Policy Board of Directors
Wednesday, June 15, 2022
9:00 AM
Central Coast Community Energy
70 Garden Court, Suite 300
Monterey, CA 93940
IMPORTANT NOTICE REGARDING COVID-19 MEETING REQUIREMENTS The special procedures in place to minimize the spread of the COVID-19 virus may supersede general meeting procedures and delay distribution of materials to members, although every effort will be made to ensure comments and materials received prior to the meeting end will be made part of the record.
Based on guidance from the California Department of Public Health and the California Governor’s Office, in order to minimize the spread of the COVID-19 virus, please do the following:
1. You are strongly encouraged to observe the live stream of the CCCE Policy Board of Director’s meeting at: https://3cenergy.hylandcloud.com/203agendaonline/Meetings/Search?dropid=4
2. The CCCE Board Room remains open. If you attend the CCCE Policy Board of Director’s meeting in person:
a. You will be required to (i) wear a mask during the meeting and (ii) maintain appropriate social distancing, i.e., maintain a 6-foot distance between yourself and other individuals. b. Additional seating with audio of the CCCE Policy Board of Director’s meeting will be available in the CCCE Main Conference Room, located at 70 Garden Court, Suite 300, Monterey, CA 93940. 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 Heather Vowell, Board Clerk, at 831-641-7216 or [email protected]. Requests should be made as soon as possible but at least 72 hours prior to the scheduled meeting.
3. If you choose not to attend the CCCE Policy Board of Director’s meeting but wish to make a comment on a specific agenda item, you may please submit your comment as set out below. The timing of public comment shall be at the discretion of the Chair. Options for public comment are as follows:
a. To have your comments distributed to the Board prior to the meeting submit your comment via email by 5:00 p.m. on the Tuesday before the meeting. All comments received after 5:00pm on the Tuesday before the meeting will be retained as part of the record and distributed to the Board after the meeting. Please submit your comment to the Clerk of the Board at [email protected]. To assist the Clerk in identifying the agenda item relating to your public comment please indicate in the Subject Line, the meeting body (i.e., Policy Board Agenda) and item number (i.e., Item No. 3).
You may participate through ZOOM. For ZOOM participation please join by computer audio at:
https://us02web.zoom.us/s/82977357049
OR the following phone number(s):
US: +1 669 900 6833 or +1 669 219 2599
Enter this Meeting ID number: 829 7735 7049 when prompted. Please note there is no Participant Code, you will just hit # again after the recording prompts you.
You will be placed in the meeting as an attendee; when you are ready to make a public comment if joined by computer audio, please Raise your Hand; and by phone please push *9 on your keypad.
If you have anything that you wish to be distributed to the Board, please provide 15 copies and hand them to a member of CCCE staff or Heather Vowell, Board Clerk, who will distribute the information to the Board members and other staff.
The public may comment on a specific item listed on this agenda when the Board considers that item. In addition, the members of the public may request and receive copies without undue delay of any documents that are distributed to the Board, unless there is a specific exemption under the Public Records Act that prevents the disclosure of the record. (Cal. Gov’t Code Section 54957.5) In compliance with Government Code Section 54957.5, non-exempt writings that are distributed to a majority or all of the Board in advance of a meeting and that relate to an agenda item will be made available at CCCE’s offices located at 70 Garden Court, Suite 300, Monterey, CA 93940 during normal business hours and are also available on the CCCE website located at:
https://3cenergy.hylandcloud.com/203agendaonline
AGENDA
Amended
June 9, 2022
. Welcome & Roll Call
. Pledge of Allegiance
. Public Comment on Matters Not Listed on the Agenda
The public may provide comments on any item within the Board's jurisdiction but not on the Agenda. The Board may not take action at this meeting on any item not listed on the Agenda other than to refer the matter to staff or set if for a future meeting. Speakers are limited to 3 minutes each.
. Corrections and Additions
Clerk will announce agenda corrections and proposed additions, which will be acted on by the Board as provided in Sections 54954.2 of the California Government Code.
PRESENTATION
1. Receive Presentation on 2017-2021 Impact Report (Presentation)
2. Receive Presentation and Approve CCCE's Finance Strategic Initiatives and Direct the CEO to take Necessary Steps to Implement the Strategic Initiatives (Presentation)
CONSENT AGENDA
3. Approve Minutes from the February 16, 2022 Meeting of the Policy Board (Action Item)
4. Consider Finding, Pursuant to AB 361 and in order for the Policy Board of Directors to Continue Meeting Remotely, that the COVID-19 Pandemic State of Emergency Declared by Governor Newsom is Still In Effect; The Policy Board of Directors has Reconsidered the Circumstances of the State of Emergency; and the Monterey County Health Officer Continues to Recommend Social Distancing Measures for Meetings of Legislative Bodies (Action Item)
5. Appoint Jaya Bajpai as CCCE's Treasurer (Action Item)
6. Adopt the Financial Statements for the Fiscal Year 2020/2021 as prepared by CCCE and Maher Accountancy, Inc. (Action Item)
7. Support and Direct CEO to take Necessary Steps to Prepare a PPA Pre-Pay Bond Issuance through California Community Choice Financing Authority (Action Item)
8. Approve Underserved Communities Outreach and Engagement Plan (Action Item)
9. Quarterly Regulatory and Legislative Report (Information Only)
10. Treasurer's Report (Information Only)
REGULAR AGENDA
11. Community Advisory Council's Report (Discussion Item)
12. Operations Board of Director's Report (Discussion Item)
13. CEO's Report (Discussion Item)
a) Potential Impacts of Market Volatility
b) Rates Expectations for FY 22-23
c) SCE Cost of Service
d) Staffing Challenges
14. Receive Presentation from Management Partners Inc. Detailing Community Advisory Committee Ad Hoc Subcommittee Agreements and Further Recommendations and Approve Amendments to the Community Advisory Committee Bylaws to Incorporate the Recommendations (Action Item)
15. Support CCCE Turnkey Ownership Model for Front of the Meter Energy Storage Assets and Direct CEO to take Necessary Steps to Prepare a Bond Issuance for Later Policy Board Review and Approval (Action Item)
16. Adopt Resolution No. PB-2022-01 to Support Senate Bill 1020 to Establish An Alternative Funding Source for Public Benefit Programs Currently Funded Through Electricity Delivery Rates (Action Items)
Board Member Reports & Comments (Information Only)
Adjournment
Staff Report Item 1
TO: CCCE Policy Board of Directors
FROM: Tom Habashi, CEO
SUBJECT: Receive Presentation on 2017-2021 Impact Report (Presentation) DATE: June 15, 2022
RECOMMENDATION:
This recommends the Policy Board of Directors receive a presentation on the 2017-2021 Impact Report.
ANALYSIS:
The 2017-2021 CCCE Impact Report highlights five years of progress through a milestone timeline that depicts key moments in CCCE’s growth and policy adoption. Since its formation in 2017 (then as Monterey Bay Community Power), progress is documented in terms of innovation, financial stewardship, navigating challenges, growth mindset, being responsive to community needs, and industry leadership -- like the Pathway to 100% Clean and Renewable Energy by 2030.
CCCE has demonstrated the benefit of local control and highlights residential, commercial, and agricultural customers. The report demonstrates CCCE’s commitments to community reinvestment and to supporting new California renewable energy projects. The 2017-2021 CCCE Impact Report closes by describing the opportunities and challenges that lay ahead.
Staff anticipates this report will be a useful tool for new and existing customers, board members, member agencies, and strategic partners.
FISCAL IMPACT:
There is no fiscal impact related to this presentation.
ATTACHMENT(S):
1. 2017-2021 Impact Report
1 of 204
2017-2021
Impact Report
Central Coast Community Energy
- Central Coast
Community
Energy
2 2017 - 2021 Impact Report Introduction
Table of Contents
Introduction
Five Years
of Progress
Local
Control
Community
Reinvestment
Clean
Energy
Opportunities
and the Future
Joint Letter from Board Chair and CEO
Agency Goals
Milestone Timeline
Defining Progress
Our Board and Community Advisory Council
Our Customers
Supporting Small, Local and Diverse Businesses
Customer Savings
Energy Programs
Renewable/New renewable Investments to Date
Project Highlights
Member Agencies
Regulatory Legislative Opportunities
fl I Central Coast Community Energy
3 4
6 8
12 13
16 16
17 20
21 22
22 Introduction 2017 - 2021 Impact Report 3
Joint Letter from Board Chair
and CEO
Five years ago, many residents, businesses,
and policy leaders on the Central Coast saw
no feasible alternative to our region's electric
service. Most of the energy powering our
industries and our daily lives came from
fossil fuels. Prices were set by a state agency
in San Francisco; and while there was a
place for public participation, it was a lot
more complicated than calling your City
Mayor, County Supervisor, or attending a
local meeting.
Back then, people living here paid a rate
of return to the investors who financed our
utility service, and those dollars did not go
back to our communities. We were behind on
our goals to adopt renewable energy sources
like solar and wind, reduce greenhouse gas
emissions, and protect our environment for
future generations.
Looking back, the energy landscape for our
region in 2017 seems a world away. So
much has happened since then, including a
global pandemic.
But today we are well on our way to
achieving 100% renewable energy by 2030.
We have made sweeping changes in the
way we pay for, produce, and consume
energy. We have done it in the name of
protecting our environment and giving choice
and control back to our local communities.
And while much work remains, our strides
toward reducing the impact of climate
change on public health - on deforestation,
wildfires, and the ensuing risks to life
and property - are forming a pathway to
meaningful sustainability.
The 33 member agencies that make up
Central Coast Community Energy (CCCE)
each took a leap of faith in believing that
together we could do things better. Our
agency now serves more than 400,000
customers. There are more than twenty
Community Choice Aggregation agencies,
including ours, generating power for more
than eleven million Californians. Collectively,
we have procured nearly 10,000 megawatts in
contracts for new-build clean energy sources.
Through innovation and tenacity, local
governments up and down the Central Coast
have demonstrated the progress we can
make on solving seemingly insurmountable
problems when we combine resources and
believe that change is possible. Imagine
what the next decade holds.
tom -/-h;J. Mhi
Tom Habashi
Chief Executive Officer
J'fwe /½cJ!,w._vie,
Steve Mcshane
City Councilmember, Salinas
Policy Board Chair
CCCenergy.org
4 2017 - 2021 Impact Report Introduction
Agency Goals
CLEAN
ENERGY.
LOCAL
CONTROL.
Electrification through
Energy Programs
Energy Programs accelerate
electrification of the Central
Coast's transportation, building,
and agricultural sectors through
funding and resources to assist
with the transition from fossil
fuels to clean and renewable
solutions.
Energizing the
Local Economy
CCCE makes direct and indirect
contributions to the Central
Coast economy through
affordable rates, job creation,
preferencing local purchasing,
and support of local businesses
through electrification-focused
energy programs.
fl I Central Coast Community Energy
Greenhouse Gas Reduction
CCCE is focused on reducing
greenhouse gas emissions.
CCCE continues to demonstrate
how impactful environmental
change can be achieved cost
effectively.
Affordable and
Competitive Rates
CCCE is committed to providing
electricity to customers at
affordable and competitive rates.
The prices the agency charges
for electricity no longer follow
Investor-Owned Utility rates, but
are based on the actual cost to
serve customers.
Rate Stability
and Reliability
Long-term rate stability is
an underlying goal in CCCE
procurement strategies, rate
design, energy program design,
and in regulatory and legislative
focus areas. The agency's
creation of a Rate Stabilization
Fund helps build the foundation
for reducing the frequency of
rate changes and the ability
to absorb market fluctuations
without impacting customers.
2017 - 2021 Impact Report 5
2021 Key Accomplishments
CCCE Services Begins for
11 New Member Agencies
Arroyo Grande, Carpinteria,
Del Rey Oaks, Goleta, Grover
Beach, Guadalupe, Paso Robles,
Pismo Beach, Santa Maria,
Solvang, and Santa Barbara
County join 22 Central Coast
Communities served by CCCE.
Community
Reinvestment through
Energy Programs
CCCE commits to its largest
Energy Program fund to date.
Electrify Your Ride makes $2.8
million available to customers to
electrify the transportation sector
via rebates for vehicles, chargers,
and electrical updates.
Grant Program for Community
Education, Workforce
Training, and Municipal
Electrification Projects
Funds will support electrification
education targeting disadvantaged
communities, e-bike lending
libraries, EV adoption, paid energy
sector student internships,
energy curriculum development
and implementation.
Local Energy
Storage Projects
Contracts signed for four
energy storage/battery
projects in Gonzales,
Salinas, Santa Maria, and
Unincorporated Monterey
County. All projects expected
to be operational in 2026.
CCCE and CA Energy
Commission make $12 million
available for EV Chargers
Providing eligible CCCE
customers in San Luis Obispo
and Santa Barbara Counties
with up to $80,000 per DC fast
charger and $6,000 per Level
2 charging station to increase
public access to EV charging.
Local Vendor Registry
In support of small, local, and
diverse businesses, CCCE
initiated its Local Vendor
Registry to increase positive local
economic impacts.
Large-Scale Local
Generation and
Storage Projects
Request for Proposals supporting
long-term agreements with a
minimum of 20MWs generation,
or standalone battery storage
of 1 MW or greater sited within
CCCE service area.
New Renewable
Energy Infrastructure
Construction begins on 2nd and
3rd of six new renewable energy
projects supported by CCCE:
Casa Diablo IV Geothermal
(30MWs) in Mammoth Lakes, CA
and Rabbitbrush Solar (1 00MWs)
in Kern County, CA.
Member Agency Services
Supporting growth of clean
energy and electrification
through 33 members agencies
each uniquely positioned to
accelerate progress through
regulatory and policy action,
fleets and facilities, and
community action.
CCCenergy.org
6 2017 - 2021 Impact Report Introduction
5 Years of Growth
and Progress
MARCH
2017
Monterey Bay
Community Power
(MBCP) was founded
to provide clean
affordable energy
to customers in
Monterey, San
Benito, and Santa
Cruz Counties
DECEMBER
2018
Expansion to the
Cities of Morro Bay
and San Luis Obispo
MBCP service begins
Formation of Community
Advisory Council
JANUARY
2020
MBCP service begins for
the Cities of Morro Bay
and San Luis Obispo
MBCP secures its first
agreement for local
energy storage, securing
Resource Adequacy from
the Cal Flats Solar Project
Expansion to the County
of Santa Barbara and
Cities of Arroyo Grande,
Carpinteria, Del Rey Oaks,
Goleta, Grover Beach,
Guadalupe, Paso Robles,
Pismo Beach, Santa Maria,
and Solvang
Agenc
chang
Coast
Energ:
New�
stratei
to 10(
renew
annou
MARCH DECEMBER
2018 2019
fl I Central Coast Community Energy
Expan
City o·
SEPTEMBER
2020
JANUARY
2021
DECEMBER
2021
MARCH
2022
•
:y name
ed to Central
Community
y (CCCE)
>rocurement
�y and "Pathway
)% clean and
able energy"
inced
sion to the
f Buellton
CCCE service begins for
Northern Unincorporated
Santa Barbara County
and the Cities of Arroyo
Grande, Carpinteria, Del
Rey Oaks, Goleta, Grover
Beach, Guadalupe, Paso
Robles, Pismo Beach,
Santa Maria, and Solvang
vote to join CCCE
• Member Agency
Services formed
to support
electrification
among Member
Agencies,
including
planning and
implementation
•
•
Cost of Service
rate structure
implemented -
decoupling CCCE
from IOU rates
City of Atascadero
votes to join CCCE
CCCE service
begins for Southern
Unincorporated
Santa Barbara CCCE service begins
• County
OCTOBER
2021
• for the City of Buellton
JANUARY
2022
>
8 2017 - 2021 Impact Report Defining Progress
Defining Progress
Leading with Innovation
CCCE Boards have consistently put the agency
and its customers ahead of the curve by
anticipating industry trends and changes to state
energy policies. Years before reliability concerns
led the CPUC to mandate energy storage
procurement, CCCE signed power purchase
agreements with California's largest solar-plus-storage project and the state's most advanced geothermal project in 30 years. The Slate 1 Solar
project now supplies power at times when the
CCCE service area needs it most, while the CD4
geothermal project will supply renewable energy
around the clock, every day of the year.
Foresight has also played a role on the financing
front, where CCCE was instrumental in the
formation of CC Power and CCCFA-which
is a finance conduit entity designed to help
Community Choice Aggregators (CCAs) save
through bond financed prepay deal structures.
This Joint Powers Authority combines the buying
power of ten CCAs to reduce energy costs and
financial risk.
Embracing emerging technologies has also
been a mainstay of CCCE's policy direction and
progress toward its goals. Within the dynamic
world of energy storage, three of four local
energy storage projects being negotiated will
deploy vanadium energy storage technology.
Vanadium batteries have a longer operational
lifespan than earlier technologies, operate with
a slower release for longer duration storage, and
are safer due to non-flammable materials.
Financial Stewardship
Energy markets are notoriously volatile, but
CCCE has implemented effective safeguards
against market fluctuations. In 2020, CCCE
fl I Central Coast Community Energy
received an 'A' investment-grade credit rating,
a first among California CCAs and a milestone
toward further reducing energy costs and
reaching 100% clean and renewable energy
by 2030. Boards have also prioritized growing
the Rate Stabilization Fund to weather market
challenges and remain competitive with IOUs.
Navigating Challenges
While no business is immune to challenges,
looking at obstacles as opportunities has served
CCCE and its customers well. Historically,
all Community Choice Aggregators (CCAs)
operating in California - currently 24 and
counting - have calculated their rates the same
way: match the investor-owned utility rates and
apply a discount. Under this system, if IOU rates
go up or down, CCA rates must be recalculated
too. With some IOUs changing rates multiple
times a year, many customers find their utility bills
indecipherable and complex, with new charges,
changing charges, and unpredictable costs.
Following extensive research and customer
engagement, CCCE approved a Cost-of-Service
rate structure for the agency, which bases the
prices customers are charged for energy on the
cost of procuring that energy. By separating its
rate design from the IOUs, CCCE is now able to
deliver predictable rates that are affordable and
fair across all customer classes. Utilizing
a cost-based rate structure puts CCCE and its
customers in a class of their own.
Growth Mindset
In the early 201 Os, when CCCE was merely a
concept, the promise of an innovative agency
focused on local control, clean energy, and
community reinvestment found favor within
communities across the Central Coast. What
Defining Progress
was first an idea for Santa Cruz County quickly
grew to include neighboring Monterey and
San Benito Counties. Today, CCCE serves 33
communities in five counties from Santa Cruz to
Santa Barbara.
As a community-focused organization, inviting
adjacent cities and counties to join was both the
neighborly thing to do and a reflection of the
agency's tireless desire to do more: to combat
the climate crisis, in support of customers, and
in consideration of underserved communities
that deserve more equitable access to clean
energy resources. As CCCE's service area has
grown, so too has the agency's potential to
deliver economic and environmental benefits.
Responsiveness to Community Needs
At its core, the CCA model is a response to
community needs. Participating cities and
counties want more control over their electricity
service, desire to grow clean and renewable
energy resources, and aspire to turn an essential
utility service into a vehicle for economic growth
and environmental protection.
A portion of CCCE revenue is reinvested
into the communities it serves through the
agency's energy programs department, which
designs rebate and incentive programs to
help customers adopt cleaner technologies in
their homes and businesses. In 2021, energy
programs staff worked alongside the Community
Advisory Council to engage in a design process
that included a series of workshops focused on
determining community priorities, establishing
program design criteria, and evaluating
concepts before finally selecting program
areas for upcoming years. Each workshop was
promoted through community outreach and
2017 - 2021 Impact Report 9
bilingual paid advertising campaigns.
Also in 2021, in response to the Covid
pandemic, CCCE implemented $24 million
in temporary billing relief for all customers.
CCCE continues to promote financial assistance
programs and maintains a web page dedicated
to local, state, and federal financial resources
for qualified customers. CCCE also serves as
a conduit for programs such as the California
Arrearage Payment Plan (CAPP), which has
delivered nearly $3 million to CCCE customers.
This year, CCCE will apply a $100 bill credit to
income-qualified customers in the PG&E
service area.
A Pathway to 100% Clean and Renewable
Energy by 2030
When CCCE began service, electricity
from "carbon free" sources set the bar for
procurement strategy and emissions reduction.
While this attainable goal served the agency
and its customers well during startup years,
leadership's forward thinking produced the
position that being "carbon free" via attributes
or carbon offsets was not driving enough
environmental change, nor contributing to a
cleaner, more reliable grid.
Staff proposed an innovative, impactful
strategy designed for more tangible progress
through long-term agreements with new
renewable energy and storage projects. When
Boards approved this updated procurement
strategy, the Pathway to 100% Clean and
Renewable Energy by 2030 was set, charting
CCCE and customers on a course to meet the
state's zero emissions mandate 15 years ahead
of schedule.
CCCenergy.org
10 2017 - 2021 Impact Report Local Control
Local Control
The CCA model is rooted in local control.
Decisions regarding power procurement, rates,
and any important business related to the agency
are made in meetings where the public is free to
participate.
CCCE Policy and Operations Board members
also represent each community that CCCE serves
either as active city or county administrators or
elected officials. Administrators serving on the
Operations Board oversee day-to-day functions
of the agency while elected officials advise and
vote on decisions that affect rates, policies, and
strategic direction. Additionally, CCCE established
its Community Advisory Council shortly after
launching in 2018 to facilitate ongoing community
engagement and help identify the unique needs
of the Central Coast's diverse communities.
In 2021, community stakeholders voiced their
opinions on a range of important topics. Their
positions informed Board policies that helped the
following initiatives come to life in 2021.
• Backup Power Resources: Bolstered
by community input about the need for
backup power resources at critical facilities,
the agency collaborated with the County
of Santa Cruz to provide backup power
for three different facilities through the
Uninterruptible Power Supply Fund.
2021 COMMUNITY ENGAGEMENT EVENTS
• Electric Rates Set Locally: After extensive
community engagement, CCCE Boards
adopted a cost-based rate structure for
reliable, transparent, and fair rates across
all customer classes. These rates allow
for continued community reinvestment,
increased rate stabilization funds, and
additional support for customers in
underserved communities.
• Energy Programs Design: Building off
evaluation criteria, priorities, and concepts
established through extensive community
engagement in 2020 and 2021, the Energy
Programs department utlized input from the
CAC and launched a new series of programs
in 2021, including higher rebates for low-income customers, additional funding for electric vehicles and ag electrification, plus
a suite of incentives designed specifically for
member agencies.
• Large-Scale, Local Generation and
Storage Projects: Community voices and
CCCE align on the commitment to support
local generation and storage projects.
CCCE issued a Request for Proposals with
the potential to support local economic
development while contributing to the
agency goal of 100% clean and renewable
by 2030.
Types of Operations Board Community Advisory CCCE Events Hosted I Event Policy Board Meeting Meeting Council (CAC) Programs Workshop or Participated In Meeting
Number of 8 I
9 l10 1
2 200 Events
1 fl I Central Coast Community Energy
Local Control
• Supplier Diversity Report: In 2021 CCCE
filed its first annual Supplier Diversity
Report, creating an avenue for local and
diverse-owned businesses to engage with
the agency through vendor contracts. The
agency will look to businesses signed up
through its Vendor Registry for services
including consulting, catering, marketing,
legal, and more.
• Underserved Communities Outreach
Plan: Staff worked with the Community
Advisory Council on a comprehensive
Underserved Communities Outreach
Plan based on community feedback, staff
insights, and recommendations from
community-based organizations. The plan
covers advertising, event sponsorships and
strategic partnerships as well as beginning
to identify needs and geographic location of
vulnerable populations.
• Community Education: Lack of consumer
awareness has slowed regional adoption of
electrification in the CCCE service area and
beyond. As a result, grant programs focused
on community education were established.
• Broadband Access: The agency continues to
pursue opportunities to support broadband
access for underserved communities, which
is vital to economic participation and opens
the door to power demand management
programs that will increase reliability as the
grid shifts to cleaner power.
2017 - 2021 Impact Report 11
CCCenergy.org
12 2017 - 2021 Impact Report Local Control
CCCE BOARDS AND COMMUNITY ADVISORY COUNCIL
All CCCE Policy and Operations Board meetings, as well as Community Advisory Council (CAC) meetings, are open and accessible to the public.
To assure representation of all communities and customers served, CCCE Boards are comprised of elected officials and city/county administrators from its member communities. In 2020, the Policy Board amended its Operating Rules and Procedures to provide for Limited Memberships, which allow non-seated jurisdictions to attend and participate in Board discussions.
Coastal
Cities
Marina
Sand City*
Seaside
Del Rey
Oaks
Coastal
Cities
Marina
Sand City*
Seaside
Del Rey
Oaks
Peninsula
Cities
Carmel
Monterey
CCCE POLICY BOARD STRUCTURE
County of Santa Cruz • City of Santa Cruz • City of Watsonville • County of Monterey City of Salinas • County of San Benito • County of Santa Barbara • City of Santa Maria South San Benito Santa Cruz San Luis South County Santa Barbara Monterey Cities Cities Obispo Cities County Cities
County Cities
Cities Hollister* Capitola* Arroyo Guadalupe
San Luis Grande
Greenfield San Juan Scotts Obispo* Solvang*
Grover Bautista Valley Pacific Grove* Gonzales* Morro Bay Beach Buellton Peninsula
Cities
Carmel*
Monterey
Soledad Paso Robles Pismo
Beach*
CCCE OPERATIONS BOARD STRUCTURE
County of Santa Cruz • City of Santa Cruz • City of Watsonville • County of Monterey City of Salinas • County of San Benito • County of Santa Barbara • City of Santa Maria South San Benito Santa Cruz San Luis South County Santa Barbara Monterey Cities Cities Obispo Cities County Cities
County Cities
Cities Hollister* Capitola* Arroyo Guadalupe
San Luis Grande
Greenfield San Juan Scotts Obispo* Solvang*
Grover Bautista Valley Pacific Grove Gonzales* Morro Bay Beach Buellton Soledad Paso Robles Pismo
Beach*
*City representative currently serving in a shared seat Policy Board of Directors
Meets 4 times each calendar year including Annual Meeting Santa Barbara
County
Cities
Goleta
Carpinteria*
Santa Barbara
County
Cities
Goleta*
Carpinteria
Comprised of elected officials from CCCE's member agencies, the CCCE Policy Board provides guidance and approval in strategic planning, goal setting, budgeting, customer rates, and large capital expenses outside day-to-day power procurement activities.
Operations Board of Directors
Meets 9 times each calendar year including Annual Meeting Members of the CCCE Operations Board are County Administrators, City Managers, or other senior staff within CCCE's member agencies. The Operations Board provides oversight and support on matters pertaining to the provision of electrical service to customers and the routine operations of CCCE.
Community Advisory Council
Meets 7 times each calendar year including Annual Meeting The Community Advisory Council represents the perspectives and priorities of the communities served by CCCE.
With the goal of providing feedback to the Policy and Operations Boards, this 15-member group represents CCCE's customers and stakeholders. CCCE solicits applications from citizens that reside or work within the agency's service area to become members of the CAC.
fl I Central Coast Community Energy
Local Control
OUR CUSTOMERS
As a community-focused public agency, engagement with our customers is a driving force for much of the agency's work.
Through direct customer contact, staff-hosted webinars, virtual workshops as well as community events, surveys, and membership in business, environmental and community-based organizations, CCCE staff is constantly looking for new opportunities to reach and build positive relationships with our customers.
RESIDENTIAL
At 340,662, residential customers comprise CCCE's
largest customer segment, a group in which nearly 20% of customers (64,872) are categorized as low-income through their participation in PG&E's and SCE's CARE or FERA
rate-assistance programs. Conversely, this influential and engaged segment accounts for just 36% of CCCE's total
load. This underscores the fact that CCCE's service area is incredibly diverse and its customers each have their own unique needs.
Surveys administered in 2020 showed that the majority of respondents choose clean energy and competitive rates
as their first and second priorities, respectively. These results suggest that being a CCCE customer involves both economic and environmental considerations.
Customer Segment Snapshot - Residential
# Customers
(Jan 2021 Enroll)
340,662
Elec. Generation
load (MWh)
1,824,771,638
Enrollment by
Customer Count
93.73% 1
Enrollment
by Load
93.23%
2017 - 2021 Impact Report 13
I Cent,al Coast
Community
Energy
e Cu,rentl)'Enroll•d
e Octobe,2021Enrol _..,_..__
2022En,oll
CCCE serves four counties and 29 cities along the Central Coast.
