets to fit Ava’s financial position, typically
raising targets
• In December 2025, the Board approved a
compliance period approach across multiple
years instead of single year targets specifically
This table shows where Ava currently stands
with procurement relative to the compliance
period, and annual, targets
Year Renewables Lg. Hydro Total Renewables Lg. Hydro Total Long/Short 2024 52.0% 29.0% 81.0% 62.0% 33.7% 95.6% 14.6%
2025 56.0% 25.0% 81.0% 56.5% 37.6% 94.1% 13.1%
2026 55.6% 21.0% 76.6% 54.7% 18.0% 72.7% -3.9%
2027 64.0% 21.0% 85.0% 58.4% 12.3% 70.8% -14.3%
Period* 57.3% 23.7% 80.9% 57.9% 25.4% 83.3% 2.4%
* Load Weighted
Annual Targets Actuals/Forecast
Draft Budget: Fiscal Year Personnel Details
• FY 2026 Budget was set for 7 additional FTE (105 total) to build more depth and to continue addressing increased workflow in key areas to help scale operations further. ▪ Ava is not filling 2 roles bringing the forecasted end of FY 2026 FTE to 103. • FY 2027 Budget seeks to add 5 FTE (108 total) to provide added expertise and support in key areas and help to meet essential business needs.
▪ 1) Contract Management Analyst 2) Finance Manager / Staff Accountant 3) Contract / Settlements Analyst ▪ 4) Optimization Software Engineer 5) Data Analyst
• Compensation Adjustments:
▪ COLA: 3%; Promotions/Wage Adjustments: 3%; AIP Compensation: 12% ▪ Accounting for increased healthcare premiums and associated benefit costs (realized and expected) • Change to benefits reflects some recategorization of expenses from Salaries & Wages to Health Care/Benefits 20 Public Hearing - AB 2561: Ava FY 25-26 YTD
21 FY 2025 - 2026 Budgeted Headcount
Total Active FTE
Budgeted 105
New FTE Budgeted 7
New FTE Filled to date 5
Average Time to Hire 67 Days
Vacancy Rate 29%
Retention Rate 95%
Average Turnover Rate 5%
*For recruitment, only new budgeted positions are included. This does not account for other roles, like backfill positions.
*Reporting Period: FY 25-26; July ‘25 - April ‘26 (YTD at time of report) *Average Time to Hire: Days from role posted to start date. *FTE: Full-time employee; YTD: Year-to-date
Ava has a strong retention rate of 95%, with only 5
terminations so far this year.
Hiring Decision: Ava elected not to fill 2 positions this FY, bringing the total budgeted FTE down to 103.
Challenges faced in hiring:
• Finding a great fit can take time, but it’s worth it. ▪ We are prudent in our hiring process, strategically
planning the timing of hiring, carefully considering all aspects of the role and desired impact.
• Competition for talent is high, especially in the Bay Area What helps us overcome challenges?
• A strategic and robust hiring approach
• Ava is mission-driven & a certified Great Place to Work! This slide and data presented ensure compliance to AB 2561, which requires local public agencies to present the status of vacancies and recruitment and retention efforts at a public hearing before the governing board of the local agency at least once per fiscal year.
Draft Budget: Marketing & Communications
22 FY 2027 Summary of Adjustments:
• Continued notifications to unincorporated San Joaquin County solar customers • Customer mailings for Fremont commercial Renewable 100 transition • Investment to a brand awareness strategy and launch phase one of a multi-year awareness initiative • Investment in sponsorships, fellow, partners to activate more robust community engagement Draft Budget: Legal, Policy, & Regulatory Affairs
23 FY 2027 Summary of Adjustments
Legal:
• Litigation counsel: funding to cover active litigation; litigation readiness; other potential disputes
• Commercial counsel: all procurement activities other than power resources • Software and implementation: Legal research resources; contract platform Phase 3 rollout Policy and Regulatory Affairs
• Federal and state lobbyists
• Consultants for compliance and CAISO matters
• Potential AI services
Draft Budget: Professional Services
24 FY 2027 Summary of Adjustments:
• Technology Consultants: Expanding operations requires additional engineering and CRM structure and design support
• Other Services: Primarily reflects temporary consultants and contractors, which was recategorized and consolidated this year
Draft Budget: General & Administrative
25 FY 2027 Summary of Adjustments:
• Operational Expenses: Increase is primarily due
to accounting change for fees with line of credit
• Memberships Dues & Sponsorships: Costs
associated with JPAs, trade associations, and
industry associations (CalCCA, CCCFA, CCPower,
CFEE, Veloz, etc.)