Major industries in CCCE service area are agriculture, tourism & hospitality, higher education, government, military, and healthcare.
While CCCE has initiated important regional gains toward climate goals, individual residents and households still play important roles in reaching statewide goals. The Copeland family utilized Electrify Your Ride rebates to offset EV readiness costs associated with a new Accessible Dwelling Unit for senior family members, and a new electric vehicle.
"The CCCE rebate helped our daughter get her first car. The application and our experience working with CCCE was simple and efficient," shares Alexis Copeland. "An excellent community resource, we have encouraged many of our friends to investigate. Participating in this Energy Program affirms and rewards our plan to have an environmentally sensitive and conscious lifestyle."
CCCenergy.org
14 2017 - 2021 Impact Report Local Control
COMMERCIAL
Among all CCCE customer segments, commercial customers
account for the largest portion of energy usage and revenue generation within CCCE's service area. This segment also includes the city and county governments served by the
agency.
Commercial customers play an integral role in achieving agency goals. By collaborating with local businesses to understand their needs and priorities, CCCE is able to move the Central Coast's industries towards their own financial, operational, and environmental goals.
Customer Segment Snapshot - Commercial
# Customers
(Jan 2021 Enroll)
L
52,658
Elec. Generation
load (MWh)
2,370,195,038
AGRICULTURAL
Enrollment by
Customer Count
97.24% _J_
Enrollment
by Load
95.01%
It's no exaggeration to term agriculture the backbone of the local economy on California's Central Coast. The ag industry has significant and dynamic energy needs. While ag depends on large-scale electricity to pump water for crops, it has also become one of our region's pioneers in addressing environmental impacts. Providing economic incentives to major farming operations to electrify pumps and motors
presents enormous opportunities for collaboration and
improvement of air quality and emissions levels.
Customer Segment Snapshot - Agricultural
# Customers
(Jan 2021 Enroll)
5,104 1
Elec. Generation
load (MWh)
741,879,059
Enrollment by
Customer Count
96.84% l
fl I Central Coast Community Energy
Enrollment
by Load
98.53%
The Monterey Regional Waste Management District (MRWMD) has been a champion of sustainability for decades, turning waste into resources. The agency is recognized as a leader and an important regional employer. The staff at MRWMD applied for and received CCCE Energy Program funding for installation of six publicly accessible Level 2 electric vehicle (EV) chargers-and they're powering them with renewable energy from their own biogas generator.
"MRWMD has been generating renewable energy from landfill biogas since 1983," shares Guy Petraborg, Director of Engineering & Compliance. "The EV Charging Stations mark the latest evolution of the beneficial use of renewable energy to reduce emissions to the environment. MRWMD applauds CCCE's and Monterey Bay Air Resources District's efforts to reduce emissions through electrification." Located in the Santa Ynez River Valley, Winfield Farms is one of many small-to-medium-sized businesses benefiting from CCCE service. woln addition to cost savings and access to energy program funding, CCCE's underlying commitment to reducing GHG emissions through clean energy solutions found support in Winfield Farm's dean-energy goals.
"We appreciate the fact that CCCE's Ag Electrification Program is offering help to smaller-sized farms. Clean-energy solutions will require a lot of innovation to attain the emissions goals that California has set," shares owners Bruce and Diane Steele. "We had already purchased a SkW solar array and 2 Tesla powered walls, so obtaining an electric tractor is another big step forward. These funds are a major help to reach Winfield Farm's goal to attain a 100% solar electric farm."
16 2017 - 2021 Impact Report Community Reinvestment
Community Reinvestment
Contributing to the economic vitality of our Central
Coast region is a founding goal for CCCE. Making
positive contributions to the Central Coast economy
has come to be referred to as "Community
Reinvestment." This descriptor also affirms the
value proposition of the CCA model, from energy
programs and clean energy workforce development,
to supporting the region's small, local, and diverse
businesses through purchase of goods and services.
CUSTOMER SAVINGS
Since launching in 2018, CCCE has consistently
provided electricity generation services at a
savings when compared to PG&E or SCE and 2021
was no exception. Like all other California CCAs,
CCCE has followed a rate structure that is based
on mirroring IOU rates - inclusive of IOU fees
- and applying a discount. In late 2021, CCCE
Policy Board gave final approval to a cost-based
rate structure that more accurately reflects the true
costs of serving our customers and provides
reliable, transparent, and fair rates while remaining
highly competitive with IOU rates.
2021 Customer Savings•
Agriculture $949,106
Commercial $2,933,434
Residential $2,223,398
Total $6,105,938
- -
*Savings based on comparing 2021 CCCE Electric Generation Rates to 2021 PGE & SCE Electric Generation Rates
fl I Central Coast Community Energy
SUPPORTING SMALL, LOCAL, AND
DIVERSE BUSINESSES
In 2021 CCCE passed the Small and Local
Preference Policy and instituted a Local Vendor
Registry to contract with more small, local, and
diverse businesses. CCCE rolled this initiative into
outreach efforts and began growing a list of
go-to local businesses for future goods and service
needs.
CCCE also filed its first Supplier Diversity Report
with the CPUC as the foundation for continued
and transparent growth in this area of community
reinvestment. Procurement and spending activities
are directed whenever possible to small, local, and
diverse business enterprises. In so doing, CCCE
maximizes its economic impact in the region,
delivers on the promise of its mission, and works
toward meeting the statewide objectives set by
Senate Bill 255.
Additionally, many program incentives are tiered to
provide the greatest benefit to customers with the
fewest resources, thereby encouraging greater
participation by those who have historically faced
barriers to access.
Summary of Measures Reported in the
2021 Supplier Diversity Report
$49,918
Spent on local events & sponsorships
$3 , 59
Spent on Women's Business Enterprise (WBE)
$979,233
Total CCCE spend in service area with local businesses
13 New hires
$14.1 million
Allocated to energy programs
$25 million
Allocated for resiliency at critical facilities
Community Reinvestment
ENERGY PROGRAMS
Funding made available to CCCE customers
through Energy Programs continues to be one of
the most significant contributors to community
reinvestment; CCCE allocates 3% of gross revenue
to Energy Programs. Since launching in 2018, CCCE
staff has collaborated with local and statewide
agencies to make more than $26 million available to
CCCE customers.
Designed to assist households and businesses with
the transition from fossil-fuel sources to clean-energy solutions, energy programs target the three sectors which make the biggest contributions to
Central Coast GHG emissions: transportation,
building, and agriculture. In addition to improving
energy resiliency, CCCE Energy Programs are
accelerating electrification while making significant
contributions to GHG reductions, as well as making
valuable funding available to customers.
In addition to supporting agency goals, CCCE
Energy Programs help to address equity and the
unique needs and priorities of the Central Coast's
diverse communities. Achieving these objectives
requires consistent community engagement to gain
a clear understanding of what CCCE communities
need most. Residential customer energy programs
offer increased incentives for income-qualified
applicants. Other programs that may not exclusively
target disadvantaged communities can nevertheless
provide additional gains. For example, nearly all
funding for the Electric School Bus Program is going
to Title 1 schools.
Through direct contact, workshops, surveys and the
Community Advisory Council, CCCE has involved
customers and stakeholders in every aspect of
energy program design; from evaluation criteria
to concepts and implementation. Energy programs
remain a hallmark for local control and the power of
community input.
2017 - 2021 Impact Report 17
Income-Qualified vs.
Non Income-Qualified Program Incentive
Non
Income-Qualified $
59%
Income-Qualified $
41%
Total Incentives Approved/Reserved
Agriculture
Electrification
188,742
Central Coast Incentive
Project (CALeVIP)
1,000,000
Charge
Your Ride
177,548.72
j_
Electric
School Bus
1,235,257.92
Electrify
Your Ride
695,900
CCCenergy.org
18 2017 - 2021 Impact Report Community Reinvestment
Program
Agriculture
Electrification
Charge Your
Ride
Electric School
Bus
Electrify Your
Ride
Ed Grants
New
Construction
Electrification
Central Coast
Incentive
Project
Total
Number of
Approved
projects
14 235
7 360
7 24
61 701
ENERGY PROGRAMS
Total CCCE Incentive
Approved
$188,742
$177,549
$1,235,258
$695,900
$290,660
$2,178,300
$1,000,000
$5,766,409
Total Program Budget
$400,000
$1,000,000
$295,000
$2,200,000
$295,000
$700,000
$2,200,000
$7,090,000
fl I Central Coast Community Energy
$ for Equity
Projects
-
$15,155
-
$120,400
-
$1,792,500
$324,807
$2,252,862
Results
Estimated 65,000 gallons of
fossil fuel reduced. Air quality
and workplace improvements
for local ag businesses.
8 Home Charger installations at
CARE/FERA customer sites.
7 electric buses. Air quality
improvements for students and
the community at large.
39 EVs purchased by CARE/
FERA customers.
717 all-electric affordable
housing units.
24 new Public EV charging
stations.
Over 75% of the programs
budget was approved/
reserved.
20 2017 - 2021 Impact Report Clean Energy
Clean Energy: Pathway to
100% Clean and Renewable
Expanding technologies, historic lows for the cost of
renewable energy, rising costs for carbon-free energy
credits, and a need for greater greenhouse gas
emissions reductions led CCCE staff to reassess its
power procurement strategy in 2021.
A path forward was identified that could accelerate
progress toward GHG reduction while leveraging
long-term and low-cost energy contracts for
enhanced rate stability. By focusing on new-build renewable energy generation, procurement could provide more impactful and longer-lasting
gains. Altogether, these changes created a power
procurement strategy that promises to deliver 100%
clean and renewable energy by 2030; 15 years ahead
of statewide goals.
Other factors in this decision included continued
unpredictability and rising costs associated with the
Power Charge Indifference Assessment (PCIA) fee,
as well as increasing costs for hydroelectric and its
associated carbon-free attributes.
CCC E's Pathway to 100% Clean and Renewable will
help reduce power supply costs by $8.5 - $15MM
per year, or approximately $11 ?MM over the next
10 years. Simultaneously, CCCE will increase its
commitments to new renewable energy sources
from 453 MW to an estimated 1,800MW. Coupled
with storage, these changes will make significant
contributions to a cleaner and more reliable grid.
Operational changes like the Pathway to 100%
Clean and Renewable energy help the agency meet
its goals and create meaningful opportunities such
as the four local generation and storage projects
approved in 2021. Other notable gains in clean
and renewable energy include continued emissions
reduction through support of community climate
action plans, reach code incentives, energy programs
focused on transportation, building and agricultural
electrification.
Altogether, CCCE's commitment to supporting the
growth of clean and renewable energy as well as
providing equitable access to clean energy resources
will yield significant impacts for the Central Coast.
Though CCCE is locally focused, these impacts are
truly moving the needle on a statewide level.
Now Transitioning Through 2025 Transitioning Through 2030 I Clean and
Renewable
Resources
GHG
Accounting
Heavy reliance on existing
resources, short-term
renewable (RPS) and large
hydro credits
Multi-year RPS Compliance
Filings Annual Power
Content Label (PCL)
fl I Central Coast Community Energy
Reach 60% RPS renewable
resources, 5 years ahead of
state RPS mandate
Study the feasibility of
transitioning to monthly
balancing of demand and
renewable resources
Reach 100% RPS renewable
resources, 40% above state
RPS mandate
Reach that goal with
longterm PPAs, nearly
double the goal set by
SB350
Achieve monthly balancing
of demand and clean and
renewable resources
Clean Energy 2017 - 2021 Impact Report 21
RENEWABLE AND NEW RENEWABLE INVESTMENTS TO DATE
Since launching, CCCE has executed seventeen long-term Power Purchase Agreements totaling 889MW of renewable generation and $2.1 billion invested.
PROJECT NAME GENERATION BATTERY EXPECTED DELIVE��
(EXECUTED PPAS) SOURCE MEGAWATT MEGAWATT LOCATION ONLINE TERM (IN
DATE YEARS)
RE Slate (Recurrent) Solar + Storage 67.5 33.75 Kings County 3/01/22 17 BigBeau (EDF) Solar + Storage 57.6 18.0 I Kern County 9/01/22 20 Mammoth Casa Diablo IV Geothermal 7.0 N/A Mono County 6/22/22 10 Coso Geothermal Power Geothermal T 66.3 =r N/A I Inyo County 01 /01 /22 15 Rabbitbrush (Frist Solar) Solar + Storage 60.0 12.0 Kern County 9/01/22 15 Yellow Pine (NextEra) Solar + Storage 75.0 I 39.0 Clark County, NV 3/01/23 [ 20 California Flats BESS Storage 60.0 Monterey County 9/21/21 10 Aratina (SME) Solar + Storage 120.0 30.0 Kern County 12/23/23 20 Mountain View Wind 33.3 N/A Riverside County 7/22/22 20 Atlas Solar Solar Only T 150 =r N/A La Paz County, AZ 6/23/23 [ 10 Angela Solar + Storage 20 10 Tulare County 7/23/23 15 Victory Pass Solar + Storage 100 25 Riverside County 9/23/23 r 15 San Luis West Solar + Storage 62.5 15.625 Fresno County 12/23/23 15 Jasmine Solar + Storage 70 J_ 17.5 l
Kern County 6/24/24 12
Standalone Energy Santa Barbara RPCA Storage 1 Storage 4-hour N/A 10 County 12/24/24 20 Lithium-Ion
Standalone Energy 1 L
Bodega Energy Storage Storage 8-hour N/A 10 Monterey County 6/01/26 20 Vanadium
Green Valley Energy Standalone Energy
Storage Storage 8-hour N/A 16 Monterey County 6/01/26 20 Vanadium
Rava Mesa Energy Standalone Energy I' r
Storage Storage 8-hour N/A Monterey County 6/01/26 20
Vanadium
Total 889 303
Slate 1 solar-plus-storage project nears completion in Fresno County Construction begins on Casa Diablo Geothermal Project near Mammoth Lakes, CA CCCenergy.org
22 2017 - 2021 Impact Report Opportunities and the Future Opportunities and
the Future
From the beginning, CCCE's Boards have navigated
the unpredictable nature of California's energy market
while continuing to make significant progress on the
agency's long-term goals. This includes goals
concerning community engagement, where agency
staff have continued to build relationships with
customers and stakeholder groups. Being responsive
to community priorities and needs helps to further
shape the agency's strategic objectives.
With each passing year, CCCE customers and
member agencies find ways to play a big role on a
small scale, making regional progress toward climate
goals. Electrifying the transportation, building,
agricultural, and commercial sectors is essential if
we are to reduce emissions to levels safe for the
planet. The antidote to climate anxiety is action, and
together we have already made measurable progress.
MEMBER AGENCIES
The cities and counties that CCCE serves are uniquely
positioned to engage and inspire local households and
businesses to action. Local governments can amplify
messages and opportunities around electrification,
GHG emissions reduction, and local economic
development.
Member Agencies can also accelerate progress
toward shared goals through their relationships with
state-level officials. Enlisting their voices to push for state and federal incentives for investment tax credits, production tax credits, energy efficiency programs,
and the critical assessment of the utility industry holds great potential.
fl I Central Coast Community Energy
REGULATORY AND LEGISLATIVE
OPPORTUNITIES
CCCE staff is also engaged in regulatory and
legislative initiatives focused on the energy industry, regularly weighing in on policies proposed at the state level to ensure fairness, equity, and progress toward a complete transition to renewable energy.
Currently, CCAs serve more than 11 million customers
and account for nearly a quarter of the state's electric load. CCCE's regulatory and legislative affairs staff
works with other CCA representatives to see that local
agencies are part of the conversation when it comes to
energy policy in California.
Grid stability, energy resiliency, and increased
transparency around fees levied on customers such
as the Power Charge Indifference Adjustment are just
some of the topics Central Coast Community Energy
has lent its time and expertise to help shape.
Through raising awareness, working with community
leaders and elected officials, strategic planning,
and presenting our case to the California Public
Utilities Commission and the California Energy
Commission, CCCE is working to level the playing field
for CCAs, many of which have already made significant
contributions to California's ambitious climate and
energy goals.
The regulatory and legislative arenas present
opportunities for CCCE and the CCA community to
address standards and policies that work against the
clean energy future we are committed to create. As
California's energy landscape continues to evolve,
staff has identified its key focus areas for policy
engagement:
Opportunities and the Future
Grid Reliability
In addition to supporting steps being taken by the
California Public Utilities Commission, the California
Energy Commission, and the California Independent
System Operator to improve grid reliability, staff
will continue researching opportunities for further
improvement through policies, procurement strategy,
and generation and distributed energy resources that
include energy storage.
Power Charge Indifference Adjustment (PCIA)
The PCIA was instituted so bundled customers
wouldn't face increased costs due to customers
switching to direct access or CCA suppliers. As a
united front, CCCE will continue collaborating with
other CCAs, policymakers and the state's regulatory
and legislative bodies to chart a clear and transparent path toward rationalizing, reducing, and eventually
retiring this cost.
Resource Adequacy
Resource Adequacy (RA) plays a major role in the
grid resiliency but RA policies and programs have
not been modified to account for the growth of
renewables and other market changes. CCCE is
participating in a process for proposed modifications
to related programs and policies.
Federal Investment Tax Credit (ITC) for
Stand-Alone Energy Storage
The Federal ITC currently applies to energy storage
projects only when installed in combination with
a solar photovoltaic system. Stand-alone energy
storage systems are critical to building a resilient,
reliable, and sustainable energy grid. Federal
investment tax incentives are necessary to foster and
accelerate the development of these projects.
2017 - 2021 Impact Report 23
CCCenergy.org
24 2017 - 2021 Impact Report
fl I Central Coast Community Energy
Staff Report Item 2
TO: Central Coast Community Energy Policy Board
FROM: Tom Habashi, Chief Executive Officer
SUBJECT: Receive Oral Presentation of CCCE’s Draft 2022 Finance Strategic Initiatives and Direct the CEO take the necessary steps to implement the Finance Strategic Initiatives (Presentation)
DATE: June 8, 2022
RECOMMENDATION:
This recommends that the Policy Board members:
1) Receive an oral presentation reviewing CCCE’s 2022 Finance Strategic Initiatives; and 2) Direct the CEO to take Necessary Steps to implement the Finance Strategic Initiatives.
DISCUSSION:
This item will be addressed in the form of an oral report and presentation to the Policy Board.
ATTACHMENT(S):
1. Central Coast Community Energy Draft 2022 Finance Strategic Initiatives 2022 Finance Strategic
Initiatives
Policy Board
June 15, 2022
Central Coast
Community
Energy
• Introduction
• Strategic Financial Initiatives
• Liquidity Management
• Debt Issuance
• Energy Prepay
• Summary
Central Coast
Community
Energy 1
• CCCE finances have evolved considerably from its early days • $400 MM Revenues projected for FY2021/22 or $1.1 MM/Day • $170 MM in reserves and cash balances
• "A" credit rating from S&P
• Strong commitment by ownership to financial strength and stability • This strength positions CCCE to intentionally deploy finance more strategically, as sophisticated leading private and public organizations have done •
In this model, finance moves from invoice processing and reporting to becoming another way of achieving CCCE's strategic goals of decarbonization and affordable rates Central Coast
Community
Energy 2
Liquidity Management
• Historically, CCCE has maintained its cash balances - including reserves - in bank and overnight sweep accounts
• The interest-rate environment and the type of instruments has led to low returns even on $170 MM • The Federal Reserve has been tightening monetary policy, raising rates.
Markets have responded, with interest rates rising out the curve • On a notional portfolio of $100 MM, a 1 % real yield (net of fees) is $1 MM • CCCE's Operating budget is approximately $20 MM. $1 MM would materially reduce pressure on that budget
CCCE CASH BALANCES & AVERAGE YIELD
$200 2.50%
0 -'
2.00% �
UJ
\.!:J
1.50% z
UJ
u
er:: UJ
1.00% 0.. UJ
\.!:J
<(
er:: UJ
0.50% :i:
:::;
0.00% �
-Funds Invested -CCCE Avg APY -6-Month Treasury Daily APY 1-YearTreasury Daily APY Source: CCCE Treasurer Reports, St. Louis Federal Reserve FRED Database Central Coast
Community
Energy 4
• CCCE's Investment Policy has 3 goals, in line with California State Code • Principal Safety
• Liquidity
• Return on Investment
• State Code further states that the governing bodies of agencies or those authorized to manage public funds on behalf of those agencies are fiduciaries • Prudent Investor standard
• List of approved instruments, which conform with state law. CCCE policy is more conservative • Staff analysis determined CCCE could materially increase yield while meeting liquidity and principal safety requirements if certain safeguards were put in place
•
"Crawl Walk Run" philosophy - start with tight investment guidelines and medium-sized allocation (up to 60% of reserves)
• Reserves managed by professional liquidity management firm with robust risk management processes • Separate investment management and custody functions
• Regular ongoing reporting and monitoring of manager holdings and investment performance • Performance benchmark developed independently by CCCE and its Financial Advisor, tracking relative performance of investments
Central Coast
Community
Energy s
• Staff conducted an RFP for Liquidity Management Services in March-May • SEC-registered asset managers
• Minimum 1 O years experience managing institutional fixed income portfolios • Extensive disclosure requirements, including regulatory actions, litigation, fines, conflicts of interests etc.
• Detailed questions on investment management, research, and risk management capabilities, drawing on RFPs issued by a range of other public entities • Request for portfolios customized to CCCE's Investment Policy • A detailed evaluation process was conducted
• Panel review of initial responses, scoring on multiple factors • Review of respondents' ADV forms
•
Interviews with shortlisted candidates, with significant focus on investment and risk management practices
• Final score across multiple factors
Central Coast
Community
Energy s
• RBC Global Asset Management won
the RFP based on its combination of
rigorous risk management and value
• $465 Billion managed globally, $56 billion in
us
• 197 US clients, of which 56 are public / govt
• Multiple layers of risk management
• Independent in-house risk functions
• Ongoing portfolio rebalancing based on
CCCE's unique risk/reward profile
• Rigorous onboarding process, involving
CCCE when risk limits are being
implemented
• Extensive reporting and monitoring
• Tiered pricing, starting with 8 bps on first
$100 MM, 6 bps on next $25 MM etc. $75k
minimum
• Potential for preferential pricing on
transaction and investment banking services
• Principal Financial will be the custody
provider. Principal custodies $3 trillion,
interfaces well with RBC systems, was
highly responsive, and was the lowest-cost
provider
RBC Investment Policy Compliance & Risk Management
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Investment Risi< Operational R;sk R":9ulatory Risk Busmen & Financial Risk Central Coast
Community
Energy 7
Debt Issuance
• CCCE is considering asset ownership for Front of the Meter Energy Storage • Reduces markups and intermediary costs
• Provides greater visibility into and control over the supply chain • Reduces transaction risks inherent to PPAs, though this is offset somewhat by ownership risks • Maximizes asset operation flexibility, potentially increasing revenues and reducing cost of service • Financing assets through debt represents an attractive risk/reward • Potential storage bookends: $50 MM and $150 MM. Cash & reserves of approximately $170 MM imply even the $50 MM bookend would significantly reduce CCCE's balances • Avoids rate shock to customers by amortizing costs over 20-30 years • Enables CCCE to maintain adequate working capital
• Maintains the Rate Stabilization Fund buffer in a volatile commodity environment, crucial to avoiding rate shocks and maintaining CCCE's strong credit rating • While rates are rising, CCCE's credit rating and tax-exempt status help keep its borrowing costs low
� Central Coast
Community
Energy g
• CCCE commissioned a Ratings Evaluation Service (RES) from S&P and received a favorable result
• RES processes run mock debt issuances and provide the issuer with notional ratings • CCCE provided S&P with scenarios for $85 MM and $160 MM issuances • To stress test, CCCE requested ratings without traditional Rate & Additional Debt covenants • S&P's response indicated CCCE would receive investment-grade ratings even with $160 MM issuance; the lack of covenants was the biggest obstacle. Including covenants would be beneficial $180.00
$160.00
§; $140.00
� $120.00
z
<( $100.00
<( $80.00
0.:
� $60.00
� $40.00
$20.00
$0.00
PRINCIPAL BALANCE: 25 YEAR ISSUANCE@ 4% INTEREST
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 YEAR
--$85 MM Debt --$160 MM Debt
� Central Coast
Community
Energy 10
• Next steps
• Storage project scoping, siting, and aggregate sizing • Bond sizing, term, and spend-down schedule
• Updated RES from S&P with specific terms and covenants • Assemble team - Municipal Advisor, Bond Counsel, Underwriter, Trustee, Issuer Counsel • Financial modeling, documentation, and issuance finalization •
Investor roadshows
� Central Coast
Community
Energy 11
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• Energy Prepays are complex transactions in which CCCE effectively facilitates the prepayment of PPAs, lowering its PPA costs
• Prepays have existed for 20+ years in energy and natural gas, with billions in nominal contract value.
PFM Advisors LLC, CCCE's Financial Advisor, has advised on almost $5 billion in CA electric prepays alone
• Historically, prepays have yielded savings of 7%+ over the PPA contract price • The diagram below outlines the core structure of energy prepays; the Staff Report (Item 6 in today's Agenda) provides greater detail on prepay transactions
• The value to CCCE is savings over contracted PPA price. The value to the Counterparty is a source of stable differenti�tP.rl f1 inrlinn th�t i� lnwAr ft�v-AvAmnt hnnrl i��, ,�n�A) th�ri it could tap by issuing taxable bonds 1) CCCE partially assigns PPA to
Counterparty
2) CCCE and JPA execute Clean
Energy Purchase Contract
3) JPA issues non-recourse tax-exempt bonds
4) JPA makes prepayment to
Counlerparty for 30-year power
supply
SJ Counlerparty delivers power to
JPA via Master Power Supply
Agreement
6) JPA delivers power to CCCE
7) CCCE makes payments to JPA
net of savings
8) JPA makes debt payments with
payments from CCCE
PPA,obe
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CCCE
w) Central Coast
Community
Energy 13
• These are complex structures with multiple counterparties and transactions.
Risks are mitigated in structuring and contracting
• Power production risks such as underproduction or overproduction are handled as they would standalone
• Structural risks such as a counterparty failing are handled through contracting; in a worst-case scenario, the transaction legs terminate and CCCE returns where it started - with a PPA • Debt issued is non-recourse and ratings agencies do not view it as an explicit CCCE responsibility • Key structural risks are choice of PPAs and choice of Counterparty • A full catalog of risks will be provided when CCCE presents a potential transaction • Prepay transactions are typically for an initial term of 5 years, with the debt being refinanced at the end of that term. Savings should be considered for the initial term
• Prepay demand is driven by yields and tax-exempt investor interest • Among CCAs, Marin Clean Energy, Silicon Valley Clean Energy, and East Bay Community Energy have executed $2 billion in prepay transactions • EBCE is pursuing a second prepay transaction
• Additional CCAs are known to be exploring or preparing prepays � Central Coast
Community
Energy 14
• CCCE is considering a PPA prepay with the goal of being ready for market by October 2022, subject to Policy Board approval
• Up to 5 PPAs with annual volume of 930 GWh and $500+ million in total contract value •
Initial term of 5 years, depending on market conditions • Financial Advisor contracted
• RFI for banking partners
• RFP for law firms
� Central Coast
Community
Energy 1s
en
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E
E
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• CCCE is developing three key strategic financial initiatives in 2022 to deliver value for customers
• Policy Board support is key to unlocking that value
� Central Coast
Community
Energy 11
Policy Board of Directors
Wednesday, February 16, 2022
9:00AM
Central Coast Community Energy
70 Garden Court, Suite 300
Monterey, CA 93940
MINUTES
The meeting was called to order at 9:00am with 1 member attending in person and 13 members attending via teleconference pursuant to AB 361 and a quorum established.
Directors Present in-person: Chair McShane
Directors Present via teleconference: Adams, Brooks, Kosmicki, Marx, McPherson, Meyers, Morales, Patino, Tomlinson, Velazquez, Waage, Vice Chair Williams
Directors Absent: Carbone, Nomura, Orona
The Chair opened the public comment period for items not listed on the agenda.
The following individual(s) addressed the Board.
Michael Saint
The Chair closed public comment period.
CONSENT AGENDA
The Chair opened the public comment period.
There were no public comments.
The Chair closed public comment period.
MOTION: Moved by Director McPherson, Seconded by Director Kosmicki to approve the Consent Agenda.
ACTION: The Motion Carried with a roll call vote: 14/0/3 AYES: Adams, Brooks, Kosmicki, Marx, McPherson, Meyers, Morales, Patino, Tomlinson, Velazquez, Waage, Vice Chair Williams, Chair McShane
NOES: None
ABSENT: Carbone, Nomura, Orona
1. Approved Minutes from the January 21, 2022, Meeting of the Policy Board of Directors.
2. Found, Pursuant to AB 361 and in order for the Policy Board of Directors to Continue Meeting Remotely, that the COVID-19 Pandemic State of Emergency Declared by Governor Newson is Still In Effect; The Policy Board of Directors has Reconsidered the Circumstances if the State of 46 of 204
Emergency; and the Monterey County Health Officer Continues to Recommend Social Distancing Measures for Meetings of Legislative Bodies.
3. Approved Community Advisory Council’s Selection Committee’s Nomination for San Benito County Seat.
4. Approved Selection of General Counsel, Brian Kimball.
5. Regulatory and Legislative Quarterly Update (Information Only)
6. Treasurer Report (Information Only)
REGULAR AGENDA
7. Community Advisory Council Report
Chair opened public comment period.
There were no public comments.
Chair closed public comment period.
ACTION: Discussion Item; No Action Required
8. Operations Board Report
Chair opened public comment period.
There were no public comments.
Chair closed public comment period.
ACTION: Discussion Item; No Action Required
9. CEO’s Report
(a) Staff Updates
(b) 2021 Enrollment Updates
(c) Front of the Meter Energy Storage
(d) Percentage of Income Payment Plan (PIPP) Pilot
(e) Spring Workshop
Chair opened public comment period.
There were no public comments.
Chair closed public comment period.
ACTION: Discussion Item; No Action Required
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10. Approved Amendments to the Community Advisory Council Bylaws Chair opened public comment period.
The following individual(s) addressed the Board.
Seth Capron
Norm Groot
Rebecca Garcia
Chuck Huddleston
Alex Lantsberg
Michael Chiacos
Brett Garrett
Richard Stedman
Piet Canin
Carole Mintzer
Tim Frank
Heidi Harmon
Jill ZamEk
Ry Brennan
Michael Termini
John Freeman
Eric Veium
Benjamin Eichert
Michael Saint
Jim Lutz
John Smigelski
Beverly DesChaux
John Hughes
Leslie Austin
Rita Casaverde
Katie Davis
Bruce Severance
Woody Hastings
Chair closed public comment period.
MOTION: Moved by Director Adams, Seconded by Director Meyers to approve the substitute motion for the Board to take a one-month hiatus and reconvene after Staff meets with the CAC to resolve.
ACTION: The Motion Failed with a roll call vote: 8/8/1
AYES: Adams, Brooks, Kosmicki, Marx, Morales, Quiroz-Carter, Velazquez NOES: Carbone, McPherson, Orona, Patino, Tomlinson, Waage, Vice Chair Williams, Chair McShane ABSENT: Nomura
MOTION: Moved by Director McPherson, Seconded by Director Patino to approve Staff recommendation.
ACTION: The Motion Failed with a roll call vote: 8/8/1
AYES: Carbone, McPherson, Orona, Patino, Tomlinson, Waage, Vice Chair Williams, Chair McShane NOES: Adams, Brooks, Kosmicki, Marx, Morales, Quiroz-Carter, Velazquez ABSENT: Nomura
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MOTION: Moved by Director Velazquez, Seconded by Director Marx to create an Ad Hoc committee consisting of the Policy Board Chair and Vice Chair, Operations Board Chair and Vice Chair, CAC Chair and Vice Chair with a mediator to resolve. Friendly Amendment accepted to recuse the Policy Board Chair and replace with Director Adams.
ACTION: The Motion carried with a roll call vote: 12/4/1 AYES: Adams, Carbone, Marx, McPherson, Meyers, Orona, Patino, Tomlinson, Velazquez, Waage, Vice Chair Williams, Chair McShane
NOES: Brooks, Kosmicki, Morales, Quiroz-Carter
ABSENT: Nomura
11. Received an Update Regarding FY 21-22 Energy Programs Portfolio and FY 20-21 Energy Programs Portfolio Evaluation and Report Development Process Chair opened public comment period.
There were no public comments.
Chair closed public comment period.
ACTION: Discussion Item; No Action Required
12. Received an Update Regarding Member Agency Services Chair opened public comment period.
There were no public comments.
Chair closed public comment period.
ACTION: Discussion Item; No Action Required
Recessed into closed session at 11:54 am; Counsel confirmed that there would be no reportable action taken.
CLOSED SESSION
13. Closed Session Under Government Code Section 54950, Relating to the following items (a) Conference with Real Property Negotiators Under Government Code Section 54956.8 Property:
1352 Lighthouse Avenue, Pacific Grove, CA 93950 /CCCE Negotiator: Tom Habashi/ Negotiating Parties: U.S. General Services Administration, Office of Real Property Utilization and Disposal/ Under Negotiation: Price and Terms
(b) Pursuant to Government Code section 54957(b), the Board will confer regarding performance evaluation for the Chief Executive Officer
Board Member Reports & Comments
Adjournment 12:33 pm
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Staff Report Item 4
TO: CCCE Policy Board of Directors
FROM: Tom Habashi, Chief Executive Officer
SUBJECT: Consider Finding, Pursuant to AB 361 and in order for the Policy Board of Directors to Continue Meeting Remotely, that the COVID-19 Pandemic State of Emergency Declared by Governor Newsom is Still In Effect; The Policy Board of Directors has Reconsidered the Circumstances of the State of Emergency; and the Monterey County Health Officer Continues to Recommend Social Distancing Measures for Meetings of Legislative Bodies (Action Item) DATE: June 15, 2022
RECOMMENDATION:
This recommends the Policy Board (“Board”) find, pursuant to AB 361 and for the Board to continue meeting remotely, that the COVID-19 pandemic State of Emergency declared by Governor Newsom is still in effect; the Board has considered the circumstances of the State of Emergency; and the Monterey County Health Officer continues to recommend social distancing measures for meetings of legislative bodies.
BACKGROUND:
On September 16, 2021, Governor Newsom signed AB 361. This legislation amends the Brown Act to allow Brown Act bodies to meet via teleconference during a proclaimed state of emergency in accordance with teleconference procedures established by AB 361 rather than under the Brown Act's more narrow standard rules for teleconference meetings.
DISCUSSION/ANALYSIS:
AB 361 provides that if a state or local health official recommends social distancing, a legislative body may meet remotely after September 30, 2021, provided that the legislative body finds 1) the Governor's proclaimed state of emergency is still in effect; 2) the legislative body has reconsidered the circumstances of the state of emergency, and 3) either the Monterey County Health Officer continues to 50 of 204
recommend social distancing measures for meetings of legislative bodies or the state of emergency continues to directly impact the ability of the members to meet in person.
The Monterey County Health Officer has recommended social distancing measures for meetings of legislative bodies. To continue meeting remotely, the Boards must make the findings outlined above.
Accordingly, staff recommends making the appropriate findings. This action will be required every 30 days to keep meeting remotely. A special meeting may be necessary for that purpose.
FISCAL IMPACT:
There is no fiscal impact associated with this action.
CONCLUSION:
The Board’s consideration and finding that the COVID-19 pandemic State of Emergency declared by Governor Newsom is still in effect; the Board has reconsidered the circumstances of the State of Emergency; and the Monterey County Health Officer continues to recommend social distancing measures for meetings of legislative bodies will allow the Board to continue meeting remotely under the procedures established by AB 361.
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Staff Report Item 5
TO: CCCE Policy Board of Directors
FROM: Tom Habashi, Chief Executive Officer
SUBJECT: Appoint Jaya Bajpai as CCCE's Treasurer (Action Item) DATE: June 15, 2022
RECOMMENDATION:
Appoint Jaya Bajpai, Chief Executive Officer, to serve as Central Coast Community Energy (“CCCE”) Treasurer.
BACKGROUND:
CCCE’s Policy Board is responsible for appointing a Treasurer to organize, manage, and oversee the depository, custody, treasury, and financial matters of CCCE pursuant to CA Government Code Section 6505 and CCCE’s own Joint Exercise of Powers Agreement and Operating Rules and Regulations. The Treasurer role had been held by Tiffany Law, CCCE Chief Financial Officer (CFO), until her departure from CCCE in October 2021. CCCE held an open recruitment for a new CFO, appointing Jaya Bajpai to the role effective February 1, 2022. Mr. Bajpai has 22 years of diverse experience in the energy industry, and he is well qualified to hold the Treasurer position at CCCE.
FISCAL IMPACT:
There is no fiscal impact associated with this appointment.
CONCLUSION:
The Treasurer position is currently vacant. Chief Financial Officer Mr. Bajpai has demonstrated his competence and qualifications for the Treasurer position. 52 of 204
Staff Report Item 6
TO: Central Coast Community Energy Policy Board of Directors FROM: Tom Habashi, Chief Executive Officer
SUBJECT: Adopt the Financial Statements for the Fiscal Year 2020/2021 as Prepared by CCCE and Maher Accountancy, Inc. (Action Item)
DATE: June 15, 2022
RECOMMENDATION:
This recommends that the Policy Board adopts the Year-End Financial Statements prepared by CCCE and Maher Accountancy, Inc.
DISCUSSION:
Central Coast Community Energy’s fourth year of operation was concluded on September 30, 2021. The attached Year-End Financial Statement for FY 2020/21 was prepared by CCCE and Maher Accountancy, Inc. They have been preliminarily reviewed by the independent auditor Pisenti & Brinker, LLP (“P&B”).
On March 23, 2022, the Audit & Finance Committee received the Year-End Financial Statements for FY 2020/21 and a presentation from P&B discussing the status of the audit and the auditors’ preliminary unqualified (“clean”) opinion on CCCE’s financials for the fiscal years ended September 30, 2021. The Audit & Finance Committee recommended forwarding them to the Policy Board for their June 15, 2022, meeting.
CCCE is required to perform an annual financial audit at the conclusion of each fiscal year. Upon Policy Board’s adoption of the Year-End Financial Statements for FY 2020/21, CCCE will issue a management letter and the auditors will finalize their audit report in an Independent Auditors’ Report. The final audited financials will be provided to the Policy Board at their next meeting.
ATTACHMENT(S):
1. Central Coast Community Energy Year-End Financial Statement for September 30, 2021
2. Pisenti & Brinker, LLP Report
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54 of 204
CENTRAL COAST COMMUNITY ENERGY
YEARS ENDED SEPTEMBER 30, 2021 AND 2020
TABLE OF CONTENTS
Independent Auditors Report
... 1
Managements Discussion and Analysis
... 3
Basic Financial Statements:
Statements of Net Position
10 Statements of Revenues, Expenses and Changes in Net Position
11 Statements of Cash Flows
. 12
Notes to the Basic Financial Statements
... 14
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CENTRAL COAST COMMUNITY ENERGY
MANAGEMENTS DISCUSSION AND ANALYSIS
YEARS ENDED SEPTEMBER 30, 2021 AND 2020
3 The Managements Discussion and Analysis provides an overview of Central Coast Community Energys (CCCE) financial activities as of and for the years ended September 30, 2021 and 2020.
The information presented here should be considered in conjunction with the audited financial statements.
BACKGROUND
CCCEs formation was made possible in 2002 by the passage of California Assembly Bill 117, which enabled communities to purchase power on behalf of their residents and businesses as an alternative to legacy Investor-Owned Utilities (IOU).
CCCE is a Community Choice Aggregator (CCA) established on February 21, 2017 pursuant to Public Utilities Code Section 366.2 and operating as a Joint Powers Authority (JPA) pursuant to Government Code section 6500 et seq. CCCE currently serves residential, commercial and agricultural/industrial customers in communities located within its service area. 1 CCCE serves approximately 430,000 customer accounts forecast to consume 5,000 gigawatt hours (GWh) per year. CCCE is committed to charging competitive retail rates, offering innovative energy programs to facilitate electrification and reducing greenhouse gas (GHG) emissions through long-term contracts for existing and new utility scale renewable electricity generation. CCCE has established an innovative procurement strategy to accelerate the reduction of GHG emissions, committing CCCE to developing a resource mix which delivers clean renewable energy for 60% of CCCE demand by the year 2025 and 100% of CCCE demand by the year 2030.
CCCE is governed by a Policy Board and an Operations Board. The Policy Board consists of elected officials from member jurisdictions, while the Operations Board consists of senior staff from those jurisdictions. The Policy Board provides guidance and approval in strategic planning and goal setting, budgets, rates, large capital expenditures, and financing. The Operations Board provides guidance and approval on contracts, agreements, and policies that govern day-to-day operations. CCCE has the rights and powers to set rates for its services, incur debt, and issue bonds or other obligations.
1 As of September 30, 2021, CCCEs members included the Cities of Arroyo Grande, Capitola, Carmel-by-the-Sea, Del Rey Oaks, Gonzales, Greenfield, Grover Beach, Guadalupe, Hollister, Marina, Monterey, Morro Bay, Pacific Grove, Paso Robles, Pismo Beach, Salinas, San Juan Bautista, San Luis Obispo, Sand City, Santa Cruz, Santa Maria, Scotts Valley, Seaside, Soledad Solvang and Watsonville as well as the Counties of Monterey, San Benito and Santa Cruz and parts of Santa Barbara County. 56 of 204
CENTRAL COAST COMMUNITY ENERGY
MANAGEMENTS DISCUSSION AND ANALYSIS
YEARS ENDED SEPTEMBER 30, 2021 AND 2020
4 Financial Reporting
CCCE presents its financial statements as an enterprise fund under the economic resources measurement focus and accrual basis of accounting, in accordance with generally accepted accounting principles (GAAP) for proprietary funds, as prescribed by the Governmental Accounting Standards Board (GASB).
Contents Of This Report
This report is divided into the following sections:
Managements discussion and analysis, which is an overview of the financial operations The Basic Financial Statements:
o The Statements of Net Position include all of CCCEs assets, liabilities, and net position and provide information about the nature and amount of resources and obligations at a specific point in time.
o The Statements of Revenues, Expenses, and Changes in Net Position report CCCEs revenue and expenses for the years shown.
o The Statements of Cash Flows report the cash provided and used by operating activities, as well as other sources and uses, such as capital asset acquisitions and investing activities.
o Notes to the Basic Financial Statements provide additional details and information related to the basic financial statements.
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CENTRAL COAST COMMUNITY ENERGY
MANAGEMENTS DISCUSSION AND ANALYSIS
YEARS ENDED SEPTEMBER 30, 2021 AND 2020
5 FINANCIAL HIGHLIGHTS
Summary of Assets, Liabilities and Net Position
The following table is a summary of CCCEs assets, liabilities, and net position, and a discussion of significant changes for the years ended September 30:
2021 2020 2019
Current assets $ 229,102,332 $ 194,879,069 $ 157,058,261 Noncurrent assets
Capital assets, net 328,942 314,877 226,242
Other noncurrent assets 79,280 123,182 121,055
Total noncurrent assets 408,222 438,059 347,297
Total assets 229,510,554 195,317,128 157,405,558 Current liabilities 32,490,845 36,578,478 37,708,844 Noncurrent liabilities 7,031,250 - - Total liabilities 39,522,095 36,578,478 37,708,844 Net position
Investment in capital assets 328,942 314,877 226,242
Restricted for security collateral 294,000 1,500,000 3,100,000 Unrestricted 189,365,517 156,923,773 116,370,472
Total net position $ 189,988,459 $ 158,738,650 $ 119,696,714 Current Assets
Current assets were approximately $229,102,000 at the end of 2021, and consist of cash, accounts receivable, accrued revenue, and energy settlements receivable. Accrued revenue is revenue from energy delivered but not invoiced to customers. Accounts receivable reflects energy delivered and invoiced but not paid for by customers. Total current assets increased in 202 and in 202 as a result of CCCEs operating surplus for the year.
Capital Assets
Capital assets were approximately $329,000, net of accumulated depreciation, primarily reflecting the acquisition of furniture and equipment for employees. The changes each year represent furniture and equipment and leasehold improvement acquisitions, reduced by depreciation expense.
CCCE does not own generation, transmission or distribution assets. 58 of 204
CENTRAL COAST COMMUNITY ENERGY
MANAGEMENTS DISCUSSION AND ANALYSIS
YEARS ENDED SEPTEMBER 30, 2021 AND 2020
6 Other Noncurrent Assets
Other noncurrent assets of $79,000 as of September 30, 2021 consist of deposits for regulatory and other operating purposes.
Current Liabilities
Current liabilities of $32,491,000 as of September 30, 2021 consist primarily of the cost of electricity delivered to customers that is not yet due to be paid by CCCE. Current liabilities also include amounts owed for trades payables, personnel costs, taxes and surcharges owed to other governments, and deposits received from suppliers. Current liabilities remained stable year-over-year.
Noncurrent Liabilities
Some contracts require the supplier to provide CCCE with a security deposit. These deposits are held by CCCE until certain contract milestones are met or contracts are completed. As part of its risk management policy, CCCE requires energy suppliers to post collateral deposits in some cases. During 2021, noncurrent liabilities increased due to CCCE held collateral deposits with terms exceeding one year.
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CENTRAL COAST COMMUNITY ENERGY
MANAGEMENTS DISCUSSION AND ANALYSIS
YEARS ENDED SEPTEMBER 30, 2021 AND 2020
7 Summary of Revenues, Expenses, and Changes in Net Position The following table is a summary of CCCEs results of operations and a discussion of significant changes for the years ended September 30:
2021 2020 2019
Operating revenues $ 287,931,441 $ 233,915,415 $ 238,322,420 Nonoperating revenues 702,036 2,417,363 1,320,685
Total income 288,633,477 236,332,778 239,643,105
Operating expenses 257,383,668 197,290,842 160,425,423
Change in net position $ 31,249,809 $ 39,041,936 $ 79,217,682 Operating Revenues
Operating revenue from electricity sales increased approximately $59,400,000 from 2020 to 2021 due primarily to the January 2021 addition of approximately 100,000 new customer accounts in the cities of Del Rey Oaks, Arroyo Grande, Grover Beach, Paso Robles, Pismo Beach, Guadalupe, Santa Maria, and Solvang. In 2020, CCCE recognized $5,400,000 in revenue from damages that did not recur in 2021. Total operating revenue increased approximately $54,000,000 from 2020 to 2021.
Operating Expenses
Operating expenses increased approximately $60,100,000 from 2020 to 2021. CCCEs largest operating expense continues to be the purchase of electricity delivered to its customers. CCCE purchases energy products from markets and is developing a balanced diversified renewable power portfolio. The cost of energy market purchases increased from 2020 to 2021 due to an increase in the number of customers and rising market prices.
Change in Net Position
CCCEs change in net position was $31,250,000 in 2021, a decrease from $39,042,000 in 2020.
The decrease was driven by a combination of lower average customer rates and higher costs for energy products.
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CENTRAL COAST COMMUNITY ENERGY
MANAGEMENTS DISCUSSION AND ANALYSIS
YEARS ENDED SEPTEMBER 30, 2021 AND 2020
8 ECONOMIC OUTLOOK
2021 was a year of continued growth and resilience in the face of the COVID-19 pandemic. In 2021, CCCE began service to 8 new cities and portions of Santa Barbara County. It now serves over 430,000 residential, commercial and agricultural/industrial customers in an 8,000 square mile service area spanning five counties: Santa Cruz, Monterey, San Benito, San Luis Obispo, and Santa Barbara.
Operating revenues from electricity sales grew approximately $60,000,000 driven primarily by the addition of 100,000 new members. The cost of energy, CCCEs dominant cost, increased approximately $56,000,000, a combination of rising energy market prices and higher volumes to serve new members.
CCCE has invested significantly in developing a portfolio of clean renewable energy resources at competitive prices. Exposure to energy market price fluctuations is expected to decrease over the next five years as these projects begin commercial operations.
CCCEs non-energy costs which include contract services, staff compensation, general & administrative expenses, were under 6% of operating revenues, reflecting its focus on delivering value for customers.
CCCEs growing power portfolio is expected to lower the cost and volatility of the energy it supplies to customers - helping it maintain a robust financial position. In keeping with its mission, CCCE will be passing through these benefits to customers in the form of lower rates which should keep CCCE competitive with legacy Investor-Owned Utility (IOU) Rates. To effectuate this, in 2021 CCCEs Policy Board approved a transition to a Cost of Service (COS) rate model. Historically, CCCE followed the standard CCA practice of setting its rates as a percentage discount to IOU rates. The COS approach sets rates based on CCCEs revenue requirements and factors in its growing power supply portfolio. COS-based rates will go into effect in CCCEs PG&E service area in March 2022. A COS study will be conducted in 2022 for CCCEs SCE service area.
CCCE has not been immune to the impact of the pandemic. Supply chain and inflationary challenges have delayed power projects and increased costs. The cost of living continues to increase rapidly in CCCEs Monterey headquarters region, which has historically been attractive due to its natural beauty, temperate climate, recreational opportunities, and proximity to the San Francisco Bay Area. This makes it challenging to continue attracting and retaining the staff necessary to deliver the value customers expect.
Despite these challenges, the financial position and foundation remains strong and CCCE is positioned for continued success.
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CENTRAL COAST COMMUNITY ENERGY
MANAGEMENTS DISCUSSION AND ANALYSIS
YEARS ENDED SEPTEMBER 30, 2021 AND 2020
9 REQUEST FOR INFORMATION
This financial report is designed to provide CCCEs customers and creditors with a general overview of the organizations finances and to demonstrate CCCEs accountability for the funds under its stewardship.
Please address any questions about this report or requests for additional financial information to 70 Garden Court, Suite 300, Monterey, CA 93940.
Respectfully submitted,
Tom Habashi, Chief Executive Officer
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BASIC FINANCIAL STATEMENTS
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CENTRAL COAST COMMUNITY ENERGY
The accompanying notes are an integral part of these financial statements. 10
STATEMENTS OF NET POSITION
SEPTEMBER 30, 2021 AND 2020
2021 2020
Current assets
Cash and cash equivalents $ 159,444,623 $ 146,400,665
Accounts receivable, net of allowance 37,376,299 27,579,594 Accrued revenue 20,011,097 17,158,246
Energy settlements receivable 7,856,108 10,391
Other receivables 919,329 235,305
Prepaid expenses 1,538,193 861,060
Deposits 1,662,683 1,133,808
Restricted cash 294,000 1,500,000
Total current assets 229,102,332 194,879,069
Noncurrent assets
Capital assets, net of depreciation 328,942 314,877
Deposits 79,280 123,182
Total noncurrent assets 408,222 438,059
Total assets 229,510,554 195,317,128
Current liabilities
Accrued cost of electricity 28,649,424 32,123,426
Accounts payable 1,231,718 478,731
Other accrued liabilities 844,778 976,743
Customer rebate liabilities 306,291 315,719
User taxes and energy surcharges due to other governments 1,458,634 1,497,359 Security deposits - energy suppliers - 1,186,500
Total current liabilities 32,490,845 36,578,478
Noncurrent liabilities
Security deposits - energy suppliers 7,031,250 - Total liabilities 39,522,095 36,578,478 Investment in capital assets 328,942 314,877
Restricted for security collateral 294,000 1,500,000
Unrestricted 189,365,517 156,923,773
Total net position $ 189,988,459 $ 158,738,650
NET POSITION
ASSETS
LIABILITIES
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CENTRAL COAST COMMUNITY ENERGY
The accompanying notes are an integral part of these financial statements. 11
STATEMENTS OF REVENUES, EXPENSES
AND CHANGES IN NET POSITION
YEARS ENDED SEPTEMBER 30, 2021 AND 2020
2021 2020
OPERATING REVENUES
Electricity sales, net $ 287,931,441 $ 228,515,415
Liquidated damages - 5,400,000
Total operating revenues 287,931,441 233,915,415
OPERATING EXPENSES
Cost of electricity 241,714,336 185,543,815
Contract services 7,125,240 6,077,542
Staff compensation 5,875,005 4,368,744
General and administration 2,565,883 1,193,093
Depreciation 103,204 107,648
Total operating expenses 257,383,668 197,290,842
Operating income 30,547,773 36,624,573
NONOPERATING REVENUES
Interest income 702,036 2,356,175
Miscellaneous income - 61,188
Total nonoperating revenues 702,036 2,417,363
CHANGE IN NET POSITION 31,249,809 39,041,936
Net position at beginning of year 158,738,650 119,696,714 Net position at end of year $ 189,988,459 $ 158,738,650 65 of 204
CENTRAL COAST COMMUNITY ENERGY
The accompanying notes are an integral part of these financial statements. 12
STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30, 2021 AND 2020
2021 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers $ 281,231,391 $ 235,640,742
Receipts from liquidated damages - 5,400,000
Receipts from suppliers and energy settlements 16,752,388 4,494,836 Other operating receipts - 61,188
Payments to suppliers for electricity (265,819,342) (184,974,504) Payments for other goods and services (9,339,942) (7,776,318) Payments for staff compensation (5,559,337) (4,131,027) Payments of taxes and energy surcharges to other governments (5,997,661) (5,818,435) Net cash provided by operating activities 11,267,497 42,896,482
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Payments to acquire capital assets (131,575) (184,554)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest income received 702,036 2,356,175
Net change in cash and cash equivalents 11,837,958 45,068,103 Cash and cash equivalents at beginning of year 147,900,665 102,832,562 Cash and cash equivalents at end of year $ 159,738,623 $ 147,900,665 Reconciliation to the Statements of Net Position
Cash and cash equivalents (unrestricted) $ 159,444,623 $ 146,400,665 Restricted cash 294,000 1,500,000
Cash and cash equivalents $ 159,738,623 $ 147,900,665
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CENTRAL COAST COMMUNITY ENERGY
The accompanying notes are an integral part of these financial statements. 13
STATEMENTS OF CASH FLOWS (CONTINUED)
YEARS ENDED SEPTEMBER 30, 2021 AND 2020
2021 2020
Operating income $ 30,547,773 $ 36,624,573
Adjustments to reconcile operating income to net
cash provided by operating activities:
Depreciation expense 103,204 107,648
Revenue adjusted for allowance for uncollectible accounts 2,108,070 2,478,816 Revenue from miscellaneous income - 61,188
(Increase) decrease in:
Accounts receivable (11,904,775) 7,575,312
Accrued revenue (2,852,851) (1,431,478)
Energy settlements receivable (7,845,717) 32,876
Other receivables (684,024) (228,253)
Prepaid expenses (677,133) (520,670)
Deposits (484,973) (754,110)
Increase (decrease) in:
Accrued cost of electricity (3,474,002) 6,459,348
Accounts payable 767,293 (685,273)
Other accrued liabilities (131,965) 473,086
Customer rebate liabilities (9,428) (7,371,551)
User taxes and energy surcharges due to other governments (38,725) 55,795 Security deposits - energy suppliers 5,844,750 19,175
Net cash provided by operating activities $ 11,267,497 $ 42,896,482
RECONCILIATION OF OPERATING INCOME TO NET
CASH PROVIDED BY OPERATING ACTIVITIES
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CENTRAL COAST COMMUNITY ENERGY
NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2021 AND 2020
14 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
Central Coast Community Energy (CCCE) is a Joint Powers Authority created on February 21, 2017, and its jurisdictions consist of the following local governments as of September 30, 2021:
Counties Cities and Towns
Monterey Arroyo Grande Pacific Grove
San Benito Capitola Paso Robles
Santa Barbara Carpinteria Pismo Beach
Santa Cruz Carmel Salinas
Del Rey Oaks San Juan Bautista
Goleta San Luis Obispo
Gonzales Sand City
Greenfield Santa Cruz
Grover Beach Santa Maria
Guadalupe Scotts Valley
Hollister Seaside
Marina Soledad
Monterey Solvang
Morro Bay Watsonville
CCCE is separate from and derives no financial support from its members. CCCE is governed by two Boards, a Policy Board and an Operations Board. Each Board is comprised of 17 members with 17 alternates representing the participating communities. Some of the 17 members represent more than one jurisdiction Policy Board Members are elected officials from CCCE member communities. Operations Board Members are executives leading the member cities and counties.