• Software & Subscriptions: Increases to cover
additional software needs for IT, Power Resources,
and EAS data and increased cyber security needs
• Rent & Utilities: Increase due to initation of
primary lease agreement from a sub-lease
agreement and no longer receiving TI related
allowance
• HR & Recruiting: Some increase in recruiting costs
for placing temporary consultants
• Board & Director Fees: These are reduced to more
closely align with Board practices of requesting
stipends
Draft Budget: Non-Operating Activity
26 Non-Operating Revenue
• Interest Income: Reflects “higher-for-longer”
FED interest rate policy and expected balance
drawdowns
▪ Rates are estimated to hold at 3.5%
• Other Non-Operating Revenue: is expected
income AT&T tower rent at the 8th Street building
Non-Operating Expenses
• Borrowing Interest: reduced due to changes in
line of credit accounting
• Capital Expenditures: costs estimated for
general improvements at 1999 Harrison St
offices
• Local Development: no planned incremental
contributions in light of the current fund balance
and future planning work that is underway
Draft Budget: Local Development Fund Balance*
27 Program Area Balance Earmarked
Local Development $2,800,000 $2,6000,000
BE+EE
Building Electrification $14,600,000 $8,500,000
Building Efficiency Accelerator $1,300,000 $1,000,000
TE
Vehicle Electrification $8,100,000 $4,500,000
Ava Charge $15,900,000 $15,900,000
Bike Electric $2,200,000 $2,200,000
SmartHome Charging $5,700,000 $1,700,000
Resilience
Critical Municipal Facilities (CMF) $5,800,000 $5,800,000 SmartHome Battery $10,900,000 $10,900,000
Resiliency Hubs $5,600,000 $5,600,000
BE+TE Virtual Power Plant DERMS Platform $1,900,000 $1,900,000 Grants Community Investment Grants $8,800,000 $8,800,000 Total $83,600,000 $69,400,000
Local Development Fund Reconciliation Board Item from March 2025 *Fund balance as of 1/31/26 Local Development – FY27 anticipated spend
28 Program Area FY '27 Spend Committed FY'27 Activities Program Roadmap $500,000 $500,000 Local Development Programs Roadmap Ava Charge $2,640,000 $6,750,000 Development, Operations and Marketing for 5 Sites Critical Municipal Facilities $2,000,000 N/A - 25 yr PPA Complete Projects, Establish operating reserves, bill customers
Grants $600,000 $1,900,000 Issue new solicitation, select at least three grantees and Payments for contracted grants
SmartHome Battery
incentives $1,250,000 $10,900,000 Upfront and ongoing payments for SHB Resilience Hub
TA/Incentives $1,500,000 $5,600,000 Upfront incentives and Technical Assistance costs Building Efficiency
Accelerator $1,000,000 $1,000,000 Incentives for Commercial Heat Pump Water Heaters Ava Bike Electric incentives $2,200,000 $2,200,000 Bike Electric will add $4M from ACTC Ava SmartHome Charging
incentives $300,000 $600,000 Enrollment incentives and VPP dispatch payment for SmartHome Charging program Total $11,990,000 $29,450,000
Draft Budget: Deferred Revenues & Reserve Funds
29 • Current reserve fund balance
covers 40.1% of projected
operating expenses for FY 2027
• Current FY surplus estimate of
$83MM not included in
balances
• Staff will bring
recommendations for
allocation of the surplus to the
Board after completion of the
annual audit in November
• Budget includes a release of
$5.2MM, equal to 50% of the
deferred revenues related to
Clean Energy Investments
Deferred Revenue Usage Balance Guidance
Rate Stabilization Fund 162,546,828
R-2025-23 authorizes recognition of ~$35MM to balance FY25-26 budget R-2025-41 authorizes conversions from previous budget deferrals R-2025-42 & R-2025-51 authorizes RSF funding allocations Clean Energy Investments 10,504,837
R-2023-37 authorizes deferral for specified use.
R-2024-26 authorizes recognition in 2027
Contribution Year Contribution Withdraws Balance Operating Expenses* OpEx Year PctCoverage 2018-2019 40,513,687 - 40,513,687 410,686,000 FY 2019-2020 9.9% 2019-2020 49,704,640 - 90,218,327 383,045,000 FY 2020-2021 23.6% 2020-2021 - - 90,218,327 471,897,000 FY 2021-2022 19.1% 2021-2022 65,655,073 - 155,873,400 562,667,000 FY 2022-2023 27.7% 2022-2023 75,000,000 - 230,873,400 732,885,000 FY 2023-2024 31.5% 2023-2024 100,000,000 - 330,873,400 814,123,000 FY 2024-2025 40.6% 2024-2025 - - 330,873,400 899,393,000 FY 2025-2026 36.8% 2025-2026** - - 330,873,400 833,753,000 FY 2026-2027 39.7% *Operating Expenses are fiscal year ahead for coverage purposes: 2025-26 contribution year aligns with 2026-2027 OpEx **Expected contribution with current policy as of 5/6/2026 Note: If $0 are contributed from 2025-2026 surplus, the balance of $330.9MM is 39.7% of FY 2026-27 OpEx 5 -Year Forecast
30 • The reliability of any 5-year revenue
forecast is limited due to poor visibility
into key PG&E inputs, such as revenue
requirements and load
• This forecast shows a 5-year forecast
with no meaningful changes to PG&E
revenue requirements, regulatory
reform, and market prices. o Actuals will vary based on potential known and unknown changes
• Forecast Assumptions: o No material changes to rate setting and PCIA regulatory methodologies
o No change to current value proposition o Markets perform at non-stressed, mean expected prices
o Cost of energy services increases at
historical account growth rate
o Overhead increases at rate of inflation o Interest rates persist at 3.5% Draft Budget: Next Steps & Expected Updates
• Staff to incorporate additional diligence and updates based on the recent May ERRA filing • Additional review by Ex Comm (6/3)
• Final delivery to Board (6/17) for approval
• Further review with the board mid-year to account for 2026 actuals and final 2027 rate setting o PG&E's October ERRA filing will provide a meaningful update • To the extent the budget forecast materially changes following the October ERRA filing and AET, staff will consider mid-year budget adjustments as needed Note: These budget scenarios are indicative and will change based on energy market conditions, developments in CPUC proceedings, and updates to PG&E ERRA and GRC filings Staff is seeking feedback on any matters in preparation for June board approval 31 Appendix A: FY 2026-2027 Draft Budget Expanded View
32