CCCE was formed to acquire retail electricity for the residents and businesses within its members jurisdictions, study, promote, conduct, operate, and manage energy and energy-related climate change programs, and to exercise all other powers necessary and incidental to accomplishing these objectives. A core function of CCCE is to provide electric service that includes the use of renewable sources under the Community Choice Aggregation Program under California Public Utilities Code Section 366.2.
CCCE began its energy delivery operations in March 2018. Electricity is acquired from commercial suppliers and delivered through existing physical infrastructure and equipment managed by Pacific Gas and Electric Company (PG&E).
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CENTRAL COAST COMMUNITY ENERGY
NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2021 AND 2020
15 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
BASIS OF ACCOUNTING
CCCEs financial statements are prepared in accordance with generally accepted accounting principles (GAAP). The Governmental Accounting Standards Board (GASB) is responsible for establishing GAAP for state and local governments through its pronouncements.
CCCEs operations are accounted for as a governmental enterprise fund and are reported using the economic resources measurement focus and the accrual basis of accounting, similar to business enterprises. Accordingly, revenues are recognized when they are earned; and expenses are recognized at the time liabilities are incurred. Enterprise fund type operating statements present increases (revenues) and decreases (expenses) in total net position. Reported net position is segregated into three categories: investment in capital assets, restricted, and unrestricted.
When both restricted and unrestricted resources are available for use, it is CCCEs policy to use restricted resources first, and then unrestricted resources as they are needed.
CASH AND CASH EQUIVALENTS
For purposes of the Statements of Cash Flows, CCCE defines cash and cash equivalents to include cash on hand and demand deposits. CCCE has cash that is restricted under various security agreements. This is reported as restricted cash on the Statements of Net Position and is included in cash and cash equivalents for the purpose of the Statements of Cash Flows.
PREPAID EXPENSES AND DEPOSITS
Contracts to purchase energy may require CCCE to provide the supplier with advanced payments or security deposits. Deposits are generally held for the term of the contract and are classified as current or noncurrent assets depending on the length of time the deposits will be outstanding. While these energy contract-related deposits make up most of this item, other components of prepaid expenses and deposits include those for regulatory and other operating purposes.
CAPITAL ASSETS AND DEPRECIATION
CCCEs policy is to capitalize furniture and equipment valued over $1,000 that is expected to be in service for over one year. Depreciation is computed according to the straight-line method over estimated useful lives of three years for electronic equipment and seven years for furniture and leasehold improvements. CCCE does not own any electric generation, transmission or distribution assets.
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CENTRAL COAST COMMUNITY ENERGY
NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2021 AND 2020
16 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
NET POSITION
Net position is presented in the following components:
Investment in capital assets: This component of net position consists of capital assets, net of accumulated depreciation and reduced by outstanding borrowings that are attributable to the acquisition, construction, or improvement of those assets. CCCE did not have any outstanding borrowings as of September 30, 2021 or 2020.
Restricted for Security Collateral: This component of net position consists of constraints placed on net asset use through external constraints imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments or constraints imposed by law through constitutional provisions or enabling legislation.
Unrestricted: This component of net position consists of net position that does not meet the definition of investment in capital assets or restricted for security collateral.
OPERATING AND NONOPERATING REVENUE
Operating revenues include revenue derived from the provision of energy to customers. Interest income and miscellaneous income are considered non-operating revenue.
REVENUE RECOGNITION
CCCE recognizes revenue on an accrual basis. This includes invoices issued to customers during the reporting period and electricity estimated to have been delivered, but not yet billed.
Management estimates that a portion of the billed amounts will be uncollectible. Accordingly, an allowance for uncollectible accounts has been recorded and revenues are reported net of this allowance.
OPERATING AND NON-OPERATING EXPENSES
Operating expenses include the cost of electricity, data management expenses, IOU service fees, consultant and other professional fees, legal, staff compensation and benefits, general and administrative expenses and depreciation on capital assets. Expenses not meeting this definition are reported as nonoperating expenses.
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CENTRAL COAST COMMUNITY ENERGY
NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2021 AND 2020
17 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
ELECTRICAL POWER PURCHASED
During the normal course of business, CCCE purchases electrical power from numerous suppliers. Electricity costs include the cost of energy and capacity arising from contracts with energy suppliers as well as generation credits, and load and other charges arising from CCCEs participation in the California Independent System Operators (CAISO) centralized market. The cost of electricity and capacity is recognized as Cost of Electricity in the Statements of Revenues, Expenses and Changes in Net Position.
To comply with the State of Californias Renewable Portfolio Standards (RPS), CCCE acquires RPS eligible renewable energy evidenced by Renewable Energy Certificates (Certificates) recognized by the Western Renewable Energy Generation Information System (WREGIS).
CCCE obtains Certificates with the intent to retire them and does not sell or build surpluses of Certificates with a profit motive. An expense is recognized at the point that the cost of the Certificate is due and payable to the supplier.
CCCE purchases capacity commitments from qualifying generators to comply with the California Public Utility Commissions Resource Adequacy Program. The goals of the Resource Adequacy Program are to provide sufficient resources to the CAISO to ensure the safe and reliable operation of the grid in real-time and to provide appropriate incentives for the siting and construction of new resources needed for reliability in the future.
STAFFING COSTS
CCCE pays employees semi-monthly and fully pays its obligation for health benefits and contributions to its defined contribution retirement plan each month. CCCE is not obligated to provide post-employment healthcare or other fringe benefits, and accordingly, no related liability is recorded in these financial statements. CCCE provides compensated time off, and the related liability is recorded in these financial statements.
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CENTRAL COAST COMMUNITY ENERGY
NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2021 AND 2020
18 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
INCOME TAXES
CCCE is a Joint Powers Authority under the provision of the California Government Code and is not subject to federal or state income or franchise taxes.
ESTIMATES
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
RECLASSIFICATIONS
Certain amounts in the prior-year financial statements have been reclassified for comparative purposes to conform to the presentation of the current-year financial statements. These reclassifications did not result in any change in previously reported net position or change in net position.
2. CASH AND CASH EQUIVALENTS
CCCE maintains its cash in interest and non-interest-bearing accounts. California Government Code Section 16521 requires that banks collateralize amounts of public funds in excess of the Federal Deposit Insurance Corporation (FDIC) limit of $250,000 by 110% of the amount of the deposit. CCCEs investment policy permits the investment of funds in depository accounts, certificates of deposit, the California Local Agency Investment Funds (LAIF), United States Treasury obligations, and other investments provided in the general guidelines of California Government Code sections 53600, et seq. As of September 30, 2021, all of CCCEs cash and cash equivalents were held in depository accounts or certificates of deposit. 72 of 204
CENTRAL COAST COMMUNITY ENERGY
NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2021 AND 2020
19 3. ACCOUNTS RECEIVABLE AND ENERGY SETTLEMENTS RECEIVABLE
ACCOUNTS RECEIVABLE
Accounts receivable was as follows as of September 30:
2021 2020
Accounts receivable from customers $ 43,825,791 $ 31,921,016 Allowance for uncollectible accounts (6,449,492) (4,341,422) Net accounts receivable $ 37,376,299 $ 27,579,594
The majority of account collections will occur within the first few months following customer invoicing. CCCE estimates that a portion of the billed accounts will not be collected. CCCE continues collection efforts on delinquent accounts in excess of de minimis balances regardless of the age of the account. The allowance for uncollectible accounts at the end of a period includes amounts billed during the current and prior fiscal years.
ENERGY SETTLEMENTS RECEIVABLE
CCCE receives generation scheduling and other services from a scheduling coordinator registered with the CAISO. Energy settlements due from the scheduling coordinator for the years ended September 30, 2021 and 2020 were approximately $7,856,000 and $10,000, respectively.
4. CAPITAL ASSETS
Capital asset activity for the years ended September 30, 2021 and 2020 was as follows:
Balances at:
Furniture &
Equipment
Leasehold
Improvements
Accumulated
Depreciation Total
September 30, 2019 362,800 $ $ 2,823 $ (139,381) 226,242$ Additions 125,837 70,446 (107,648) 88,635
September 30, 2020 488,637 73,269 (247,029) 314,877
Additions 109,795 7,474 (103,204) 14,065
September 30, 2021 598,432 $ $ 80,743 $ (350,233) 328,942$ 73 of 204
CENTRAL COAST COMMUNITY ENERGY
NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2021 AND 2020
20 5. DEFINED CONTRIBUTION RETIREMENT PLAN
CCCE provides retirement benefits to eligible employees through a 401(a) Retirement Plan (Plan). The Plan is a defined contribution (Internal Revenue Code 401(a)) retirement plan established to provide benefits at retirement to employees of certain qualified employers admitted by the Plan. The Plan is administered by the Public Agency Retirement System (PARS). As of September 30, 2021, there were 37 plan participants. CCCE is required to contribute 10% of covered payroll as a match to required employee contributions. CCCE contributed approximately $439,000 and $331,000 for the years ended September 30, 2021 and 2020, respectively. Plan provisions and contribution requirements as they apply to CCCE are established and may be amended by the Board of Directors. CCCE has elected out of the Social Security system for employees eligible for the Plan. CCCE also provides a 457(b) Retirement Plan where employees can make tax deferred contributions.
6. RISK MANAGEMENT
CCCE is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; and errors and omissions. During the year, CCCE purchased insurance policies from investment-grade commercial carriers to mitigate risks that include those associated with earthquakes, theft, general liability, errors and omissions, and property damage. CCCE has general liability coverage of $1,000,000, with a deductible of $1,000.
CCCE maintains risk management policies, procedures and systems that help mitigate credit, liquidity, market, operating, regulatory and other risks that arise from participation in the California energy market.
Credit guidelines include a preference for transacting with investment-grade counterparties, evaluating counterparties financial condition and assigning credit limits as applicable. These credit limits are established based on risk and return considerations under terms customarily available in the industry. In addition, CCCE enters into netting arrangements whenever possible and, where appropriate, obtains collateral and other performance assurances from counterparties.
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CENTRAL COAST COMMUNITY ENERGY
NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2021 AND 2020
21 7. PURCHASE COMMITMENTS
POWER AND ELECTRIC CAPACITY
In the ordinary course of business, CCCE enters into power purchase agreements to acquire energy and electric capacity. The price and volume of purchased power is largely fixed. Variable priced power, which is a small part of our portfolio, is generally linked to the market price of either natural gas or power at the date of delivery. Variable volume is generally associated with contracts to purchase energy from resources with varying availability and production, such as solar, wind and hydroelectric facilities.
CCCE enters into long-term power purchase agreements ensure stable competitive rates for its customers and to comply with state law and voluntary targets for renewable and greenhouse gas (GHG) free products.
The following table represents the expected, undiscounted, contractual obligations outstanding as of September 30, 2021:
Year ending September 30,
2022 $ 277,000,000
2023 184,000,000
2024 139,000,000
2025 117,000,000
2026 133,000,000
2027-2055 2,305,000,000 Total $ 3,155,000,000
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CENTRAL COAST COMMUNITY ENERGY
NOTES TO THE BASIC FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2021 AND 2020
22 8. OPERATING LEASE
CCCE entered into non-cancelable leases for its satellite and primary office premises that terminate on March 31, 2022 and on December 31, 2022, respectively. Rental expense for CCCEs office space was $279,000 and $271,000 for the years ended September 30, 2021 and 2020, respectively.
Future minimum lease payments under these leases are as follows:
Year ending September 30,
2022 $ 266,000
2023 63,000
Total $ 329,000
9. FUTURE GASB PRONOUNCEMENTS
The requirements of the following GASB Statements are effective for years ending after September 30, 2021:
GASB has approved GASB Statement No. 87, Leases; GASB Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements; GASB Statement No. 96, Subscription-Based Information Technology Arrangements; and GASB Statement No. 97, Certain Component Unit Criteria and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans. When they become effective, application of these standards may restate portions of these financial conditions.
10. SUBSEQUENT EVENTS
EXPANSION PLAN
In October 2021, CCCE enrolled the following 3 jurisdictions in the Southern California Edison service area: The cities of Carpinteria, Goleta as well as the southern portion of unincorporated Santa Barbara County.
In early 2022, CCCE will enroll the City of Buellton (Santa Barbara County) in the PG&E service area.
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Staff Report Item 7
TO: CCCE Policy Board of Directors
FROM: Tom Habashi, Chief Executive Officer
SUBJECT: Support and Direct CEO to take Necessary Steps to Prepare a Project Participation Agreement Pre-Pay Bond Issuance through California Community Choice Financing Authority (Action Item)
DATE: June 15, 2022
RECOMMENDATION:
This recommends that the Policy Board direct the CEO to take Necessary Steps to prepare a Prepay Bond Issuance Transaction for approval at a future Policy Board meeting.
BACKGROUND:
CCCE’s financial strength and growing finance capability give it additional levers to pull to deliver savings for customers. One such lever is the energy prepay, a transaction structure in which a Power Purchase Agreement (“PPA”) holder facilitates the prepayment of energy – effectively receiving a discount to the contracted PPA price in the process. Historically, discounts have been 7% or more to the contracted price. Three Community Choice Aggregators (“CCA”) – Marin Clean Energy, East Bay Community Energy, and Silicon Valley Clean Energy – executed prepay transactions in 2021. East Bay Community Energy is now pursuing a second prepay. CCCE is exploring prepays for up to 5 PPAs expected online in 2022, representing approximately 930 GWh/year of production and notional value of over $500 million.
DISCUSSION:
Prepays have existed in the power and natural gas business for over three decades, with billions of dollars in nominal value transacted across the country. PFM Advisors LLC, CCCE’s Financial Advisor, has advised on almost $5 billion of electric prepays in California alone. Gas prepays have been transacted as far back as the 1990s. They have stood the test of time, across economic and market conditions.
A simplified basic prepay transaction graphic is provided in this staff note. In essence, CCCE partially assigns a PPA to a counterparty while simultaneously signing a power purchase contract with a financing entity – in this case, California Community Choice Financing Authority (CCCFA). CCCFA signs a power 88 of 204
supply agreement with the same counterparty. CCCFA issues non-recourse tax-exempt bonds, which are less expensive than taxable bonds, and uses the bond proceeds to prepay for the power it is receiving from the counterparty. The counterparty receives power from the PPA that CCCE assigned. It supplies that power to CCCFA, which passes that power on to CCCE. So CCCE is still receiving the power it contracted when it signed the original PPA. The power has simply been routed through the counterparty and CCCFA. The counterparty values this agreement because it can raise capital – through the prepayment, which was funded by a tax-exempt bond issue – at a lower cost than if it issued taxable bonds itself. Many counterparties also value the fact that the prepayment is a diversified and stable form of funding, less subject to short-term market volatility. CCCE pays CCCFA the contract price, less a discount. CCCFA uses CCCE’s payments to service the debt. CCCFA functions as a conduit, enabling the transaction. (CCCE is a founding member of CCCFA.)
The number of counterparties and transactions naturally raise questions about risks. E.g., what if the counterparty fails? What if the PPA produces less than expected? The transaction is structured and contracted to ensure that, in a worst-case scenario, the transaction legs terminate and CCCE effectively returns to where it started – holding a PPA. Short-term issues such as under/overproduction are handled through conservative modeling and tracking accounts to ensure actual production is accounted for in the same way CCCE would experience it today. An expansive discussion of risks will be provided at a future Policy Board meeting.
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The key structural risks in transaction execution are the choices of PPAs and counterparty.
PPAs with volatile production and hard-to-price locations make the calculation of a stable valid prepayment amount difficult. CCCE is mitigating this risk by exploring 5 PPAs with a mix of technologies whose output is stable and carefully modeled – geothermal, solar, and wind. The notional value of the prepayment is expected to be over $500 million.
The counterparty role is filled by investment banks or bank fund teams who manage or facilitate all the key parts of the transaction – power purchases and sales, underwriting, prepayment allocation etc. CCCE is mitigating this risk and maximizing the value to customers by conducting a Request For Information (RFI) process that evaluates the following:
Long-term corporate commitment to commodities and energy Potential savings delivered to CCCE
Transparency in pricing, fees, and savings
Energy market capabilities, including scheduling and settlements Modeling, valuation, and risk management expertise
Experience with municipal and public power debt, particularly in California Prepay transaction experience
Ability to deliver additional value to CCCE through other transactions The RFI process is expected to conclude by mid-June and a full team of bankers, advisors, and lawyers is expected to be assembled by end-June.
The prepay market is driven by interest rates and investor appetite for tax-exempt bonds. The typical length of the initial term is 5 years, with the bonds being refinanced at the end of that term. Therefore, it is prudent to consider the savings to be the amount saved for that initial term. Staff plans to prepare a prepay transaction for consideration by the Policy Board at its September meeting.
FISCAL IMPACT:
Staff will provide a complete financial analysis with any direct costs, if applicable, when a potential prepay transaction is brought to the Board in September.
CONCLUSION:
PPA prepay transactions have the potential to deliver savings to customers through discounts to contracted PPA prices. The Board’s support is key to unlocking that value. 90 of 204
Staff Report Item 8
TO: CCCE Policy Board of Directors
FROM: Tom Habashi, Chief Executive Officer
SUBJECT: Approve Underserved Communities Outreach and Engagement Plan (Action Item)
DATE: June 15, 2022
RECOMMENDATION:
This recommends that the Policy Board of Directors review and approve the Underserved Communities Outreach and Engagement Plan.
BACKGROUND:
In June 2020Central Coast Community Energy began development of an outreach and engagement strategy to promote more effective customer engagement among customers in underserved communities within CCCE service territory.
In August 2021, CCCE formed an Ad Hoc Committee (“Committee”) consisting of staff and CAC members Mike Termini, Brandon O-Rourke, and Katie Davis. The Committee was tasked with forming recommendations on how to improve outreach and engagement with the underserved communities in CCCE’s diverse service area.
On December 1st, 2021, the committee presented the first draft of the Underserved Communities Outreach and Engagement Plan to the Community Advisory Council. The committee continued to meet to discuss the council’s feedback and revise the plan, which was approved by the CAC on June 1, 2022.
DISCUSSION/ANALYSIS:
The proposed Underserved Communities Outreach and Engagement Plan is a component of CCCE’s overall effort to effectively communicate and engage all customers. The Underserved Communities Outreach and Engagement Plan expands on existing tactics and aims to (1) define underserved communities, (2) establish strategies and tactics to improve engagement, and (3) layout a plan for implementing these tactics and achieving desired outcomes. 91 of 204
The proposed plan seeks to drive underserved customer engagement in programs such as Electrify Your Ride and Electrify Your Home, as well as to encourage participation in financial assistance programs such as the Arrearage Management Plan, CARE, and FERA.
The proposed plan identifies the following key focus areas:
Definition of Underserved Communities: CCCE considers communities to be underserved if they are underrepresented in matters discussed by the agency and if they have limited access to public investments, resources, education, and information concerning energy service. As a rule, these communities face greater barriers to access because of their: (1) geographic location; (2) language and cultural differences; (3) socio-economic status; (4) availability of health services and housing; (5) the digital divide; and (6) disproportionate impact from one or more environmental hazards.
Identifying Underserved Communities: The report reviews existing designations, data, and local knowledge to identify underserved communities’ populations and locations within the CCCE service area.
Understanding Barriers: Each barrier listed in the agency definition of underserved communities is explored in greater detail in the report. Discussion of communication strategies that can be employed to overcome each barrier is also included.
Recommendations and Implementation Plan: The plan identifies methods to track and measure outreach efforts to attain desired outcomes.
Appendix – Community Organizations and Public Agencies: A list of current and potential collaborators critical to conducting outreach with underserved communities on the Central Coast is contained in the report.
Staff recommends the proposed plan be periodically reviewed to ensure it remains responsive to future concerns and challenges that may present themselves to our local communities.
FISCAL IMPACT:
There is no fiscal impact to this report.
CONCLUSION:
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Approval of the proposed Underserved Communities Outreach and Engagement Plan will aid in defining underserved communities, identifying partners, and targeting effective outreach strategies.
ATTACHMENT(S):
1. Proposed Underserved Communities Outreach and Engagement Plan 93 of 204
UNDERSERVED
COMMUNITIES
OUTREACH AND
ENGAGEMENT PLAN
2022
THE COMMUNITIES WE SERVE
INTRODUCTION
This document provides a roadmap for Central Coast Community Energy's (CCCE) efforts to productively engage with underserved communities.
CCCE staff collaborated with an ad hoc committee of the Community Advisory Council (CAC) to develop a plan addressing (1) how CCCE defines underserved communities; (2) how CCCE engages and supports underserved communities; and (3) what strategies and tactics can improve CCCE's engagement with underserved communities.
This Plan also acknowledges opportunities to further identify underserved communities and address the unique challenges affecting different target segments. Understanding the complex issues underserved communities face, CCCE anticipates amendments to this plan as our learning develops around best practices.
DEFINING UNDERSERVED COMMUNITIES
Who constitutes an "underserved community?" A clear and inclusive definition of these communities is critical to determining both where to focus engagement efforts, as well as the barriers those efforts seek to overcome.
The following definition was developed through the work of the Community Advisory Council ad-hoc committee ("Committee") created to assist in the formation of this plan. The Committee reviewed existing statutory definitions, as well as publications by the California Public Utilities Commission, California Environmental Protection Agency, and the California Health and Human Services Agency. In addition, the Committee received input from various stakeholders, local community-based organizations, and neighboring community choice agencies.
DEFINITION
CCCE considers communities to be underserved if they are under-represented in matters discussed by the agency and if their access to public investments, resources, education, and information about energy service is limited. As a rule, these communities face greater barriers to access because of their:
1) Geographic location
2) Cultural and language differences
3) Socioeconomic status
4) Health risks
5) Position within the digital divide
6) Exposure to environmental hazards
This list, while not exhaustive, represents the key barriers CCCE will seek to address in designing its outreach and programs.
IDENTIFYING UNDERSERVED COMMUNITIES
Where are the underserved communities in CCCE's service area? Knowing which of our communities meet the definition of underserved will help CCCE target its engagement efforts.
Using the six barriers listed above as its criteria, CCCE examined existing designations, data, and local knowledge to locate vulnerable populations geographically. It is important to note that a spatial analysis alone is inadequate, as communities can also be made up of individuals who share characteristics, but do not inhabit the same locality.
US CENSUS BUREAU, US DEPARTMENT OF AGRICULTURE,
AND THE FEDERAL OFFICE OF RURAL HEALTH POLICY: RURAL COMMUNITIES The Census Bureau offers online tools to locate communities with the highest concentrations of rural populations, as seen in the Census Bureau's map below based on the 2010 Census. The United States Census Bureau defines "rural" as an area that encompasses all population, housing, and territory not included within an urban area. For reference, "urban areas" consist of two types of geographies:
• "Urbanized Areas" have a population of 50,000 or more. • "Urban Clusters" have a population of at least 2,500 and less than 50,000.
How Does the U.S. Census Bureau
Define "Rural?"
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of Nt•I papulatlal"I
lo'Nfll conc1n11non
of rum papul.-
No rur-11 popul..tnon
Fed,t!ral land,-
Source: u.s. Census ewu1,.1, 2010 c1nsusSummtry F�lt 1 Tiblt P2.1rid -'..i!J.Qm��� u_s.. G:eolog1c.al Surve)'.�
Areas 0-ubase otthe united Statn1PAOUS1
E<i:rL HE.RE G.l.rmin. USGS_ EPA._ NPS I EYI l-!ERE. I.PS By this standard, however, much of the service area is characterized as rural. Supplementing this data with the Rural-Urban Commuting Area (RUCA) system provides an opportunity to narrow the identification of rural communities.
USDA-Economic Research Service and the Federal Office of Rural Health Policy collaborated to develop the RUCA system. This instrument uses the Census Bureau's 2010 Urbanized Areas and Urban Clusters in combination with commuting information to characterize the rural and urban status of every census tract nationwide and their relationships. This analysis allows CCCE to locate geographically isolated rural communities burdened by long commutes to urban areas.
Within the CCCE service area, the following communities, organized by County, are classified as rural:
San Benito
San Luis Obispo
Santa Barbara
Hollister, Paicines, San Juan Bautista, Tres Pinos
Paso Robles
New Cuyama, Buellton, Casmalia, Lompoc, Los Alamos, Los Olivos, Santa Ynez
AB 1550 CALIFORNIA CLIMATE INVESTMENTS PRIORITY POPULATIONS 3.0 BY CENSUS TRACTS Designed by the California Air Resources Board, the California Climate Investments Priority Populations 3.0 by Census Tract Map identifies low-income communities, which are defined in State Assembly Bill 1550 as the following:
"Low-income communities" are census tracts with median household incomes at or below 80 percent of the statewide median income or with median household incomes at or below the threshold designated as low income by the Department of Housing and Community Development's list of state income limits adopted under Section 50093.
Low-income communities identified by the California Climate Investments Priority Populations
3.0 Census Tract Map that fall within CCCE's service area may include, but are not limited to the following incorporated and unincorporated communities:
Santa Cruz
San Benito
Santa Barbara
San Luis Obispo
Santa Cruz, Live Oak, Aptos, Capitola, Twin Lakes, Pleasure Point, Capitola, Watsonville
Hollister
Guadalupe, Santa Maria, Isla Vista, New Cuyama, Carpinteria Paso Robles, Morro Bay, San Luis Obispo
Santa Barbara
THE INDICATORS OF BROADBAND NEED
Buildout and access to broadband infrastructure is a critical to the inclusion of underserved communities in CCCE's core mission of reducing GHG emissions, promoting the adoption of fuel shifting technologies through electrification programs, and stimulating the local economy.
Broadband facilitates customer communications and is a prerequisite for demand response technologies designed to help consumers reduce their energy use.
CCCE programs like Electrify Your Ride reimburse customers for most of the cost to purchase and install EV chargers, including Wi-Fi enabled Level 2 EV Chargers that can reduce charging output in response to signals transmitted during peak load hours. Broadband dependent technologies can provide CCCE, and its customers, access to real time energy use data that supports the transformation of the energy sector to zero-carbon and provides savings to customers, reducing their energy burden.
Communities in need of broadband are also excluded from the recent growth in remote work opportunities. Remote work can serve as an equalizer for caretakers and others who may be priced out of "tech-hubs," such as Silicon Valley, where 90% of low-income renters are "cost burdened," meaning they spend more than 30% of their income on housing.
The United States Department of Commerce, National Telecommunications and Information Administration (NTIA) created the Indicators of Broadband Need map to show broadband availability within the United States. Communities in the CCCE service area with 25% or more of households who reported not having access to the internet or a computer, tablet, or smartphone may include, but are not limited to:
• Santa Cruz: Watsonville, Freedom
• Monterey: Salinas, Gonzales, Soledad, Greenfield and its surrounding unincorporated communities, such as Chualar and Harlem.
In addition, this data instrument includes indicators for viewing communities at the census tract level with median fixed broadband speeds below 25/3 (25 Megabits/sec (download) and 3 Megabits/sec (upload), the standard speeds set by the Federal Communications Commission). An approximation of communities with who match this description may include, but are not limited to:
• San Juan Bautista
• Prunedale
• Castroville
•
Interlaken
• Logan
• Communities in Big Sur
• South Monterey County
• Communities the Gaviota coast
• New Cuyama
• Unincorporated Santa Barbara County between Santa Maria and the Cuyama Valley.
U.S. CENSUS BUREAU AND CALENVIROSCREEN 4.0: LINGUISTICALLY ISOLATED COMMUNITIES CalEnviroScreen 4.0 maps linguistic isolation, a term used by the US Census Bureau for limited English-speaking households. More than 40 percent of Californians speak a language other than English at home. About half of those do not speak English well or at all. Linguistic isolation can limit job opportunities and the ability to engage in civic life, navigate health and social services, and law enforcement protections. Lack of proficiency in English may also indicate a community's ease in providing community input on matters discussed by CCCE.
Within the CCCE service area, the following communities, organized by County, are classified as communities that scored in the 50th percentile or higher in linguistic isolation:
Santa Cruz Watsonville, Interlaken, Unincorporated Santa Cruz County area (zip code 95076), Santa Cruz, Twin Lakes, Live Oak
San Benito Hollister, Unincorporated San Benito County area (zip code 95023) Santa Barbara Guadalupe, Santa Maria, Carpinteria, Isla Vista, Goleta, Unincorporated Santa Barbara County (zip code 93455).
San Luis Obispo San Luis Obispo, Paso Robles
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LOCAL KNOWLEDGE
Conversations with local stakeholders, including member agency staff, community-based organizations, public agencies, and experts demonstrated the need for culturally relevant communication in areas that may not be captured through state and federal indices, but which nevertheless face significant barriers. Examples of such communities include:
• The growing indigenous migrant population on the Central Coast that is widely believed to be underestimated in size. Public agencies and service providers have had limited success counting this population, possibly due to the unique language barrier or a long history of systemic discrimination from non-indigenous populations. The Indigenous Farmworker Study, authored by farmworker researchers--Richard Mines, Sandra Nichols, Anna Garcia and David Runsten and supported by cultural facilitators at the California Rural Legal Assistance Fund, estimates that roughly 27,330 - 41,670 of the Mixteco-speaking farmworker population lives on the Central Coast region, with higher concentrations of this population in Santa Barbara and Monterey Counties.
• Neighborhoods and unincorporated towns too small or informal to be recognized by state and federal identification criteria should not be overlooked. Through discussions with stakeholders to identify other communities who fit the description of underserved, the committee identified the San Jerardo Cooperative, an affordable housing cooperative located south of Salinas, and the town of New Cuyama, located in Santa Barbara County near the intersection of San Luis Obispo, Ventura, and Kern Counties. In addition, Santa Rita is a neighborhood in northern Salinas where many non-federally recognized tribal residents have lived.
• Tribal communities in our service area with which CCCE has yet to establish relationships and regular channels of communication also represent important populations not captured by established census-based tools. CCCE must improve our understanding of these communities' energy needs. Developing relationships with tribal leaders, identifying opportunities for collaboration, disseminating resources and information, and gathering input from these groups was identified as important components of CCCE's future engagement efforts.
UNDERSTANDING BARRIERS
Each of the six barriers listed in the CCCE definition of underserved communities deserves a great-er explanation, particularly of how barriers impact populations served by CCCE and stand in the way of effective engagement. This section also discusses communication strategies that can be employed to overcome each barrier.
GEOGRAPHIC LOCATION
Isolated rural communities lack proximity to essential resources, which reduces opportunities for conventional outreach. Lack of proximity to cities and resource hubs can prevent rural residents and businesses from participating in programs that aid with utility bills, home retrofits, and electrification projects. People living in these communities may be discouraged by obstacles that make applying to agency programs more difficult. Obstacles can include lack of broadband access and the amount of travel required to submit applications in person. Lack of proximity also discourages contractors from working on low-income homes in critical need of upgrades that are a prerequisite for some residential energy programs.
:
Customers in rural communities may have vastly different energy needs and priorities than customers located closer to urban centers. CCCE service, educational webinars, and energy programs are less of a priority for customers with other pressing concerns, such as the availability of healthy food, safe drinking water, and low-cost housing.
Yet increased awareness of CCCE services in rural communities is vitally important. Rural customers can obtain significant environmental and economic benefits from CCCE programs as well as from energy-focused programs offered by partner agencies.
Awareness of CCCE and its programs also varies according to location. CCCE has provided service to northern communities (Santa Cruz, Monterey, and San Benito Counties) since 2018 and southern communities (San Luis Obispo and Santa Barbara Counties) since 2020 - 2022. Unfamiliarity with CCCE remains high in the recently enrolled communities of San Luis Obispo and Santa Barbara Counties, which creates additional challenges in conducting outreach to underserved populations in these areas.
Strategies:
For rural communities in Santa Cruz, San Benito, and Monterey Counties that enrolled before 2020, the agency's recent name change to Central Coast Community Energy provides an opportunity to renew education efforts concerning CCCE's mission and purpose. • Re-enrollment communications for individuals in northern rural communities that may have opted out of CCCE service provide additional opportunities to emphasize the benefits of renewable energy programs offered with CCCE service.
• Relationships with member agencies and community-based organizations play a pivotal role in reaching rural communities for education and re-enrollment efforts. •
In the southern rural communities of San Luis Obispo and Santa Barbara counties, recent enrollments in 2020-2022 create a need to establish greater familiarity and understanding of CCCE services and resources.
• CCCE must form new relationships with community organizations, improve customer awareness and solicit feedback from partners to understand issues around engagement and program participation within southern area rural communities. • CCCE must support broadband deployment in rural areas and the development of regional energy networks to provide cohesion around the topic of energy and inclusivity for the diversity of voices and interests not frequently heard in mainstream discourse.
CULTURAL AND LANGUAGE DIFFERENCES
According to the Census Bureau's American Community Survey (ACS) 5-year estimates, approximately 8% of households in the CCCE service area are limited English-speaking households. Among people aged five and older, approximately 19% profess some difficulty with spoken English. Some customers may speak English as their second language, while others may not speak English at all.
Translation of information into the non-English languages spoken by our customers is essential as CCCE communicates new programs, rates, and bill assistance or payment plan options.
Effective translations require an understanding not only of words but of meaning. In many cases, a literal translation without attention paid to conventional language conveys a confusing message.
Translations should resonate with the target audience while maintaining a clear and simple message.
In CCCE's service area, Spanish is the most common non-English language, next to Tagalog. Also significant are the languages of migrant indigenous communities, namely Mixtec, Zapotec, and Trique dialects, among others, which are only spoken.
Members of indigenous communities who are neither fluent in Spanish nor English face additional barriers in accessing services. Conversations with leaders in these communities reveal that some migrant indigenous residents only speak their native language and rely on oral translations to receive information. To engage with this community, leaders recommended ongoing outreach at community meetings supported by translators or cultural intermediaries, in addition to an audio-only marketing approach through radio, Facebook or WhatsApp.
Engaging linguistically isolated communities across the service area requires a multi-faceted approach comprised of effective marketing, event, and stakeholder outreach. CCCE has leveraged successful partnerships with community organizations and media outlets such as the Monterey County Immigrant Services Network of Empowerment (CISNE), Promotores, Mixteco lndigena Community Organizing Project, Entravision, and La Ley to conduct the Farmworker Field Promotion, and promote the Arrearage Management Plan and CCCE's Electrify Your Ride electric vehicle incentive program. Additionally, the agency continues to improve its translation of outreach materials, such as videos, brochures, web content, information sheets, and program applications.
Strategies:
• Leverage popular social media platforms and build new media relationships with radio and cable television stations in recently enrolled communities to promote CCCE service, energy programs, and resources in Spanish.
•
Investigate outreach opportunities with regional advocates, such as the Mixteco lndigena Community Organizing Project, Lideres Campesinas, Promotores, and radio stations. • Support and attend cultural events, such as church festivals, soccer tournaments, resource fairs, swap meets, and farmworker field promotions to increase direct engagement with multilingual communities.
SOCIOECONOMIC STATUS
Low-income households are found in a variety of demographic groups and locations within our service area. Targeted groups include working-class and rural families, immigrants, farmworkers, the housing burdened, the food insecure, the unemployed, residents of mobile home parks, renters, and senior citizens living on fixed incomes. These groups are more likely to be disproportionately impacted by "the energy burden", which is defined by the U.S. Department of Energy (DOE) as the portion of a customer's household income that is spent on energy. According to DOE's Low-Income Energy Affordability Data (LEAD) tool, the national average energy burden for low-income households is 8.6%, three times higher than for average and medium-income households which are estimated at 3%. It is assumed that the pandemic amplified existing challenges around utility bill payments for low-income households.
•
Working-class families, including farmworkers, often work long hours and lack the time and energy to engage with utilities, public agencies, schools, and other essential service providers.
Their non-working hours may be dedicated to caring for family members or other critical matters unrelated to seeking information from utilities and agencies such as CCCE. While these families are not excluded from energy programs, they are less likely to participate in them. CCCE considers it particularly important to identify new areas of engagement with these communities by understanding where they spend their time and what sources of information they trust.
Renters may live in single-family homes, multi-family homes, and mobile home parks. Residents in rental housing often lack control over their energy bills. Some renters may pay for utilities as part of their rent. Lack of direct management for energy service may exclude renters from having the choice to participate in community choice energy and other helpful programs. CCCE sees an opportunity to improve relationships with property managers and nonprofits that aid renters, especially in affordable housing communities.
Senior citizens living on fixed incomes may face affordability issues, especially around paying their monthly bills. CCCE considers it particularly important for individuals with low and/or fixed incomes to understand their electricity options, including knowing that discounts like the California Alternative Rates for Energy (CARE) and Family Electric Rate Assistance (FERA) are unaffected by CCCE service. These customers likely receive information through traditional sources, such as print newspapers, network television, mail, and word of mouth. Their concerns related to energy deal with the increasing energy burden as a portion of their income. Some customers from this demographic opt-out of CCCE under the assumption that CCCE service is an additional cost.
Low-income households across the service area stand to gain the greatest benefit from a combination of resources that include utility bill assistance, arrearage payment plans and forgiveness, weatherization, energy efficiency, and rebates for transportation and housing electrification. CCCE engages in a variety of efforts to support rate assistance programs through its targeted emails, newsletter, customer financial resources webpage, social media platforms, chambers of commerce, member agencies, community organizations, farmworker outreach program, monthly educational webinars, and in-person events. Continuing these efforts is critical to the aim of bringing relevant and impactful information to underserved communities. To date, customers on discount programs, such as CARE, FERA, and Medical Baseline represent 31% of all residential customers in CCCE's service area.
Strategies:
• CCCE is positioned to be a resource and collaborator in ensuring eligible customers have the necessary information to enroll in available rate assistance programs, such as CARE and FERA that apply to CCCE generation charges as well as investor-owned utility transmission and distribution charges.
• CCCE considers it particularly important to play a supportive role in keeping low-income customers up to date on state and local assistance programs to avoid disconnections expected after the shutoff moratorium ordered by the CPUC on June 24, 2021, terminates in March 2022.
• CCCE will prioritize eligible customers and communities with the highest CARE and FERA enrollment rates to promote critical resources such as the Arrearage Management Plan (AMP)and California Arrearage Payment Program (CAPP).
• CCCE will consider equity and access issues in designing its energy programs, which invest CCCE revenue into the communities we serve through financial incentives to electrify transportation and buildings.
HEALTH RISKS
Communities with high levels of chronic illnesses are at greater risk of poor health outcomes and face additional financial burdens associated with treating medical conditions. Low-income, immigrant, senior, minority and rural households are more likely to have chronic illnesses yet lack access to adequate health care. Energy costs can be a source of financial stress and erode the ability to pay for health care. Financially burdened customers with chronic illnesses often require payment assistance to keep their medical devices powered during power shutoffs or simply to keep the lights on.
Strategies:
• Provide regular updates on energy programs and bill assistance to health advocates such as the Independent Living Resource Center, Latino Elders Outreach Network, Mi Vida Mi Voz, Latinx and Indigenous Migrant Task Force, and Promotores. These agencies play a role in public health and can help CCCE to identify additional communities disproportionately burdened by poor health outcomes on an ongoing basis.
• Encourage health advocates and agencies to promote resources such as Medical Baseline and the Low-Income Home Energy Assistance Program (LIHEAP). • Leverage existing outreach networks through CCCE's member agency's health departments and housing agencies. Explore opportunities for collaboration and information sharing with these agencies.
THE DIGITAL DIVIDE
The digital divide refers to the gap between customers that have access to computers and the internet and those that don't. Although rural customers are more likely to be affected by the digital divide, urban communities can also be impacted. Beginning in March of 2020, response to the COVID-19 pandemic required CCCE to move to digital communication as its primary method of engagement with customers. Outreach conducted at in-person events shifted largely to virtual platforms such as Zoom or Facebook Live. Energy program applications are now exclusively online. Customers without access to reliable broadband or necessary devices may have increased difficulty receiving current information on CCCE's resources and applying for energy programs.
Strategies:
• Work with member agency staff and other stakeholders to identify additional community groups and organizations such as senior centers, food banks, resource centers, farmworker action networks, rural development organizations, business organizations, educational institutions, environmental organizations, special districts, neighborhood groups, service clubs, and social service providers that can help spread the word to customers without access to the internet.
• Continue to rely on traditional forms of media such as cable television and radio, newspapers, and magazines to conduct outreach.
• Distribute print collateral, make presentations, and attend in-person events to increase access to CCCE programs and information.
ENVIRONMENTAL BURDENS
Every community encounters its own set of environmental, health, and socioeconomic stressors.
Environmental burdens often overlap with and amplify existing health and income disparities. As a result, CCCE will target customers impacted by more than one barrier.
Environmental burdens may include communities frequently exposed to one or more sources of pollution. Some communities are disproportionately affected by climate change and are more vulnerable to health stressors such as heatwaves, particulate matter, drinking water contaminants, pesticides, toxic waste, traffic density, wildfires, smoke, sea-level rise, flooding, and landslides.
While it is not CCCE's role to resolve all environmental burdens or their subsequent impacts, we can provide resources when appropriate to reduce direct and indirect impacts to our customers.
Strategies:
• Collaborate with member agencies to ensure resources provided by CCCE and awareness of CCCE service and benefits are included in programs to assist and protect environmentally burdened communities.
• Regional air quality districts that regulate and work to address health and community impacts related to pollution are natural collaborators in helping CCCE to reach customers in areas with disproportionate exposure to environmental risks.
RECOMMENDATIONS
CCCE must strengthen existing relationships, build new ones, and use best practices to engage with customers and promote available resources. In developing recommendations to address and reduce the barriers facing underserved communities, CCCE considered the following questions:
• How can CCCE successfully educate and build awareness in underserved communities? • Where are potential new areas for media engagement?
• How can CCCE circulate information and resources equitably in a non-digital landscape? • How can CCCE successfully deploy energy programs in underserved communities? • How can CCCE successfully promote other relevant resources including partner agency resources for energy customers?
• How does CCCE effectively solicit input for current and future CCCE efforts from underserved communities?
ADAPTING ENERGY PROGRAMS
Engaging underserved communities deals not only with communication methods but the substance of the community reinvestment and energy programs CCCE provides. Do our programs address the unique needs of the underserved communities identified in this report and are they offered in such a way that these communities can easily take advantage of them? Energy programs are designed to achieve a more equitable, clean energy future for the Central Coast. CCCE's energy programs have the potential to significantly reduce greenhouse gas emissions through the electrification of building, agricultural, residential, and transportation sectors. Supporting widespread electrification or "fuel-switching" also brings the potential to spur green job opportunities and stimulate the local economy.
In addition to several well-established health and safety benefits, electrification can reduce costs for residents and businesses and improve the overall quality of life. It is important CCCE take steps to ensure underserved communities have access to these programs, including seeking public input on effective ways to ensure access.
Virtual workshops were conducted in late 2020 to Mid-2021 to collect feedback on energy programs. Over 550 participants took the FY 20-21 CCCE Energy Programs Priorities Survey. In addition, the Energy Programs Ad Hoc Committee of the Community Advisory Council assessed and ranked programs according to the needs of CCCE customers As a result of such input, CCCE has modified energy programs to broaden eligibility and provide incentives for low-income residential customers, small and medium businesses, and institutions serving underserved communities. Marketing materials for programs are currently made available in English and Spanish.
Electrify Your Ride (EYR) Program
In 2021, The Electrify Your Ride (EYR) Program was modified to provide additional incentives and expand eligibility for low-income customers with household incomes between 200-400% of the federal poverty line. As an alternative to demonstrating active enrollment in CARE, FERA, or HEAP assistance programs, applicants can verify eligibility through household paystubs, participation in other government programs with comparable income requirements, or by working directly with CCCE staff to ascertain another verification method.
New Construction Electrification Program
CCCE recently launched the third iteration of its New Construction Electrification Program (NCEP).
This program supported both market-rate and affordable-all electric housing developments in previous years. Beginning in 2022, NCEP will only provide incentives to developers for affordable, all-electric housing. The program requires new housing projects to accommodate all-electric appliances including water heating, space heating, and stoves.
ADAPTING COMMUNICATIONS & OUTREACH
CCCE has used advertising, direct mail, and social media to support successful customer enrollments and promote energy programs. CCCE's "all hands on deck" approach to outreach focuses on individual customer engagement, sponsorship and attendance of community events and workshops, and support for local and regional membership organizations. As CCCE increased in staff, including bilingual employees, it expanded opportunities to regularly engage Spanish-speaking communities and identify opportunities for targeted outreach.
Initiatives include:
• Engagement with a wide variety of stakeholders and community groups to solicit input on CCCE matters and to promote resources. CCCE has held meetings with local community organizations and businesses to build relationships with more than 100 community-based partners across the service area.
•
Identification of strategic sponsorships, memberships, and events where CCCE can interact with hard-to-reach audiences. CCCE has sponsored, attended, and presented at more than 250 events. Events include the Community Immigrant Services Network of Empowerment and Promotores roundtables, NASA STEM Cafes, Vision y Compromiso's Summer Resource Fair, "Stuff the bus" with United Way of Monterey County, Second Harvest Food Bank Santa Cruz County, and sponsorships of the Boys and Girls Clubs of Monterey, San Luis Obispo, and Santa Barbara Counties.
•
In efforts to build greater awareness and outreach in the farmworker communities, CCCE implemented the monthly farmworker field promotion which was the first of its kind in the CCA community. The staff has sponsored 28 events and reached more than 1,260 farmworkers with local Spanish radio stations to spread awareness of CCCE and its service offerings.
• CCCE staff has conducted over 200 virtual presentations and webinars in English and Spanish, covering enrollment, utility bill assistance programs, CCCE Energy Programs, and program feedback surveys. Webinars are streamed via Zoom and Facebook Live to provide remote access to customers for whom attending an in-person presentation may be infeasible due to work hours and geographic location.
•
In support of partners who administer utility bill assistance programs, CCCE published the Customer Financial Resources webpage for residential, agricultural, and commercial customers.
• To support the local economy, CCCE launched the CCCE Vendor Registry to increase opportunities for local and diverse businesses.
IMPLEMENTATION PLAN
FOCUS
AREA
Customer
Financial
Resources
OBJECTIVES
Marketing:
Provide information
that relates to
customers in
underserved
communities
concerned about
their energy bills.
KEY RESULTS
1. Send quarterly email to CARE and FERA customers to
notify them of additional customer financial resources.
2. Distribute updated information on resources to member agencies through quarterly updates and emails.
3. Update the customer financial resources page in English and Spanish when changes are made to programs.
4. Promote monthly webinars via advertisements via
social media, monthly e-newsletter, and periodic digital advertising to increase sum annual attendance
IMPLEMENTATION PLAN
FOCUS
AREA
Customer
Financial
Resources
OBJECTIVES
Outreach:
Form or maintain
partnerships with
community-based
organizations to
streamline customer
financial resources
to underserved
communities.
KEY RESULTS
1. Prioritize outreach to identified community-based
organizations that specifically administer or provide
support of customer financial assistance resources.
2. Customize outreach to current or potential partners
who represent environmental justice groups, family
resource centers, food banks, affordable housing,
faith-based organizations, mobile home park renters/
owners, tribal communities (non/federally recognized),
rural development orgs, health orgs/agencies, Mexican
consulates, and senior centers.
3. Target community organizations that represent
communities who do not speak English as a first
language, such as farmworker, migrant indigenous, and
Hispanic advocacy organizations.
4. Form new partnerships, seek a stable contact person
at each organization, conduct and document one-to-one meetings, and identify opportunities to share information or participate at events such as meetings,
roundtables, and resource fairs. Assess if translation
services will be needed
5. Develop a calendar of special community events
from current and new partnerships. Prioritize being
present at or sponsoring events that serve underserved
communities. Events may include but are not limited to
festivals, resource fairs, youth sports tournaments, swap meets, community townhalls, faith-based fairs.
6. Be present at a minimum of 4 farmworker outreach
events to engage around 200 farmworkers on programs
and customer financial resources.
7. Distribute information on the Arrearage Management
Plan (AMP) to identified organizations.
8. Gather and distribute information from three low-income energy assistance administrators, Central Coast Energy Services, CAPSLO, and Community on LIHEAP
at events.
9. Attend a minimum of 12 monthly social service
roundtables and provide regular updates on customer
financial resources, such as CARE, FERA, and AMP.
10. Send monthly digital content to all community partners in English and Spanish. Fulfill special requests for print content delivery.
11. Host or cohost workshops for residential customers
that include segments regarding updates on customer
financial resources. Live stream on Facebook for
Spanish-speaking audiences.
IMPLEMENTATION PLAN
FOCUS
AREA
Energy
Programs
OBJECTIVES
Marketing
Engage underserved
communities to
increase their
participation in CCCE
energy programs.
Energy Programs
Measure and report
participation in
energy programs
from the underserved
communities.
Outreach
Form or maintain
partnerships with
community-based
organizations to
streamline customer
financial resources
to underserved
communities.
KEY RESULTS
1. Notify CARE/FERA customers of new energy programs
when they are launched. Focus information on income-qualifying incentives if applicable.
2. Ensure website redesign highlights energy programs
aimed at underserved communities and that
information related to financial assistance programs is easy to find.
3. Advertise energy programs on a variety of English
and Spanish radio stations and social media covering
the communities of Greenfield, Soledad, Gonzales,
Watsonville, Salinas, Hollister, Seaside, Marina, San Juan Bautista, Paso Robles, Grover Beach, Guadalupe, and
Santa Maria.
1. Adopt the definition of Underserved Communities to
inform future efforts to engage such customers.
2. Conduct annual evaluations of the Energy Programs
portfolio modify and enhance energy programs for
underserved customers. Leverage identification of
underserved communities to inform this exercise.
3. Ensure all relevant mass-market programs information and applications for residential and commercial
customers are available in Spanish.
1. Perform key results # 1 -6 from "Customer Financial
Resources".
2. Individually engage top 25 - 50 contacts who represent underserved communities on relevant energy programs
to ensure they are aware of how each program works.
3. Provide a minimum of 12 presentations related to
residential energy programs in English or Spanish at
meetings and events hosted by community-based
organizations.
4. Distribute energy program print content at in-person events or share with a minimum of one partner per
county who can distribute on CCCE's behalf.
5. Host informational webinars in English and Spanish.
Live stream on Facebook for Spanish-speaking
audiences.
6. Invite community-based organizations to co-host
webinars on energy programs to reach underserved
customers. Prioritize working with previous
Electrification Education Grant recipients who are
already engaging underserved communities on
program-related topics.
IMPLEMENTATION PLAN
FOCUS
AREA
Energy
Programs
Customer
Feedback
OBJECTIVES
Outreach
Form or maintain
partnerships with
community-based
organizations to
streamline customer
financial resources
to underserved
communities.
Marketing
Engage in soliciting
feedback relative to
local opportunities
to support CCCE
customers
Outreach
Explore opportunities
to solicit ongoing
feedback on energy
programs design,
policy, or CCCE
awareness efforts
from leaders and
staff representing
community-based
organizations,
member agencies,
and public agencies
KEY RESULTS
7. conducting Spanish outreach through a partnership
with the Promotores ["Vision y Compromise"].
8. Meet with all Electrification Education Grant recipients who are already engaging underserved communities on
program-related topics. Identify where CCCE can offer
additional support (ex: mailing flyers, offering training on energy programs, translating materials, etc.).
9. Meet with the County of Santa Barbara and Community
Environmental Council and learn about their experience
1. Conduct annual customer surveys to solicit input on
community needs related to energy programs. Achieve
at least 5% participation in Customer Survey.
2. Circulate surveys related to energy needs and energy programs at in-person and virtual workshops.
3. Conduct informal surveys via on-air radio that reaches underserved groups (1 per region, Monterey Bay Tri-County or SLO/SB Counties).
4. Distribute online survey via newsletters and mass emails with local organizations.
5. Research financial incentives for organizations and
agencies to conduct polling on behalf of CCCE.
1. Perform key results # 1 -6 from "Customer Financial
Resources".
2. For any relevant energy program or effort where CCCE seeks input from underserved communities, create
a list of 25-50 community leaders across the service
area who can provide insights specific to the topic of
interest.
3. Conduct a minimum of 10 strategic interviews with
community leaders in underserved communities to
gather their feedback on various topics related to
the agency and invite members of the CAC Ad Hoc
Committee to join.
4. Encourage CAC to garner feedback from residential
customers about CCCE and relay it to CCCE staff.
Establish a template/talking points for CAC members
interested in conducting one-to-one meetings with
local stakeholders.
:
IMPLEMENTATION PLAN
FOCUS
AREA
Customer
Feedback
Re-enrollment
and
Customer
Awareness
Outreach
OBJECTIVES
Outreach
Explore opportunities
to solicit ongoing
feedback on energy
programs design,
policy, or CCCE
awareness efforts
from leaders and
staff representing
community-based
organizations, member
agencies, and public
agencies
Marketing
Collaborate with
CCCE staff to create
a strategic marketing/
communications
campaign related to
re-enrollment and
customer awareness.
KEY RESULTS
5. Meet with the City of Santa Maria and learn about their experience conducting focus groups/listening sessions for Indigenous migrant and farmworker communities through
a partnership with the Mixteco lndigena Community
Organizing Project.
6. For every meeting designed to seek community input,
document and report findings to the appropriate team in CCCE.
7. Create feedback form to be filled out by CCE staff leading events - compile input annually.
1. Launch Re-enrollment Campaign via social media/digital (NextDoor, lnstragram, Facebook) focused on areas of
concentrated opt outs.
2. Share re-enrollment link to CCCE Member Agency pages about CCCE.
3. Develop a list of radio stations that provide segments in Mixteco. Leverage recommendations from partners.
4. Air monthly ads in Mixteco to promote awareness of
Central Coast Community Energy.
5. Evolve our Spanish language social media channels to focus on building a sustainable relationship outside the agency.
6. Adapt content from general market channels (I.e. videos and gifs).
7. Send monthly newsletter.
8. Create messaging content for radio & television partners.
9. Identify and build new relationships with Spanish media contacts or journalists in radio, print, and television.
10. Deliver Spanish Press Release to local media partners and participate in Spanish media interviews.
11. Employ Digital Media.
12. Radio and Television talent should reflect diverse
communities in CCCE service area.
13. Integrate social media into outreach campaigns.
14. Maintain a Spanish language website that mirrors the English website, including updated resource information.
15. Advertise via newspapers and culturally relevant
magazines (print).
IMPLEMENTATION PLAN
FOCUS
AREA
Re-enrollment
and
Customer
Awareness
Outreach
OBJECTIVES
Outreach
Form or maintain
partnerships with
community-based
organizations to spread
awareness of Central
Coast Community
Energy.
KEY RESULTS
1. Perform key results #1-6 from "Customer Financial
Resources."
2. Seek referrals from current or new contacts established in key result #4 from "Customer Financial Resources."
Request a minimum a one referral in every one-to-one
meeting with new established contact.
APPENDIX
COMMUNITY ORGANIZATIONS AND PUBLIC AGENCIES
CCCE has identified the following key organizations in each county to support and collaborate with in identifying new opportunities for engagement with underserved communities. All organizations and agencies are shaded in one of two colors to indicate the following:
Current collaborator
Identified as a potential collaborator
or a current collaborator with
opportunities for improvement
SANTA CRUZ COUNTY
Community Bridges Community Foundation for Santa Cruz County Ecology Action
Santa Cruz Immigration
Project
Santa Cruz Immigration
Project
Encompass Community
Services
Sunrise Santa Cruz Rotary
The Davenport Resource
Service Center
Santa Cruz Neighbors
Boys & Girls Club
The Walnut Avenue
Women's Center
Food Bank of Santa Cruz County Central Coast Energy Services •
Agricultural Labor Relations
Board
Boys & Girls Clubs of Monterey
County
CHISPA (Community Housing
Improvement Systems and
Planning Association)
Community Foundation for
Monterey County
Future Citizens Foundation
Helping our Peninsulas
Environment (HOPE)
Lideres Campesinas
Monterey Bay Area Green
Business Program
Monterey County Agricultural
Commissioner's Office
Monterey-Salinas Transit (MST)
Radio Bilingue
Transportation Agency of
Monterey County
Communities for Sustainable
Monterey County
MONTEREY COUNTY
Ag Against Hunger
California Rural Legal
Assistance (CRLA) Salinas
CINSE (Community
Immigration Network Services
for Empowerment)
Department of Industrial
Relations CAL-OSHA
Gonzales Adult School
Housing Authority of the
County of Monterey
Loaves, Fishes, & Computers
Monterey Bay Educational
Center
Monterey County Office of
Education Migrant Education
Program Region 16
Motivating Individuals
Leadership for Public
Advancement (MILPA)
Rancho Cielo
United Farm Workers
Foundation
Community Emergency
Response volunteers
American National Red Cross,
Monterey Chapter
Center for Employment
Training CET Soledad, Salinas,
Watsonville
Climate Action Compact
Employment Development
Department EDD
Hartnell College
Keep Monterey County Clean
Mexican American
Opportunity Foundation
(MOAF)
Monterey Bay Fisheries Trust
Monterey Peninsula Unified
School District
Non-Profit Alliance of
Monterey County
South County Outreach Efforts
(SCORE)
Monterey Bay Air Resources
District
Center for Community
Advocacy (CCA)
Special Districts Association of Monterey
County Local Agency Formation Commission
Costanoan Rumsen Carmel Tribe Esselen Tribe of Monterey County 2022 UNDERSERVED COMMUNITIES
OUTREACH AND ENGAGEMENT PLAN 21
SAN BENITO COUNTY
San Benito COG
Boy Scouts of America-Silicon
Valley Monterey Bay Council
Community Food Bank San
Benito County
Dreams and Visions
Homeownership Center
Hollister Downtown
Association
San Benito County Community
Action Board (CAB)
The county office of Education
Seniors Council
Southside Parent Club
Water Resources Association
of San Benito County
Aromas San Juan Bautisa
Community School Foundation
California Farmlink
Community Foundation for
San Benito County
EDC of San Benito County
Jovenes de Antano Senior
Services
San Benito County Heritage
Foundation
Health Foundation
Slow Food San Benito County
Special Parents Information
Network (SPIN)
Women's Club of Hollister
San Benito Agricultural Land Trust
CasaMaria at Old Mission San
Juan Bautista
Community Services
Development Corporation
Friends of Southside School
Mexican American Committee
of Education
LULAC Council #2980
San Benito Resource
Conservation District
South County Cal-SOAP
United Way of San Benito
County
YMCA San Benito County
Youth Alliance
SAN LUIS OBISPO COUNTY
Bike SLO County Boys & Girls Club
Paso Robles Rotary Paso Robles Rotary Sunrise
Arroyo Grande Rotary Cuesta College
North County Realtors
Association
Paso Robles Library
SLO Climate Coalition
YMCA Hispanic Business Association Latino Outreach Council Paso People's Action - Mujeres
de Acci6n
ECOSLO
Grover Beach/Pismo Beach
Rotaries
Sierra Club
3C-REN
CAPS
Allies for Immigrant Justice
People's Self-Help Housing
SLO Rotary
Land Conservancy of SLO
Housing Authority of
San Luis Obispo
Air Quality Control District of
San Luis Obispo County
2022 UNDERSERVED COMMUNITIES
OUTREACH AND ENGAGEMENT PLAN
SLO County Promotores
Housing Authority of
San Luis Obispo
Scities Homeless Coalition
San Luis Obispo Council of
Governments
Housing Authority of Paso
Robles
First Five
Habitat for Humanity
22 SANTA BARBARA COUNTY
Montecito Rotary Club
CAUSE
Carpinteria Lions Club
Santa Barbara Foundation
United Way of Northern Santa
Barbara County
Community Environmental
Council
Solvang Rotary
Future Leaders of America
Latinx and Indigenous Migrant
Task Force on COVID-19
Santa Maria Rotary
League of Women Voters of
Santa Barbara
Cachuma Resource
Conservation District
Little House by the Park -
Guadalupe
Summerland Citizens
Association
Cuyama Valley Resource
Center
Blue Sky Center
First 5
Buellton Senior Center
Public Health Department
of SB County
Manufactured Homeowners
Team of SB County
Santa Barbara County Action
Network (SBCAN)
Vision y Compromiso
Isla Vista Youth Projects
Catholic Charities
YMCA of Santa Maria
Sierra Club
Planned Parenthood
People's Self-Help Housing
Santa Ynez Valley Association
of Realtors
Green Business Program
Santa Maria Senior Citizens
Club/Mobile Home Park
Owners Association
Los Amigos de Guadalupe
Latino Elders Outreach
Network
SB Bike Coalition
Oasis Senior Center
Santa Ynez Band of
Chumash Indians
community
Vandenberg Village
Community Services
Air Quality Control District
of SB County
Western Manufactured
Housing Communities
Association
2022 UNDERSERVED COMMUNITIES
Fund for Santa Barbara
Central Coast Green Building
Council
Santa Barbara County
Association of Governments
(SBCAG)
United Way of Santa Barbara
Santa Maria Lions
Allan Hancock College
Family Service Agency
Housing Authority of Santa
Barbara County
NAACP Santa Maria - Lompoc
Mixteco lndigena Community
Organizing Project
Mi Vida Mi Voz
Carpinteria Children's Projects
Montecito Association
Goleta and Carpinteria
Rotaries
Community Service Districts of
Santa Barbara County
Guadalupe Dunes Center
Los Olivos Community
Organization
Santa Ynez Valley People
Helping People
Food Bank of Santa Barbara
County
Retired Teachers Association
OUTREACH AND ENGAGEMENT PLAN 23
APPENDIX - ACKNOWLEDGEMENTS
Central Coast Community Energy offers its appreciation and gratitude to the following stakeholders who generously gave their time and lent their considerable expertise to the development of this plan:
• Brandon O'Rourke - Community Advisory Council and Ad Hoc Committee Member • Mike Termini - Community Advisory Council and Ad Hoc Committee Member • Katie Davis - Community Advisory Council and Ad Hoc Committee Member • Dennis Osmer, Central Coast Energy Services Executive Director • Richard Stedman, Monterey Bay Air Resources District Air Pollution Control Officer • Laura Selken - Senior Citizens Committee and Northern Santa Barbara Co. Homeowners Team Community Leader
• Ana Huynh - Mixteco lndigena Community Organizing Project Program Director • Jack Forinash - Blue Sky Center Executive Director
• Garett Wong, County of Santa Barbara Climate Program Manager • Michael Chiacos, Cameron Gray, Alhan Diaz-Correa, Ana Rico, Danny Ettelson at Community Environmental Council
• James Mulherin - University of California Santa Cruz Professor of Sociology • Justin Marquez, Former Community Development Manager at Marin Clean Energy • Sebastian Sarria, San Diego Community Power Programs and Policy Manager • Kirsten Andrews-Schwind, Peninsula Clean Energy Senior Manager of Community Relations
• Jessamyn Allen, Silicon Valley Clean Energy Decarbonization & Grid Innovation Program Manager
• Teresa Romero, Santa Ynez Chumash Environmental Office Environmental Director • Jim McNamara - Community Action Partnership of San Luis Obispo County Director of Energy Services
• Catalina Hubbard, San Luis Obispo Council of Governments Program Coordinator • VIDA Community Health Worker Program
• Housing Authority of Santa Barbara County
• Vision y Compromiso and Promotores of San Luis Obispo and Santa Barbara County • Allan Hancock College
• Los Amigos de Guadalupe
• Scities Homeless Coalition
• Santa Ynez People Helping People
• Paso People's Action
• Firsts
•
Independent Living Resource Center
• Isla Vista Youth Projects
• Carpinteria Children's Project
• United Way
Quarterly Regulatory and Legislative Update
June 15, 2022
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2 Table of Contents
REGULATORY UPDATE ..................................................................................................................................3 Integrated Resource Planning (IRP): GHG Reduction Planning ....................................................................3 Resource Adequacy (RA): Grid Reliability Planning ......................................................................................3 Provider of Last Resort and Western Community Energy Bankruptcy.........................................................4 Power Charge Indifference Adjustment (PCIA) ............................................................................................5 California Arrearage Payment Program........................................................................................................6 Arrearage Management Plan Program.........................................................................................................6 Percentage of Income Payment Plan Pilot Programs ...................................................................................7 CEC Load Management.................................................................................................................................7 LEGISLATIVE UPDATE....................................................................................................................................8 119 of 204
3 REGULATORY UPDATE
The regulatory space in the second quarter of 2022 was characterized even more than usual by regulator concern for the future and attempts to ensure stability. Months of debate over the best way to update the Resource Adequacy program, the California Public Utilities Commission’s (CPUC) main grid reliability planning program, produced a Proposed Decision that highlighted the uncertainty of future grid needs and erred on the side of caution. A conversation about how much money CCAs should pay upfront to cover the cost of transitioning their customers back to an IOU in the event of their sudden failure has picked up steam and urgency, with regulators seeking increasingly large amounts out of fear of further market disruptions. The California Energy Commission is seeking, for the first time, to require CCAs to offer certain types of rates in order to bolster grid reliability by increasing demand flexibility.
CCCE advocacy has focused on furthering grid reliability and decarbonization without unnecessarily creating new costs that must eventually be passed on to CCCE customers, nor allowing short-term concern about reliability to permanently erode jurisdictional limits on CPUC and CEC control over CCAs.
The list of activities described below is not comprehensive but represents the issues with the largest and/or most immediate impact to CCCE’s customers and operations. If Board members have questions or would like more detail on any of the issues covered, CCCE staff are available for further discussion.
Integrated Resource Planning (IRP): GHG Reduction Planning Integrated Resource Planning (IRP) is the CPUC’s process for ensuring that the electricity sector meets its portion of California’s 2030 greenhouse gas (GHG) reduction goals. Every LSE must submit an Integrated Resource Plan to the CPUC every two years detailing the resources it plans to procure through 2030 and demonstrating that these will produce GHG emissions at or below an assigned benchmark that is based on its proportional share of total statewide load.
The previous IRP cycle concluded in February 2022, with, among other findings, successful certification of CCCE’s 2020 IRP. The February Decision also opened a new IRP cycle and made substantial changes to the process, with the result that the next IRP will be due November 1, 2022. Since then, the Commission has been working on updating the templates and other compliance materials that LSEs must fill out and submit as part of their 2022 IRPs. These are scheduled to be released mid-June, after which work can begin on filling them out.
In the meantime, CCCE staff have been setting up the modeling infrastructure that will support development of the resource portfolios CCCE reports in the 2022 IRP. Some of CCCE’s load out to 2032, the time horizon of the 2022 IRP, is already accounted for without further decision-making courtesy of CCCE’s existing long-term contracts. For the remaining open position, CCCE staff will need to report planned future contracting and resource build such that the estimated GHG emissions of the total 2032 portfolio are at or below CCCE’s assigned GHG benchmark. To assist in this effort CCCE staff will be working with Ascend Analytics, a modeling consultant with whom CCCE has contracted for broader support of the Power Resources team. Ascend has a track record of successful work developing IRPs with other CCAs and will be a strong asset to CCCE staff as they develop CCCE’s 2022 IRP.
Resource Adequacy (RA): Grid Reliability Planning
Resource Adequacy (RA) is the CPUC’s main grid reliability planning program. The program is currently focused on ensuring that there is enough generating capacity available on the grid to meet the 120 of 204
4 forecasted peak demand. LSEs must buy and show to the Commission, each year, contracts for enough generating capacity to meet their proportion of the forecasted system peak load in each month.
The current RA system was designed when most of California’s resource fleet was fossil-fuel-based and could therefore run 24/7. In such an environment it was sufficient to focus on peak demand because generating capacity available at the peak could be assumed to be available in other hours as well.
However, this assumption has broken down as intermittent renewables such as wind and solar have claimed an increasingly large role in California’s grid. In a high-renewables system, reliability planning must look at all hours of the day because resource availability changes from hour to hour. Such planning must look not just at peak demand but especially at “net peak” demand, which is the peak demand after wind and solar generation have been netted off. Net peak demand generally occurs in the evening hours, when gross demand is below the daily peak, but still high but solar generation has dropped sharply to zero with sundown. Fast-ramping gas generation has historically been important for maintaining reliability during net peak demand hours because it can increase output quickly as solar generation drops. As gas generation retires, net peak demand has emerged as the most urgent reliability challenge for the California grid.
For the past two years the CPUC has been working on a comprehensive reform of the RA program designed to better account for these changes to the grid. In July 2021 it issued Decision 21-07-014, which selected a model called “slice-of-day” as the new direction for the RA program. 1 Slice-of-day will require LSEs to procure RA capacity that is committed to being available in specific hours in order for the RA program to ensure grid reliability throughout the day. However, many details of the slice-of-day model remained to be fleshed out at the time of the Decision, so a series of stakeholder workshops was held from September 2021 through January 2022, to discuss these further. Over the course of the workshops the conversation solidified around two competing proposals: one by Southern California Edison (SCE) dividing each day into 24 one-hour slices and one by Gridwell Consulting that was similar to the current RA structure but with an added slice during net peak (i.e., the “2-slice model”).
On May 20th, the Commission issued a Proposed Decision accepting the SCE 24-slice model as the final structure for the updated Resource Adequacy program. Though the general choice of slice-of-day was already known, there was enough difference between Gridwell and SCE’s proposals that this Proposed Decision constitutes major new policy. Starting in 2023 for a 2024 compliance test year, CCCE will receive a monthly RA requirement for each hour of the day rather than a single monthly requirement.
Each of CCCE’s resources will be assigned RA value according to the hours in which they are available, and CCCE will need to procure additional RA capacity for hours in which CCCE customer demand exceeds the forecasted generation of our resources. The Proposed Decision does not allow trading of single hours of RA capacity; LSEs must trade resources in 24-hour strips. This will increase the cost of compliance, and CCCE is working with other CCAs to explore whether a form of hourly trading can be made possible. The Proposed Decision can be voted on at the Commission as early as June 23, 2022.
Provider of Last Resort and Western Community Energy Bankruptcy “Provider of Last Resort,” or POLR, is the term used for the retail electric provider that ratepayers are transferred to if their chosen provider becomes unable to continue providing service. The investor-owned utilities (IOUs) were traditionally assumed to be the POLR should a CCA fail, and in 2019 this 1 D.21-07-014 available at 393334426.PDF (ca.gov)
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5 responsibility was made explicit through SB 520 (Hertzberg, 2019).2 SB 520 designated the IOUs as POLRs in their service territories and called on the CPUC to more clearly define POLR responsibilities, as well as outline a path for an LSE other than an IOU to eventually serve as POLR if desired.
In March 2021, the Commission opened Rulemaking 21-03-011, to implement SB 520. The proceeding is being conducted in two phases. Phase 1 will clarify the rules for the IOUs initially serving as the POLR and should conclude by the end of Q2 2023. Phase 2, not yet scheduled, will develop a process for other entities including CCAs to become POLR in the future. This proceeding has become particularly urgent after the June 2021 bankruptcy and subsequent deregistration of Western Community Energy, a CCA in Riverside County. Though SB 520 and R.21-03-011 had already been initiated, WCE’s dissolution put the POLR construct to the test and caused some stakeholders to call for more stringent oversight of CCAs.
The major issues at stake in this proceeding for CCAs are the scope of the POLR’s procurement responsibility and potential increases to the Financial Security Requirement (FSR). The FSR is an amount CCAs pay upfront to in cash or letters of credit to cover the cost of transitioning their customers back to the POLR in the event of sudden CCA failure. Calculation of the FSR estimates both the administrative costs of the transition as well as the cost of emergency resource procurement to cover the sudden increase in demand the POLR must serve.
Until recently the procurement portion of the FSR has been set at zero because market prices have been low enough that the POLRs,’ aka the IOUs,’ bundled generation rates were predicted to be sufficient to cover the necessary procurement. That left only the administrative costs, resulting in the FSR sitting at the Commission-set minimum of $147,000 ever since the current methodology was adopted in 2018.
However, the recent increase in global energy prices drove Southern California Edison to request a much higher number in the May 2022 biannual FSR calculation. CCCE’s FSR was raised to $2.8 million, and other CCAs with load in SCE’s service territory received significantly increased FSRs as well. FSR requirements for CCAs in PG&E and SDG&E’s service territories remained at the minimum $147,000 due to these IOUs’ higher bundled generation rates providing more of a buffer to offset increased procurement costs. CalCCA has protested these increases and a Commission decision is pending.
This series of events has highlighted the flaws in the current FSR methodology and made the FSR redesign that was already happening in the POLR proceeding that much more critical. Phase 1 ramped up in Q1 2022 and will run through Q1 2023. CCCE and CalCCA will be actively involved in helping design an improved methodology that does not depend so heavily on single market-forward price predictions at given points in time. CCCE is especially interested in demonstrating that an investment-grade credit rating, which validates a CCA’s financial health and risk management approach, should be used to reduce the FSR. Allowing load-serving entities with demonstrably lower risk of failing to post lower FSRs would free up that money to be invested in new resources, lower customer rates, and generate more overall benefit for Californians than it would in being used to meet FSR requirements.
Power Charge Indifference Adjustment (PCIA)3
2 Bill Text - SB-520 Electrical service: provider of last resort. 3 The Power Charge Indifference Adjustment is a fee paid by CCA customers. It represents the above-market costs of resources the relevant IOU purchased on behalf of the CCA’s customers before the CCA was formed and is designed to prevent cost shifts onto the IOU’s remaining bundled customers after the CCA forms and the CCA’s customers depart bundled service. The higher the PCIA, the lower the “headroom” between the total that CCCE customers pay (PCIA rate plus CCCE generation charges) and bundled customer generation rates.
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6 CCCE’s Application for Rehearing of CPUC Decision 21-05-030, which rejected key parts of the Phase 2 Working Group 3’s recommendation for the allocation of resources from the IOU’s PCIA portfolios, was denied by the Commission on April 7, 2022.456 On May 11, 2022, CCCE and San José Clean Energy filed a Petition for Writ of Review with the California 6th District Court of Appeal, seeking judicial review of the CPUC’s decision.7
CCCE continues to support Senator Anthony Portantino’s 2021 bill SB 612, which would give CCAs the choice to receive an allocation of those resources paid for through the PCIA by CCCE customers but retained by the IOUs.8 2022 is the second year of the two-year legislative session, so after passing the Senate in 2021 SB 612 will need to advance through the Assembly this year in order to become law. As of writing there has been no news from Senator Portantino’s office that he has found a solution in the Assembly Utilities and Energy Committee where the bill was denied a hearing in 2021.
California Arrearage Payment Program
In Q2 2022, the Department of Community Services and Development (CSD) completed distribution of the $993.5M the state budget allocated to the California Arrearage Payment Program (CAPP) in 2021 to defray energy debts accumulated during early phases of the pandemic. CCCE applied last year for $6,445,542 of this funding on behalf of CCCE customers but was allotted $2,915,136 (roughly 45% of the request). Due to the large amount of debt and number of applicants from LSEs, all applicants received 45% of the funds they applied for. CSD and the IRS have issued additional guidance that payments received through the CAPP program are considered qualified disaster relief payments that are nontaxable and excluded from a recipient’s gross income.9 By May 20th, CCCE had delivered $2,063,466.88 to indemnify active residential account debts and $697,208.01 for inactive residential account debts. The remaining $154,461.11 will be distributed to active commercial customers with qualifying debt in the coming months.
Governor Newsom’s proposed FY 2022-2023 budget includes $1.2 billion dollars for a second round of CAPP funding to continue alleviating energy utility arrearages accrued through December 31, 2021. His budget would make this additional funding available until June 30, 2025. The first round of CAPP implementation showed the program to be both efficient and successful at alleviating customer debt.
CCCE supports and is actively advocating for the Governor’s proposed second round.
Arrearage Management Plan Program
CCCE continues to participate in the Arrearage Management Plan (AMP), which allows customers to receive forgiveness for past-due bills in exchange for on-time payment of new bills over a specific time period. Customers who have received service for at least six months and made one previous full on-time 4 D.21-05-030 available at 385738144.PDF (ca.gov)
5 CCCE’s Application for Rehearing of D.21-05-030 is available at 389957193.PDF (ca.gov) 6 Decision rejecting CCCE’s Application for Rehearing is available at 467470751.PDF (ca.gov) 7 Court docket available at: California Courts - Appellate Court Case Information 8 Bill Text - SB-612 Electrical corporations and other load-serving entities: allocation of legacy resources. 9 For more information see the CSD CAPP Program Notice 2021-09 here:
https://www.csd.ca.gov/Shared%20Documents/CAPP-PN-2021-09.pdf and IRS Fact Sheet 2021-16 here:
https://www.irs.gov/newsroom/frequently-asked-questions-for-states-and-local-governments-on-taxability-and-reporting-of-payments-from-coronavirus-state-and-local-fiscal-recovery-funds. 123 of 204
7 payment in the previous 24 months may receive forgiveness for 1/12 of their initial arrearage balance (up to $8k) for every on-time payment of a new monthly bill. Administration of the AMP is conducted by PG&E and SCE, with CPUC oversight.
As of April 30, 2022, $142,858.48 of arrearages have been forgiven for 1,259 CCCE customers that have either completed the program or dropped off the program prematurely. CCCE began receiving remittance for these amounts the first week of May 2022.
Percentage of Income Payment Plan Pilot Programs
CCCE has been participating with both PG&E and SCE in a new pilot program called the Percentage of Income Payment Plan (PIPP).10 The goal of the pilot is to gather data to inform the development of a long-term PIPP program that 1) reduces residential disconnections, 2) encourages energy conservation and participation in energy saving and energy management programs, and 3) controls program costs and avoids arrearages and uncollectable bill debt.
PIPP customers receive a monthly bill cap based on a percentage of their income, standardized for two tiers of income (up to or over 100% Federal Poverty Level) and two household size categories (household of 1-2 or 3+ members).
The pilot program is open to CARE-eligible customers that either 1) are in zip codes with highest rates of recurring disconnections, or 2) were disconnected 2 or more times during the 12 months prior to the disconnection moratorium. CCCE has been allotted 515 customers in the PG&E service area and, pending approval by the CPUC, 28 customers in the SCE service area. Cost recovery for both bundled and unbundled participants will be through the electric Public Purpose Program (PPP) charge. The PPP is paid on the delivery side of the electricity bill by all ratepayers, both bundled and unbundled, and thus represents access to a new funding model for CCA affordability programs. CCCE has been participating in a bi-weekly PIPP Working Group which includes IOUs, CCAs, consumer advocates, and CBOs to make recommendations for long-term program design after the 48-month pilot.
CEC Load Management
CCCE, in partnership with CalCCA, is engaged in the California Energy Commission’s (CEC) proceeding to revise its Load Management Standards (LMS). Though the CEC is not generally authorized to set electricity rates, its statutory responsibility for promoting energy efficiency and load management/demand flexibility includes development of the Load Management Standards requiring certain rates structures to be made available. This has become germane to CCAs because the proposed amendments for the first time incorporate CCAs as “utilities” for the purpose of the LMS regulation, along with all IOUs and POUs. They also expressly require CCAs to comply with the LMS to advance the Commission’s goal of supporting grid reliability by improving demand flexibility.
The proposed LMS regulations mandate that all “utilities” – IOUs, POUs, and CCAs – develop optional rates for each customer class based on the hourly real time cost of energy. These rates are intended to incentivize customers to shift their energy usage to off-peak hours when the grid is under less strain. 10 The PIPP pilots were authorized in October 2021 by Decision 21-10-012, available here: 413823568.PDF (ca.gov)
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8 However, such rates have not been widely popular because small business and residential customers who lack the bandwidth and expertise to track hourly energy prices can end up paying more than they would have on a traditional tiered or time-of-use rate. Real-time rates have seen low enrollment at other LSEs.
CCCE has aided CalCCA in the submission of comments on the rulemaking challenging the jurisdictional authority of the Commission to require that CCAs implement specific rates. CalCCA also objects to the inclusion of CCAs in the definition of “Utility” and the application of Article 5 to CCAs, which effectively results in the application of additional load management standards to CCAs that are not being considered in the rulemaking (Sections 1622, 1624 and 1625). CalCCA has also worked to identify and communicate the technical infeasibility of CCAs developing and billing for such rates given IOU data access issues and technology shortfalls.
LEGISLATIVE UPDATE
The 2022 California legislative session has passed its’ procedural halfway point, with all bills required to pass their house of origin and move to the second house by May 27, 2022. Energy and climate have received strong attention this session, with the focus broadly shifting from setting ambitious end goals to assessing and ensuring the interim progress needed to achieve those already set. Bills centering on clean electricity, transportation and building electrification, and the equity and affordability of the decarbonization process have all had strong showings so far.
CCCE has been active on a selection of bills that are focused on either CCAs directly or on decarbonization. On the opposition side, the CCA community has successfully stopped two bills aimed at CCAs that CCCE believes would have had net negative impacts on affordability and/or decarbonization.
SB 881 (Min) was a broadly written bill that would have increased the CPUC’s authority to assign penalties and mandate additional resource procurement in the Integrated Resource Planning process without setting clear goalposts CCAs could meet to avoid those. After strong CCCE, CalCCA, and other CCA outreach, SB 881 was held on the Senate Appropriations suspense file and will not advance.
Similarly, SB 1287 (Bradford), a bill that would have significantly increased the Financial Security Requirement CCAs and direct access providers must pay upfront as insurance against their own failure, did not pass out of its first assigned policy committee.
On the support side, CCCE has been advocating in favor of the proposed $1.2 billion in additional utility arrearage relief that is currently included in both Governor Newsom’s and the legislature’s proposed budgets. This would be a second round of funding for the California Arrearage Payment Program (CAPP), through which CCCE customers have received almost $3 million in relief already. The Board also has before them a proposed Resolution in support of SB 1020 (Laird, Caballero, Durazo, and Atkins). SB 1020 would take the first steps towards funding a slate of climate- and equity-related public benefit programs through other sources besides electricity delivery rates, potentially bringing down total energy costs for all Californians.
CCCE staff have met so far this session with both the legislative offices representing CCCE communities and, through a CalCCA lobby day in March 2022, legislative leadership in both houses. Outreach on bills of interest will continue through the summer and the end of the legislative session on August 31, 2022. 125 of 204
Compiled Financial Statements 1
Compiled Budgetary Comparison Schedule 6
Budget Variance Commentary 9
Financial Dashboard 10
Investment Summary 11
Accounts Receivable Summary 12
Personnel Report 13
Table of Contents
TREASURER REPORT
Fiscal Year to Date
As of April 30, 2022
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1 ACCOUNTANTS COMPILATION REPORT
Board of Directors
Central Coast Community Energy
Management is responsible for the accompanying financial statements of Central Coast Community Energy (a California Joint Powers Authority) which comprise the statement of net position as of April 30, 2022, and the related statement of revenues, expenses, and changes in net position, and the statement of cash flows for the period 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.
Central Coast Community Energys 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 users conclusions about the Authoritys 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 Authority because we performed certain accounting services that impaired our independence.
Maher Accountancy
San Rafael, CA
May 23, 2022
1101 Fifth Avenue, Suite 200 San Rafael, CA 94901 415 459 1249 mahercpa.com 127 of 204
Current assets
Cash and cash equivalents $ 170,972,492
Accounts receivable, net of allowance 35,080,040
Accrued revenue 22,211,868
Loan receivable 199,700
Other receivables 285,000
Prepaid expenses 3,115,715
Deposits 2,942,750
Restricted cash 294,000
Total current assets 235,101,565
Noncurrent assets
Deposits 23,432
Loan receivable 1,800,300
Capital assets, net of depreciation 277,005
Total noncurrent assets 2,100,737
Total assets 237,202,302
Current liabilities
Accrued cost of electricity 30,254,369
Accounts payable 1,335,989
Other accrued liabilities 979,196
Customer rebate liabilities 304,288
User taxes and energy surcharges due to other governments 1,311,779 Total current liabilities 34,185,621
Noncurrent liabilities
Security deposits - energy suppliers 9,131,250
Total noncurrent liabilities 9,131,250
Total liabilities 43,316,871
Investment in capital assets 277,005
Restricted for security collateral 294,000
Unrestricted 193,314,426
Total net position $ 193,885,431
NET POSITION
As of April 30, 2022
STATEMENT OF NET POSITION
CENTRAL COAST COMMUNITY ENERGY
ASSETS
LIABILITIES
See accountants' compilation report. 2
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OPERATING REVENUES
Electricity sales, net $ 192,042,213
Liquidated damages 2,401,875
Total operating revenues 194,444,088
OPERATING EXPENSES
Cost of electricity 179,459,423
Contract services 4,676,193
Staff compensation 3,756,635
General and administration 2,850,173
Depreciation 53,050
Total operating expenses 190,795,474
Operating income (loss) 3,648,614
NONOPERATING REVENUES (EXPENSES)
Interest income 248,358
CHANGE IN NET POSITION 3,896,972
Net position at beginning of period 189,988,459
Net position at end of period $ 193,885,431
Seven Months Ended April 30, 2022
AND CHANGES IN NET POSITION
STATEMENT OF REVENUES, EXPENSES
CENTRAL COAST COMMUNITY ENERGY
See accountants' compilation report. 3
129 of 204
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers $ 195,796,341
Receipts from liquidated damages 2,401,875
Receipts from suppliers 7,795,965
Payments to suppliers for electricity (175,587,608)
Payments for other goods and services (9,471,399)
Payments for staff compensation (3,847,052)
Payments of taxes and energy surcharges to other governments (3,807,498) Net cash provided by operating activities 13,280,624
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Payments to acquire capital assets (1,113)
CASH FLOWS FROM INVESTING ACTIVITIES
Loan issued (2,000,000)
Interest income received 248,358
Net cash provided (used) by investing activities (1,751,642) Net change in cash and cash equivalents 11,527,869
Cash and cash equivalents at beginning of year 159,738,623 Cash and cash equivalents at end of period $ 171,266,492 Reconciliation to the Statement of Net Position
Cash and cash equivalents (unrestricted) $ 170,972,492
Restricted cash 294,000
Cash and cash equivalents $ 171,266,492
Seven Months Ended April 30, 2022
STATEMENT OF CASH FLOWS
CENTRAL COAST COMMUNITY ENERGY
See accountants' compilation report. 4
130 of 204
Operating income (loss) $ 3,648,614
Adjustments to reconcile operating income (loss) to net cash provided by operating activities
Depreciation expense 53,050
Provision for uncollectible accounts 828,197
(Increase) decrease in:
Accounts receivable 1,468,061
Accrued revenue (2,200,771)
Energy settlements receivable 7,856,108
Other receivables 634,329
Prepaid expenses (1,577,522)
Deposits (1,224,219)
Increase (decrease) in:
Accrued cost of electricity 1,604,945
Accounts payable 104,271
Other accrued liabilities 134,419
Customer rebate liabilities (2,003)
User taxes and energy surcharges due to other governments (146,855) Security deposits - energy suppliers 2,100,000
Net cash provided by operating activities $ 13,280,624
CENTRAL COAST COMMUNITY ENERGY
STATEMENT OF CASH FLOWS (continued)
Seven Months Ended April 30, 2022
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET
CASH PROVIDED BY OPERATING ACTIVITIES
See accountants' compilation report. 5
131 of 204
ACCOUNTANTS COMPILATION REPORT
Board of Directors
Central Coast Community Energy
Management is responsible for the accompanying special purpose statement of Central Coast Community Energy (a California Joint Powers Authority) which comprise the budgetary comparison schedule for the period ended April 30, 2022, and for determining that the budgetary basis of accounting is an acceptable financial reporting framework. 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 statement 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, a conclusion, nor provide any assurance on this special purpose budgetary comparison statement.
The special purpose statement is prepared in accordance with the budgetary basis of accounting, which is a basis of accounting other than accounting principles generally accepted in the United States of America. This report is intended for the information of the Board of Directors of the Authority.
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.
Central Coast Community Energys 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 users conclusions about the Authoritys 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 Authority because we performed certain accounting services that impaired our independence.
Maher Accountancy
San Rafael, CA
May 23, 2022
1101 Fifth Avenue, Suite 200 San Rafael, CA 94901 415 459 1249 mahercpa.com 132 of 204
2021/22 YTD Budget 2021/22 YTD Actual 2021/22 YTD Budget Variance (Under) Over 2021/22 YTD Actual / Budget % 2021/22 Annual Budget 2021/22 Budget Remaining 2021/22 Budget Remaining / Budget % REVENUES AND OTHER SOURCES Electricity sales 186,087,000 $ 195,017,793 $ 8,930,793 $ 105% 359,103,000 $ 164,085,207 $ 46% Less bill credit - - - 0% (3,085,000) (3,085,000) 100% Less uncollectible accounts (2,326,000) (2,891,665) (565,665) 124% (4,489,000) (1,597,335) 36% Revenue from damages - $ 2,401,875 2,401,875 n/a - (2,401,875) n/a Investment and miscellaneous income 301,000 248,358 (52,642) 83% 516,000 267,642 52% Total revenues and other sources 184,062,000 194,776,361 10,714,361 106% 352,045,000 157,268,639 45% EXPENDITURES AND OTHER USES Current Expenditures Cost of energy 178,150,000 179,632,024 1,482,024 101% 326,335,000 146,702,976 45% Energy programs (incentives and grants) 7,104,000 2,057,002 (5,046,998) 29% 12,270,000 10,212,998 83% Data manager 2,199,000 1,868,099 (330,901) 85% 3,774,000 1,905,901 51% Utility service fees 1,123,000 1,159,671 36,671 103% 1,893,000 733,329 39% Staffing 5,390,000 3,756,635 (1,633,365) 70% 9,244,000 5,487,365 59% Professional services 879,000 380,314 (498,686) 43% 1,393,000 1,012,686 73% Legal services 609,000 578,137 (30,863) 95% 1,037,000 458,863 44% Marketing and customer enrollment 554,000 379,807 (174,193) 69% 943,000 563,193 60% Other general & administration 967,000 1,014,650 47,650 105% 1,625,000 610,350 38% Total current expenditures 196,975,000 190,826,339 (6,148,661) 97% 358,514,000 167,687,661 47% Other Uses Capital outlay 59,000 1,113 (57,887) 2% 114,000 112,887 99% Uninterruptible Power Supply expenditures 1,633,000 2,000,000 367,000 122% 2,800,000 800,000 29% Total other uses 1,692,000 2,001,113 309,113 118% 2,914,000 912,887 Total Expenditures and Other Uses 198,667,000 192,827,452 (5,839,548) 97% 361,428,000 168,600,548 47% Surplus (Deficit) (14,605,000) $ 1,948,909 $ 16,553,909 $ (9,383,000) $ (11,331,909) $ 121% CENTRAL COAST COMMUNITY ENERGY BUDGETARY COMPARISON SCHEDULE Seven Months Ended April 30, 2022 See accountants' compilation report. 133 of 204
CCA Program Surplus/(Deficit)
per budgetary comparison schedule: $ 1,948,909
Adjustments needed to reconcile to the
changes in net position in the
Statement of Revenues, Expenses
and Changes in Net Position:
Subtract depreciation expense (53,050)
Add back capital asset acquisitions 1,113
Add back loans issued 2,000,000
Change in Net Position $ 3,896,972
REVENUES, EXPENSES AND CHANGES IN NET POSITION
CENTRAL COAST COMMUNITY ENERGY
BUDGET RECONCILIATION TO STATEMENT OF
Seven Months Ended April 30, 2022
See accountants' compilation report.
134 of 204
Budget Item YTD Variance Comment
Electric Sales Revenue 4.8% Sales revenue includes revenues actually billed to customers as well as estimated customer usage during the reporting period that is not yet billed.
Cost of Energy 0.8% Variances in this category are typically due to (1) timing difference between projected and actual REC deliveries, (2) variance from actual to anticipated market prices, and (3) variance from actual to expected volume used by customers.
Staffing (30.3%) Staffing expenses are under budget due to the timing of new hires.
Professional Services (56.7%) This category includes accounting, IT, technical and other consultants.
Legal Costs (5.1%) This category includes outside legal costs for regulatory and energy procurement needs.
Marketing and customer enrollment (31.4%) Variance is mostly due to the lower than anticipated costs of recent customer enrollments.
Data Management Services (15.0%) These fees non-discretionary and are charged on a per customer basis.
Utility Service Fees 3.3% These are PG&E and SCE fees charged on a per customer basis.
Other General & Administrative 4.9% This category includes occupancy costs, industry membership dues, and other general and administrative costs.
Energy and Related Programs (71.0%) Programs expenses have generally been delayed until future periods Budget Commentary for significant items
CENTRAL COAST COMMUNITY ENERGY
October 1, 2021 through April 30, 2022
135 of 204
136 of 204
Return of Investments YTD Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Money Market and other Interest Earning Accounts $ 248,358 $ 34,009 $ 33,104 $ 32,526 $ 31,581 $ 31,077 $ 38,817 $ 47,244 Funds Invested - Average Balance $ 170,609,000 $ 178,052,000 $ 172,266,000 $ 165,204,000 $ 167,506,000 $ 164,310,000 $ 159,591,000 Average APY 0.24% 0.22% 0.23% 0.23% 0.22% 0.28% 0.36% CENTRAL COAST COMMUNITY ENERGY Investment Summary October 1, 2021 through April 30, 2022 137 of 204
Total 0-30 31-60 61-90 90-120 Over 120
Accounts Receivable, net 35,080,000 27,304,000 2,673,000 2,032,000 2,005,000 1,066,000 Period % 100% 78% 8% 6% 6% 3%
As of April 30, 2022
Accounts Receivable Aging Report
CENTRAL COAST COMMUNITY ENERGY
DAYS
138 of 204
Report Item 11
TO: CCCE Policy Board of Directors
FROM: Seth Capron, Community Advisory Council Chair
SUBJECT: Community Advisory Council's Report (Discussion Item) DATE: June 15, 2022
At the June CAC meeting, Norm Groot’s term as chair was completed and a new chair and vice chair were elected. The CAC gave a round of thanks to Norm for his steady hand on the tiller, gracefully presiding over our meetings for the last two years. Katie Davis from Santa Barbara County was elected vice chair, and I was elected chair. Katie and I look forward to working productively in our new leadership positions with members the Policy and Operations Boards, Mr. Habashi, Mr. Shaw and the rest of the staff.
COO Robert Shaw provided a report on the challenges involved in potential delays or cancellations with our PPA contracts for renewable power and energy storage. This is clearly the most pressing issue CCCE is facing at this time, as I'm sure you are all aware. Staff also provided the CAC with a number of reports on various aspects of our energy programs, including the Residential Electrification Program, the Community Education and Workforce Grant Program, the Member Agency Planning, Implementation, and Innovation Grant Program and a new initiative to provide technical support facilitating multi-family and public charger installations. I'm sure staff will be providing you with reports on all of these developments in our energy program offerings. When comparing the status of our overall energy programming now to just two years ago, it is truly remarkable the breadth and scale to which staff has ramped up our offerings in a relatively short period of time. Not only are we offering a large variety of programming, but we are also seeing a significant upswing in customer participation levels. The addition of 2% of annual revenues for member agency programming funds has substantially increased our opportunities for moving the needle on climate emissions.
I want to highlight two of the reports provided by staff to the CAC at our meeting. The first is the FY 20- 21 Energy Programs Portfolio Evaluation. An ongoing, results-based process of evaluating the effectiveness of our energy programming was one of the recommendations of the CAC ad hoc 139 of 204
committee on programming. Staff put considerable effort into creating a comprehensive review of our programs from the previous fiscal year, collaborating with a CAC ad hoc committee made up of Heather Allen, Richard Stedman, and Norman Tuitavuki. Programs were rated on the amount of CO2 reduction in metric tons and equity in serving all customers. Observations were provided on successes and failures, and recommendations presented for specific future program improvements. In the CAC discussion, it was noted that greenhouse gas reductions measured from incentivized activities don't always reflect the potential big picture effect of our programs kickstarting specific markets. It was recognized by staff that program evaluation will be an iterative process as we learn more every year.
The FY 20-21 Energy Programs Portfolio Evaluation and Report was brought to the CAC as an action item, and we approved supporting this plan as it moves forward to the Policy Board for adoption.
One of the most striking outcomes of the FY 20-21 program year in the Program Evaluation Report was the fact that over 40% of incentive dollars went toward projects supporting underserved customers and communities. This dovetails into the second report I wanted to highlight. Staff has produced an in-depth CCCE Underserved Communities Outreach and Engagement plan. This effort has been supported since August by a CAC ad hoc committee made up of Brandon O'Rourke, Katie Davis, and Mike Termini. The CAC strongly supports staff's ongoing efforts to make sure CCCE programs and services have full participation by our underserved customers. This report identifies and defines our underserved communities, frames the challenges to connecting with them, and proposes strategies to achieve our goals. The report recognizes that these efforts are a work in progress, and that it will need to be updated regularly. I believe that electrification of our underserved communities is the biggest program challenge CCCE faces, and applaud staff for bringing a concerted focus to this area.
The CCCE Underserved Communities Outreach and Engagement Plan was brought to the CAC as an action item, and we approved supporting this plan as it moves forward to the policy board for adoption. 140 of 204
MINUTES
The meeting was called to order at 10:30am with 15 members attending via teleconference pursuant to AB 361 and a quorum established.
Directors Present: Pia, Espinosa, Greene, Hill, Lewis, McKee, Mendez, Miller, Miyasato, Norgaard, Rerig, Stilwell, McCloud, Vice Chair Goldstein, Chair Palacios
Directors Absent: Bradford, Huffaker
The Chair opened the public comment period for items not listed on the agenda or public comments on the consent agenda.
No public comment received.
The Chair closed public comment period.
Clerk announced that there were no corrections or additions to the agenda
CONSENT AGENDA
MOTION: Moved by Director Mendez Seconded by Director Lewis to approve the Consent Agenda.
ACTION: The Motion Carried with a roll call vote: 15/0/2 AYES: Pia, Espinosa, Greene, Hill, Lewis, McKee, Mendez, Miller, Miyasato, Norgaard, Rerig, Stilwell, McCloud, Vice Chair Goldstein, Chair Palacios
NOES: None
ABSENT: Bradford, Huffaker
1. Approved Minutes from the April 13, 2022, Meeting of the Operations Board with the addition of Member Norgaard’s Presence. Member Norgaard arrived at the April 13, 2022 meeting at 9:35am which is noted in the meeting minutes submitted in the packet.
2. Authorized CEO to Execute, in a Form Substantially Similar to the Attached and Approved by the CCCE General Counsel, 1) a Joint Community Choice Aggregation Cost-Sharing and Reimbursement Agreement Operations Board of Directors
Wednesday, May 11, 2022
10:30 AM
Central Coast Community Energy
70 Garden Court, Suite 300
Monterey, CA 93940
141 of 204
and 2) Addendum 1 for CCCE's Proportional Share of Joint Portfolio Management and Regulatory Services provided by The Energy Authority, Inc. in an Amount Not to Exceed $60,450 per year for a Three-Year Term
3. Authorized the CEO to 1) Execute an Agreement a Two-Year Agreement with Frontier Energy Inc. to Provide Technical Assistance and Program Implementation Services to Support CCCE Transportation Electrification Programs in an Amount Not to Exceed $239,378, and 2) Execute up to One (1) One (1) Year Amendment that Does Not Substantially Change the Scope of Services or Increase the Not to Exceed Amount
4. Found, Pursuant to AB 361 and in order for the Operations Board of Directors to Continue Meeting Remotely, that the COVID-19 Pandemic State of Emergency Declared by Governor Newsom is Still In Effect; The Operations Board of Directors has Reconsidered the Circumstances of the State of Emergency; and the Monterey County Health Officer Continues to Recommend Social Distancing Measures for Meetings of Legislative Bodies
REGULAR AGENDA
5. CEO's Report
a) Potential Impacts of Market Volatility
b) Update on CAC Ad Hoc Committee
Chair opened public comment period.
The following individual(s) addressed the Board
Jill ZamEk
John Smigelski
Beverly DesChaux
Chair closed public comment period.
ACTION: Discussion Item; No Action Required
6. Authorized the CEO to Execute A Municipal Financial Consultant Agreement with PFM Financial Advisors, LLC for a Two-Year Term and a Not to Exceed Amount of $350,000 Chair opened public comment period.
There was no public comment.
Chair closed public comment period.
MOTION: Moved by Director Miyasato, Seconded by Director Lewis to approve ACTION: The Motion Carried with a roll call vote: 16/0/1 AYES: Bradford (arrived at 11:14 am), Pia, Espinosa, Greene, Hill, Lewis, McKee, Mendez, Miller, Miyasato, Norgaard, Rerig, Stilwell, McCloud, Vice Chair Goldstein, Chair Palacios NOES: None
ABSENT: Huffaker
142 of 204
7. Approved Supporting Policy Board Approval of CCCE Turnkey Ownership Model for Front of the Meter Energy Storage Assets
Chair opened public comment period.
The following individual(s) addressed the Board
Beverly DesChaux
John Smigelski
Brett Garrett
Chair closed public comment period.
MOTION: Moved by Director Mendez, Seconded by Director Miyasato to approve ACTION: The Motion Carried with a roll call vote: 14/0/3 AYES: Pia, Espinosa, Greene, Hill, Lewis, McKee, Mendez, Miller, Miyasato, Norgaard, Rerig, Stilwell, McCloud, Vice Chair Goldstein, Chair Palacios
NOES: None
ABSENT: Bradford (left at 11:37am), Huffaker, McCloud (left at 11:28am)
8. Adopted Resolution No. OB-2022-01 Delegating to the CEO Certain Contract Administration Authority to Resolve Disputes and Potential Delays on Existing Power Purchase Agreement and to Enter Specialized Legal Services Agreements for Support
Chair opened public comment period.
There was no public comment.
Chair closed public comment period.
MOTION: Moved by Director Pia, Seconded by Director Norgaard to approve ACTION: The Motion Carried with a roll call vote: 14/0/3 AYES: Bradford (returned at 11:50am), Pia, Espinosa, Greene, Hill, Lewis, McKee, Mendez, Miller, Miyasato, Norgaard, Rerig, Stilwell, Vice Chair Goldstein, Chair Palacios NOES: None
ABSENT: Huffaker, Rerig (left at 11:40am), McCloud
Adjournment 11:52am
143 of 204
Staff Report Item 13
TO: CCCE Policy Board of Directors
FROM: Tom Habashi, Chief Executive Officer
SUBJECT: CEO's Report (Discussion Item)
DATE: June 15, 2022
POTENTIAL IMPACTS OF MARKET VOLATILITY
Several counterparties to CCCE power purchase agreements and/or energy storage service agreements have notified CCCE of what the counterparties claim are exigent circumstances impacting the various PPA/ESSA related projects.
The counterparties are citing the unprecedented volatile market conditions spurred by COVID 19, supply chain disruptions, California Public Utilities Commission (the “Commission”) Mid Term Reliability procurement mandate, interconnection and permitting delays, international tariff enforcement, as well as escalating material costs due to the war in Ukraine as justification for requesting excused delays to commercial operation. Some counterparties are further demanding to renegotiate core contract terms (product, quantity, price, term) under threat of completing and reselling the project rather than honoring their contract obligations to CCCE.
Negotiations around PPAs, regulator response, and power supply costs are likely to exceed the forecasted costs and consequently reduce the 2.3 ¢/kwh rate reduction scheduled for January 2023.
Staff is working with developers to determine pre-commercial operation solutions to market constraints to existing PPAs/ESSAs. Staff is further working with the California Public Utilities Commission, CalCCA, legislators and the Governor’s Office to explore regulatory, legislative, and other enforcement solutions to address the fundamental market issues, curb opportunistic behavior, and protect customers.
RATES EXPECTATIONS FOR FY 22-23
Market volatility and price levels have increased since the last rate-related Board update in December 2021. Natural gas prices, which are a material driver of California power prices, are near 14-year highs – with gas in storage 17% below 2021 levels and 15% below the 5-year average, as of May 27. For 144 of 204
reference, the price for next-month Henry Hub gas futures has increased from $3.80/MMBtu on December 15, 2021, to $8.70/MMBtu on June 1, 2022. Another year of low precipitation continues to pressure hydro generation, which traditionally supplies almost 20% of California’s needs. Uncertainty around which renewable projects will come online and the impact of solar tariffs is also weighing on power markets. These factors are reflected in very high forward prices for the 2023-24 period; in effect, there is a significant risk premium built into forward prices. CCCE has continued to follow its Energy Risk Management Policy of progressively hedging through time, steadily reducing its open position. Even with that approach, the impact of power prices on the total cost of energy remains significant.
Therefore, the ability to roll back the temporary rate adder of 2.3 ¢/KWh for 2022 has been reduced.
Staff continue to analyze ways to manage costs and reduce risks, with the goal of rolling back some proportion of the rate adder while maintaining competitiveness with PG&E and SCE rates. A variety of rate and market scenarios are being analyzed, with the goal of providing a final proposal to the Board in September.
SCE COST OF SERVICE
Staff has been developing a new Cost of Service model for the SCE service area, with the plan to introduce new Cost of Service based rates in January 2023. This is the natural evolution of the shift to Cost of Service across CCCE’s entire service area – a shift that began with PG&E moving to Cost of Service in March 2022. The fundamental framework and models are complete and undergoing testing.
However, the uncertainty and volatility in markets as well as the extent of the potential rate rollback will impact SCE rates. Staff will be conducting a joint PG&E/SCE rate analysis, incorporating a range of market scenarios, through July and August. A new proposed set of rates will be provided to the Board in September.
STAFFING CHALLENGES
2022 is the third consecutive year that COVID-19 continues to impact recruiting and staff retention.
CCCE is experiencing a roughly 33% vacancy rate with unfilled positions in nearly every department except for Energy Programs. Critically, recruitments for highly specialized positions are failing to attract sufficiently qualified candidates. Moreover, most candidates are “passive” candidates, meaning they are currently employed and may not need a new job. The market’s focus on “passive” candidates has also resulted in high performing CCCE staff being lured to other positions.
Staff is working with Regional Governmental Services to close open recruitments and improve our employee retention figures by evaluating our job listing marketing and outreach, improving our candidate experience, and reviewing salaries and benefits. 145 of 204
ATTACHMENT(S):
1. Customer Enrollment & Engagement May 2022
2. Update on CCCE Energy Programs
3. CCCE Member Agency Services Update Attachment
4. CCCE Contracts < $100k
146 of 204
CUSTOMER ENROLLMENT &
ENGAGEMENT
MAY 2022 UPDATE
iJ Central Coast
Commun1ity
Energy
MEMBER AGENCY OUTREACH
Member Agency Services Engagement
Meetings held with Member Agency Staff:
City of Capitola, February 4
City of Del Rey Oaks, February 7
City of San Benito, February 7
City of Goleta, February 10
City of Santa Cruz, February 10
City of Carmel-by-the-Sea, February 15
City of Seaside, February 16
City of Pacific Grove, February 18
City of Hollister, February 25
County of Santa Barbara, March 4
City of San Luis Obispo, April 27
Member Agency Working Groups
Fleet Electrification -April 1
st at 1 pm
Reach Codes -April 2&h at 1 pm
Reach Codes -May 1 9th at 1 pm
Fleet Electrification -June 2
nd @ 1 pm
Annual Presentation
City of Marina
City of Guadalupe
City of Arroyo Grande
City of Pacific Grove
City of Gonzales
City of Morro Bay
City of Sand City
City of Carpinteria
City of Paso Robles
City of Hollister
City of Pismo Beach
City of San Juan
Bautista
City of Solvang
City of Del Rey Oaks
City of Grover Beach
City of Buellton
City of Monterey
City of Santa Maria
City of Soledad
City of Seaside
Energy Programs Engagement
Medium-Duty/Heavy-Duty Vehicles
Applications received for Transit Bus, Street
Sweeper, and two Resource Recovery vehicles
• Central Coast Community
Energy
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200
150
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COMMERCIAL/
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AGRICULTURAL
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FEBRUA
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372
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MARCH
285
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169
26 1
ARROYO GRANDE --------------------------97.88%
BUELLTON ----------------------------------98.90%
CAPITOLA ----------------------------------98.23%
CARMEL ------------------------------------99.00%
CARPINTERIA --------------96.26%
DEL REY OAKS -----------------------------98.31%
GOLETA ----------------96.47%
GONZALES -----------96.15% ---------------------•97.31% -------------------------------98.44%
GREENFIELD
GROVER BEACH
GUADALUPE
HOLLISTER
MARINA
MONTEREY
MORRO BAY
-----------------------------------99.05%
PACIFIC GROVE
PASO ROBLES
PISMO BEACH
SALINAS
SAN JUAN BAUTISTA
SAN LUIS OBISPO
SAND CITY
SANTA CRUZ
SANTA MARIA
SCOTTS VALLEY
SEASIDE
SOLEDAD
SOLVANG
MONTEREY CO
SAN BENITO CO
SANTA BARBARA CO
SANTA CRUZ CO
WATSONVILLE
------------96.21% --------------------------97.86%
------------------96.87%
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• • • I
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94.83% 95.33% 95.83% 96.33% 96.83% 97.33% 97.83% 98.33% 98.83% 99.33%
ARROYO GRANDE INC
CAPITOLA INC
CARPINTERIA
GOLETA
GREENFIELD INC
GUADALUPE INC
MARINA INC
MORRO BAY INC
PASO ROBLES INC
SALINAS INC
SAN LUIS OBISPO INC
SANTA CRUZ INC
SCOTTS VALLEY INC
SOLEDAD INC
UNINC MONTEREY CO
UNINC SANTA ..
WATSONVILLE INC
0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00%
98.19%
99.62%
97.43%
98.03%
91.12%
98.68%
84.15%
98.66%
98.12%
98.64%
99.56%
96.32%
93.70%
94.06%
97.61%
98.71%
96.27%
98.76%
95.49%
95.77%
97.01%
85.90%
95.92%
94.00%
93.17%
96.98%
87.97%
94.08%
94.37%
97.48%
85.11%
94.51%
91.80%
90.00% 100.00% 110.00%
� EMAIL OUTREACH
OPEN CLICK-SUBJECT RATE THROUGH
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Community Advisory Council Mee 49% 5%
ting Notification
May Newsletter 51% 6%
CAPP Credit Notification Email 50% 1%
Operations Board of 55% 7%
Directors Meeting Notification
April Newsletter 51% 7%
Best "Open Rate" Performance: Operations Board of
Directors Meeting Notification
Best "Click-Through Rate" Performance: Operations
Board of Directors Meeting Notification and April
Newsletter
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Radio Bronco Spanish 40
EARNED MEDIA
CCCE Awards Funding
for Nine Electric School
Buses
KSBW
Monterey County Weekly
CCCE Contributes to New All-Electric Housing Development in Santa Cruz
KION
Santa Cruz Sentinel
Univision
COMMUNITY
ENGAGEMENT
EVENTS
San Luis Obispo Chamber Business Expo,
May 18
Farmworker Outreach, May 19
TO: Policy Board of Directors
FROM: Tom Habashi, Chief Executive Officer
DATE: June 15, 2022
RE: Update on CCCE Energy Programs
ENERGY PROGRAMS UPDATE:
Staff continues to develop and implement CCCE’s FY 21/22 suite of Energy Programs for a broad range of customers to advance building electrification, transportation electrification, agricultural electrification, and community resiliency. Provided in this memorandum is an update on recent energy programs implementation activities.
Electrify Your Ride Program
On November 9, 2021, CCCE staff launched the next iteration of the Electrify Your Ride Program.
Building off of last year’s program, the Electrify Your Ride Program provides rebates to CCCE customers who purchase or lease an electric vehicle (EV). This program also incorporates rebates for Level 2 EV Chargers, as well as related home electrical upgrades - such as panel upgrades and wiring – to support “EV Readiness”. A new offering of the Electrify Your Ride Program includes rebates for electric bicycles (E-bikes) for residents.
Residential, commercial/agricultural, and public agency customers are welcome to apply. Higher incentive amounts are available through this program for income-qualified customers to promote greater adoption of transportation electrification in disadvantaged and low-income communities. In FY 21/22, CCCE budgeted a total of $3.1 million with $2.85 million allocated for customer incentives. Funds will remain available through September 30, 2022, or until funds are fully reserved. The following tables summarize program performance based on approved applications. 157 of 204
Figure 1 (above): Shows Electrify Your Ride funds distributed by County in FY 21/22.
Figure 2 (above): Shows Electrify Your Ride funds approved by status. Approved for Payment includes funds that have been approved but not yet sent out for payment; Submitted for Payment includes funds that have been sent out for payment; Project Complete provides for funds that have been received by the applicant. 158 of 204
Figure 3 (above): Shows Electrify Your Ride Program funds distributed by Measure type in FY 21/22.
Figure 4 (above): Shows a breakdown of funds distributed to income qualified applicants. Tier 1 = 201 - 400% FPL; Tier 2 = <200% FPL; N/A = Non-Income Qualified applicants
Figure 5 (above): Shows estiamted annual GHG emissions reductions (MTCO2e) by County resulting from reduced vehicle emissions under the Electrify Your Ride Program in FY 21/22. 159 of 204
Electric Vehicle Supply Equipment Technical Assistance
On May 15, 2022, the Operation Board of Directors authorized CCCE staffs’ recommendation to enter in a two-year agreement with Frontier Energy Inc (“Frontier”) in an amount not to exceed $240,000.
Frontier will support CCCE’s existing EV infrastructure programs by identifying viable project sites at multifamily and public-facing properties, providing outreach and education to property owners, offering free site assessments for EVSE projects, connecting property owners with EVSE installation vendors, and facilitating installer quotes. Additionally, Frontier will provide services to implement budgeted program funds for publicly accessible EVSE in the Monterey Bay Area. This is intended to complement the CALeVIP – South Central Coast Incentive Project, which is currently being implemented in San Luis Obispo and Santa Barbara Counties.
New Construction Electrification Program
On October 5, 2021, CCCE launched the third iteration of the New Construction Electrification Program (NCEP). Through a first-come-first-served application process, the NCEP provides housing developers incentive funds to build all-electric housing. Like previous iterations of the program, projects must be built to all-electric standards for all energy utility needs including but not limited to water heating, space heating, and cooking appliances. This year, incentives are available only for affordable housing units.
A $2,500 incentive will be provided on a per unit basis and will be provided “downstream” to developers upon successful completion of the project. In FY 21/22 a total of $1.5 million is available to housing developers and will remain available through September 30, 2022, or until funds are fully reserved. The following tables summarize program performance based on approved applications.
Figure 6 (above): Shows New Construction Electrification Program funds reserved by County. Note: Funds are distributed upon project completion. Projects typically take between 2 – 5 years to complete. 160 of 204
Figure 7 (above): Shows estimated annual GHG emissions reductions by County resulting from increased all-electric housing under the New Constuction Electrification Program in FY 21/22.
Agricultural Electrification Program
On October 5, 2021, staff launched the third iteration of the Agricultural (Ag) Electrification Program.
The Ag program provides incentives to CCCE customers for replacement of fossil fuel powered agricultural equipment with new electric equipment including irrigation pumps, farm tools, utility vehicles and other equipment. Incentives will be provided “downstream” directly to the customer after proof of purchase and/or installation of equipment.
The incentive is open to CCCE customers whose primary business is agriculture production and/or agriculture processing. This year, eligible customers will receive between 70 – 100% of the total project cost up to $30,000 for qualifying projects. Applications submitted by small businesses with higher impact projects - in terms of greenhouse gas emissions reduction – will be supported by the highest incentive levels. In FY 21/22, a total of $600,000 is available for incentives and will remain available through September 30, 2022, or until funds are fully reserved. The following tables summarize program performance based on approved applications.
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Figure 8 (above): Shows Ag Electrification Program funds reserved or distributed by County in FY 21/22.
Figure 9 (above): Shows Ag Electrification Program funds approved by status. Funds Reserved includes funds that have been approved but not yet paid out (project still not complete); Submitted for Payment includes funds that have been sent out for payment; Project Complete includes funds that have been received by the applicant.
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Figure 10 (above): Shows Ag Electrification Program funds reserved or distributed by equipment type in FY 21/22.
Figure 11 (above): Shows estimated annual GHG emissions reductions by County resulting from ag equipment fuel switching under the Ag Electrification Program in FY 21/22. 163 of 204
Figure 12 (above): Shows the amout of funds reserved or distributed to Small Businesses (“Yes”) compared to larger businesses (“No”). Small Business is defined under Government Code Section 14837(d)(1).
Electric School Bus Program
On October 5, 2021, CCCE launched the third iteration of the Electric School Bus Program. This program provides public schools and school districts enrolled in CCCE service with an opportunity to receive funding for the purchase of an all-electric school bus. The Electric School Bus Program is intended to reduce GHG emissions from school buses, as well as eliminate harmful pollutants emitted by traditional diesel buses near students. CCCE will contribute up to 50% of the cost, not to exceed $200,000 for each school bus.
In May 2022, CCCE closed the Electric School Bus Program after receiving and approving nine (9) applications totaling over $1.45 million in requests. Funds will be distributed directly from CCCE to the bus manufacturer of the awardee’s choosing on behalf of the awardee. The following tables summarize program performance based on approved applications.
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Figure 13 (above): Shows Electric School Bus Program funds reserved, by County in FY 21/22. Note: funds are not anticipated to be distributed/paid in FY 21/22 for newly submitted applications. Funds are distributed upon manufacture and delivery of the school bus. Due to supply chain shortages, buses typically take between 1 – 3 years to complete.
Figure 14 (above): Shows the number of Electric School Buses reserved in each County under the FY 21/22 Electric School Bus Program.
CALeVIP – South Central Coast Incentive Project
On August 5, 2021, CCCE – in coordination with State and regional funding partners – launched the CALeVIP – South Central Coast Incentive Project (SCCIP). Implemented by the Center for Sustainable Energy (CSE), this program follows the FY 19/20 CALeVIP – Central Coast Incentive Project to provide incentives for public DC Fast Chargers and Level 2 Electric Vehicle Chargers. CALeVIP – SCCIP will make a total of $12 million in funds available over two years in San Luis Obispo, Santa Barbara, and Ventura 165 of 204
counties. CCCE is contributing $1,750,000 with our funds available only to CCCE customers and 50% of the funds dedicated to disadvantaged and low to moderate income communities.
On the first day after launching the SCCIP, the program saw over 250 applications and an oversubscription for DC Fast Charger funds. At this time, all funding is reserved. CSE is moving to finalize funding approval and distribute funding to approved projects.
Community Education and Workforce Grant Program
On December 9, 2021, CCCE launched the second iteration of the Community Education and Workforce Grant Program (“Grant Program”). The purpose of the Grant Program is to provide support for organizations to address education and outreach barriers that impact CCCE Energy Programs focused on Electrification, as well as to address gaps in local workforce training and development slowing the advancement of electrification of the building and/or transportation sectors. A total of $400,000 has been made available for the Grant Program, with a maximum grant amount of $100,000 per grant recipient geared towards encouraging more workforce development proposal submissions. The application closed on February 7, 2022, and CCCE received ten (10) applications requesting a total of $699,029.
After a thorough application review process, CCCE staff selected six grant recipients for the FY 21/22 Community Education and Workforce Grant Award recipients are provided in the table Recipient Name Project Title Total Funding
Approved
Green Light Labs, LLC.
Electrifyze: Consumer EV Education & EV
Workforce Development for a Fossil Fuel Free
Central Coast $100,000
Romero Institute Electrify my Home! / ¡Electrifica mi casa! $30,000 CalBike EZBike Project $50,000
Santa Barbara Foundation
Partners In Education, Energy Sector Job
Readiness, and Internship Project $50,000
Community Bridges
Family Resource Collective Outreach Program for
Electrification Awareness $100,000
United Way of Santa Barbara County Fun in the Sun 2022 $20,000 Total $350,000
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Energy Programs Launch Schedule
The table below provides a launch status overview for FY 21/22 Energy Programs:
Program Launch Schedule
Light-Duty Electric Vehicle Public Charging
Launched 8/5/2021
Agriculture Electrification Program Launched 10/5/2021
Electric School Bus Program Launched 10/5/2021
New Construction Electrification Program Launched 10/5/2021 Light-Duty Electric Vehicle and Private Charging Program ("Electrify Your Ride") Launched 11/9/2021
Energy Education, Workforce Development, and
Innovation Program (Grant Programs) Launched 12/9/2021
Residential Electrification Program June 2022
Battery Storage Pilot Program TBD
Summer Readiness Program TBD
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TO: CCCE Policy Board of Directors
FROM: Tom Habashi, CEO
DATE: June 15, 2022
RE: CCCE Member Agency Services Update Attachment
MEMBER AGENCY SERVICES UPDATE
On December 16, 2021, CCCE launched Member Agency Services (MAS). This comprehensive offering enables CCCE to proactively engage its 33 Member Agencies in program design, utilization, outreach, and support for non-program initiatives designed to reduce greenhouse gas emissions and the reliance on fossil fuels. CCCE has launched a new standalone webpage to fully communicate MAS efforts:
https://3cenergy.org/member-agency-services/
Existing program offerings under MAS include:
Greenhouse Gas Inventory
Reach Code Program
Planning, Implementation, and Innovation Grant Program
Light-Duty Electric Vehicle Program
Medium and Heavy-Duty Electric Vehicle Program
In addition to programs, MAS will support Member Agencies in other initiatives furthering CCCE’s strategic goals, including data access and analysis, and regional policy making support.
Provided in this memorandum is an update on recent Member Agency Services implementation activities.
Light-Duty Electric Vehicle Program
As of 6/03/2022, CCCE has received applications from the City of Watsonville and from the Counties of Monterey and Santa Barbara to support the purchase of electric fleet vehicles and electric vehicle charging equipment. Staff are reviewing applications and working closely with Member Agency staff to ensure eligibility, process applications, and reserve funding. Staff is also actively conducting outreach to and supporting other Member Agencies with anticipated applications. 168 of 204
As of 6/03/2022, CCCE has received five applications; one each from the Cities of Santa Cruz, Capitola, Watsonville, Guadalupe, and Carmel-by-the-Sea. Three of these applications have been approved with reserved funding. Staff are reviewing applications and working closely with Member Agency staff to ensure eligibility, process applications, and reserve funding. This program is now fully subscribed and closed for FY 21/22. Staff look forward to offering this program again next fiscal year, starting October 1 st, 2022.
Member Agency
Applicant
Project Description Amount Reserved
City of Santa Cruz Trash Hauler $ 250,000
City of Capitola Street Sweeper $ 250,000
City of Watsonville Trash Hauler $ 250,000
Planning, Implementation, and Innovation Grant Program
On December 9, 2021, CCCE launched the first iteration of the Planning, Implementation, and Innovation Grant Program (Grant Program). The purpose of the Grant Program is to provide CCCE Member Agencies with support for planning and implementation related to the electrification of municipal fleets, properties, and community infrastructure. A total of $600,000 has been made available for the Grant Program, with a maximum grant amount of $150,000 per grant recipient. The application closed on February 7, 2022, and CCCE received nine (9) applications requesting a total of $942,033.
After a thorough application review process, CCCE staff selected six grant recipients for the FY 21/22 Community Education and Workforce Grant Award recipients are provided in the table Recipient Name Project Title Total Funding
Approved
County of Monterey
Strategic Planning to Overcome
Barriers to Deep Decarbonization $ 150,000
City of Santa Cruz
Master Municipal Transportation
Electrification Plan $ 75,000
City of Watsonville
Existing Buildings Electrification Pilot in
the City of Watsonville $ 150,000
City of Watsonville*
Regional Climate and Electrification
Grant Administration $ 100,000
City of San Luis Obispo
Fleet Electrification Infrastructure
Roadmap $ 70,000
County of Santa Barbara
Equitable Electrification Outreach
through the Central Coast Community
Action Campaign $ 99,053
Total $ 644,053
*This application and project are a coordinated effort among the Counties of Santa Cruz, San Benito and Monterey, the Cities of Santa Cruz and Watsonville, the Community Foundation of Santa Cruz County, and Ecology Action.
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Medium and Heavy-Duty Electric Vehicle Program (MDHD EV) Member Agency 1:1 Engagements
CCCE staff is engaging in and actively scheduling meetings with Member Agency staff to share information about Member Agency Services and solicit information, feedback, and ideas. As of 6/03/2022 CCCE staff have held one-on-one meetings with thirteen (13) of our Member Agencies.
Member Agency Building and Transportation Electrification Working Groups CCCE has also established and is facilitating working groups focused on building and transportation electrification to drive participation in existing programs and inform future program design; identify common needs, barriers, and scalable solutions for regional electrification; and identify and share resources between Member Agencies and CCCE.
The initial building and transportation electrification working groups each focus on discrete areas of municipal electrification: 1) Reach Codes and 2) Municipal Fleet Electrification. On May 19, 2022, CCCE hosted its third building electrification working group meeting focused on Reach Codes, with 16 attendees from eight Member Agencies. The meeting also included presentations from the City of Watsonville and the County of Monterey, who as part of their Grant Award reporting effort, provided overviews of the building electrification projects.
On June 2, 2022, CCCE hosted its second transportation electrification working group meeting focused on municipal fleet electrification. As part of their Grant Award reporting effort, The City of Santa Cruz, and their contractor PineSpire, presented an in-depth overview of their fleet electrification planning project which leverages LCFS credits to generate revenue and thus reduce cost of EV operations. 170 of 204
CCCE Contracts < $100k Vendor Total Engagement Amount From To Service Scope Remarks 1 Wald Ruhnke & Dost Architects LLP $ 5,000 1/28/2022 Until Completed Feasibility Study of Existing NOAA Building for Proposed CCCE HQ Building 2 Robert Olson $ 26,160 4/1/2022 3/31/2023 SLO Office Amendment No.1 to extend lease to 4 successive 1 year periods 3 Management Partners $ 9,900 3/16/2022 9/31/2022 Facilitator Service for 3/31/2022 Community Advisory Council Ad Hoc Meeting 4 Wald Ruhnke & Dost Architects $ 9,500 5/5/2022 8/15/2022 CCCE Headquarters building selection services 5 S&P Global Rating $ 34,000 5/16/2022 Until Completed Evaluation for CCCE consisting of an analysis of the hypothetical scenario/s 6 NewGen Strategies and Solutions, LLC $ 95,000 4/1/2022 9/30/2022 2022 Rate Group Support 7 Abbott Stringham & Lynch $ 20,500 5/28/2022 8/31/2022 ADM audit service as required by the CPUC 8 Shute Mihaly & Weinberger LLP $ 30,000 1/31/2022 Until Completed Joint CCA Legal Representation in assistance with Prop 209 - 1/5 Shared Cost, $2,125 CCCE total 9 Kelly S. Wachs Law $ 5,810 5/2/2022 Until Completed Retainer Agreement to represent Anamika Singh in the H-1b Application 10 Planeteria Media $ 90,000 3/1/2022 9/30/2022 Web design, development and supporting services 11 Regional Government Services Authority $ 63,000 5/2/2022 9/30/2022 Amendment No.2 to extend compensation study to include the addition of generalist HR consulting and administration services 171 of 204 Staff Report Item 14
TO: CCCE Policy Board of Directors
FROM: Tom Habashi, Chief Executive Officer
SUBJECT: Receive Presentation from Management Partners Inc. Detailing Community Advisory Committee Ad Hoc Subcommittee Agreements and Further Recommendations and Approve Amendments to the Community Advisory Committee Bylaws to Incorporate the Recommendations (Action Item) DATE: June 15, 2022
RECOMMENDATION:
This recommends that the Policy Board of Directors:
1) Receive a Recommendation from Management Partners Inc., detailing the Community Advisory Committee (CAC) Ad Hoc Subcommittee (the Ad Hoc Subcommittee) Agreements and Further Recommendations regarding the CAC’s role and operations; and 2) Approve Amendments to the Community Advisory Committee Bylaws that incorporate and implement the further recommendations.
BACKGROUND:
The CAC is provided for in the Operating Rules and Regulations of Central Coast Community Energy and is one of the many ways that CCCE gathers public input on proposals and policies related to its business.
The CAC acts in an advisory capacity to the Policy and Operations Boards through its engagement with the community in support of CCCE.
At its February 16, 2022, meeting, the Policy Board appointed the Ad Hoc Subcommittee to make recommendations regarding alignment and management of the CAC. The Ad Hoc Subcommittee consists of Vice Chair Williams, Director Adams, Chair Palacios, Vice Chair Goldstein, past-Chair Groot, and Chair Capron.1
1 At its June 1, 2022 meeting, the CAC elected Seth Capron (formerly Vice Chair) to Chair and Katie Davis to Vice Chair.
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CCCE engaged Carol Jacobs and Jaqueline McCray of Management Partners Inc. to facilitate structured meetings and present recommendations of the Ad Hoc Subcommittee.
The Facilitators met with Ad Hoc Subcommittee members individually. The Ad Hoc Subcommittee, along with CEO Tom Habashi and COO Robert M. Shaw, met with the facilitators on March 30 and 31.
The Ad Hoc Subcommittee agreed on a compromised path forward. The facilitators individually followed up with past-Chair Groot and Chair Capron to address additional concerns and further revised their recommendations.
A draft report was provided to the Policy and Operations Board members of the Ad Hoc Subcommittee for additional feedback.
DISCUSSION/ANALYSIS:
The facilitators’ report will be presented by Carol Jacobs of Management Partners.
Staff has reviewed the draft and prepared draft amendments to the CAC Bylaws to incorporate the Ad Hoc Committee’s agreements and Management partners further recommendations.
Ad Hoc Subcommittee Agreements
As reported at page six of the Management Partners report, the following with the agreements reached at the Ad Hoc Subcommittee meetings in March:
1. Develop an annual CAC work agenda in collaboration with CCCE staff that is forwarded to the Policy Board for approval.
2. Proposed CAC agenda items that are not on the annual work plan should be discussed with the CCCE chief executive officer (CEO) or designee and/or the Policy Board chair for approval before they are placed on a CAC agenda.
3. Policy input by the CAC will remain advisory to the Policy and Operations Board, as directed by and at the discretion of the CCCE CEO or designee.
4. The CCCE strategic plan will be presented at the annual meeting to members of the Policy Board, Operations Board and CAC for input, after initial review by the Executive Committee. 173 of 204
Summary of Management Partners Further Recommendations
Management Partners Recommendation 1: Create an annual work agenda to direct the work of CAC members. The work agenda should specify areas requiring a recommendation by the CAC and define a timeframe for outreach by CAC members for energy programs offered by CCCE.
The work agenda should be created by the CAC chair and CCCE staff and should align with the CCCE annual work plan. The jointly prepared annual work agenda should be forwarded to the Policy board for consideration and approval. If there is disagreement between the CAC and CCCE staff about one or more items in the proposed work agenda, staff’s recommendation will be presented to the Policy Board for consideration, noting items not supported by the CAC.
Management Partners Recommendation 2: Allow the CAC chair to request consideration of items outside of the annual Policy and Operations priorities. If approved by the CCCE CEO or designee, the issue would be placed on a future Board agenda. If disapproved by the CEO or designee, the CAC chair could request that the appropriate Board chair place the item/issue on a future agenda.
Management Partners Recommendation 3: Develop and distribute materials and information to support enhanced communication and clarity about the CAC role, functions, and process for input from the public.
Management Partners Recommendation 4: Prepare and forward a list of community generated ideas and suggestions received by the CAC from the public to the Policy Board, Operations Board, and staff at least 90 days prior to the CCCE annual meeting for consideration in priority setting for the upcoming year.
Management Partners Recommendation 5: Assess and report on the informal implementation of Recommendations 1 through 4 at the next CCCE annual meeting.
FISCAL IMPACT:
There is no financial impact related to this report. Implementation of the Ad Hoc Subcommittee’s recommendations will include additional staff time and consultant costs that that are uncertain at this time.
CONCLUSION:
The Ad Hoc Subcommittee dedicated a considerable amount of time and resources toward understanding and addressing the root of earlier identified issues. Approving the proposed CAC Bylaw amendments will incorporate Ad Hoc Subcommittee’s agreements and the further recommendations 174 of 204
and allow staff and CCCE to redirect necessary resources and time toward achieving 100% clean and renewable energy.
ATTACHMENT(S):
1. Management Partners CCCE Results Memo
2. Draft CAC Bylaws
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1730 MADISON ROAD • CINCINNATI, OH 45206 • 513 861 5400 • FAX 513 861 3480 MANAGEMENTPARTNERS.COM 2107 NORTH FIRST STREET, SUITE 470 • SAN JOSE, CALIFORNIA 95131 • 408 437 5400 • FAX 408 453 6191 To: Mr. Tom Habashi, Chief Executive Officer
Mr. Robert Shaw, Chief Operating Officer
Central Coast Community Energy
From: Carol Jacobs, Executive Vice President, and Chief Operating Officer Jacquelyn McCray, Partner
Subject: Memorandum of Results from the Ad Hoc Subcommittee Facilitation Date: June 15, 2022
Introduction and Background
Management Partners was hired to help the leaders of Central Coast Community Energy (CCCE) clarify the role of the Community Advisory Council to both the Policy and Operations Boards as well as its outreach functions with the public (residents and stakeholders) to support current energy programs and initiatives.
CCCE, which was established in 2017 by local communities, is a Community Choice Energy agency. CCCE sources clean and renewable electricity for Monterey, San Benito, and Santa Cruz counties, as well as parts of San Luis Obispo and Santa Barbara counties. The organization serves 440,000 customers across 33 communities along the Central Coast. CCCE promotes long-term electric rate stability and energy security while reducing reliance on fossil fuels and stimulating the economy. CCCE’s vision and mission are below.
Vision
A world free from the need to burn fossil fuels to generate energy.
Mission
We serve our central coast community by providing reliable, affordable, clean electricity, and electrification programs to reduce greenhouse gas emissions and strengthen our local community.
Governance Structure
CCCE is comprised of 43.5 full-time equivalent (FTE) staff. It operates under the leadership of the chief executive officer. CCCE is governed by a Policy Board comprised of elected officials and an Operations Board comprised of county administrators, city managers, city administrators, and public works directors.
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Results from Ad Hoc Subcommittee Facilitation Page 2
The role of the Policy Board is to make all high-level decisions and determine the scope, manner, and means of all governing functions of CCCE primarily through the adoption of an annual budget and setting rates. The role of the Operations Board is to guide the detailed activities and actions required to implement the Policy Board’s high-level decisions.
In addition to the two boards, a Citizen’s Advisory Committee (CAC), comprised of 15 members, serves in an advisory capacity to the boards. The purpose of the CAC is to publicly discuss and provide recommendations about CCCE energy plans and programs, which are presented to the Boards.
CCCE staff work closely with the two boards to develop and carry out policy direction as reflected in the annual budget for the organization, as well as daily operations. Similarly, CCCE staff work closely with the CAC by forwarding proposed policies and programs for review and advisory recommendations to the Boards. The CAC also has a role in facilitating outreach to the public concerning CCCE Community Choice Aggregation Programs and considering issues and concerns from customers, stakeholders, interest groups, community groups and individuals.
The bylaws governing the actions of the CAC define the role, purpose, membership, meetings and agenda, officers, ad hoc subcommittees, and amendments related to its operations. Section
9.01 of the CAC Bylaws states that, any amendment (whether initiated by the CAC or the Board) must be “approved by a majority of the Policy Board of Directors entitled to vote at a meeting at which a quorum is present.”
On February 16, 2022, the CCCE Policy Board created an Ad Hoc Subcommittee to discuss and clarify the role of the CAC. Members of the subcommittee included the vice chair and a member of the Policy Board, the chair and vice chair of the Operations Board, the chair and vice chair of the CAC, and the CCCE chief executive officer and chief operating officer. Management Partners was hired to facilitate a discussion with members of the Ad Hoc Subcommittee to clarify the role of the CAC and relationships between the CAC, staff, and Boards.
Methodology and Process
Management Partners interviewed each member of the Ad Hoc Subcommittee to understand key themes related to operations, communication, and interaction with CCCE staff as well as to hear about issues and concerns pertaining to CAC interactions with the Boards and staff.
Additionally, Management Partners reviewed key governing documents, including the CCCE joint powers agreement, CAC bylaws, operating rules and regulations of the Boards, the CCCE strategic plan and budget. Members of the Ad Hoc Subcommittee met on March 30 and 31 to discuss the following topics:
CCCE successes,
Current CAC role and relationship to the Boards,
Desired role of the CAC, and
Agreements.
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Results from Ad Hoc Subcommittee Facilitation Page 3
The next section summarizes the facilitated discussions and Management Partners’ recommendations. The recommendations resulting from the Ad Hoc Subcommittee process should be forwarded to the Policy Board for consideration and action.
CCCE Overview and Successes
In opening comments, the chief executive officer illustrated through a metaphor his role and purpose in carrying out the direction set by the CCCE Policy and Operations Boards. The role of the chief executive is to “drive the CCCE bus” in the direction set by the Boards. The direction set by the Boards is informed by advice from the Community Advisory Council. The CAC receives input from members of the community, including environmentalists (activists and advocates), employees/individuals behind the meter, labor organizations, customers, and CCCE staff. The chief executive officer stated that the organization can be most successful when all parties are headed in the same direction.
Members of the Ad Hoc Subcommittee agreed that the organization is well led and managed by a skilled and dedicated chief executive officer. They also agreed that the organization has healthy financial reserves, an A-credit rating, offers energy programs that address community needs and concerns, has successfully implemented the first Project Participation Agreement (PPA), has a policy focus of achieving 100% clean energy for customers in the service area, and has accomplished many other successes since it was formed. These successes, combined with CCCE being the first to implement clean energy in the state, make it a leader in the industry.
Current and Desired CAC Role and Relationship to the Boards Using the thematic areas that emerged from the individual interviews, members of the Ad Hoc Subcommittee reviewed and discussed issues related to the CAC and strategic initiatives, relationship with CCCE staff and Boards, roles and process, communication with the public, and agenda setting.
Strategic Initiatives
Issue
The current work of the CAC is not defined in the form of a stated plan. Rather strategic initiatives set by the Policy Board are forwarded to the CAC by CCCE staff as needed for review and advisory recommendations. Similarly, the CAC chair can add items to the meeting agenda at his/her discretion. In the recent past, some items added by the CAC chair to the agenda for revision and recommendation to the Policy Board have not been related to strategic priorities or goals of the CCCE strategic plan. However, the agenda items may have been added in response to a community concern. Without a clearly defined direction from the Policy Board, the CAC chair and members are uncertain and/or unclear about how to determine if requests from the public relate to current programmatic or policy priorities for discussion by the CAC.
Desired Role
Ad Hoc Subcommittee members discussed the following options to achieve greater role clarity and alignment of the CAC in its advisory capacity to the Policy Board. 178 of 204
Results from Ad Hoc Subcommittee Facilitation Page 4
Create an annual work plan that specifies CAC work items that will be advanced by CCCE staff for recommendation.
Establish a communication protocol for the CAC chair, staff and the Policy Board chair, as needed, to address CAC issues (from the community or generated by the CAC) that do not address a current year strategic priority.
Recommendation 1. Create an annual work agenda to direct the work of CAC members. The work agenda should specify areas requiring a recommendation by the CAC and define a timeframe for outreach by CAC members for energy programs offered by CCCE. The work agenda should be created by the CAC chair and CCCE staff and should align with the CCCE annual work plan. The jointly prepared annual work agenda should be forwarded to the Policy board for consideration and approval. If there is disagreement between the CAC and CCCE staff about one or more items in the proposed work agenda, staff’s recommendation will be presented to the Policy Board for consideration, noting items not supported by the CAC.
Relationship with CCCE Staff and Board
Issue
The work of the CAC is directed by CCCE staff in accordance with the strategic direction and budget set by the Policy Board. Although the CCCE staff directs and prepares policy issues for CAC advice and recommendation, recently the CAC has heard, considered, and advanced recommendations for initiatives not related to the Policy Board direction. The CCCE Operating Rules and Regulations clearly state that the Policy Board sets the organization’s agenda, and the CAC has an advisory relationship to the Boards. CAC agenda issues that are unrelated to CCCE policy directives consume staff’s time and agency resources and can distract from the overall ability of staff to implement priority initiatives of the Policy and Operations Boards.
Currently, the Policy Board meeting agenda includes time for the CAC chair to provide a summary report of the most recent meeting. In addition to comments from the CAC chair, it is not uncommon for one or more CAC members to appear before the Policy Board to voice individual comments and concerns that are in opposition to majority view or position of the CAC. At present, no process exists for the CAC chair to advance advisory recommendations for issues that are outside of the Policy Board’s strategic priorities.
Desired Role
The Ad Hoc Subcommittee discussed the need for a process by which the CAC chair could request to advance community issues and concerns to the Policy Board or Operations Board if approved by the chief executive officer or his/her designee, or the chair of the Policy or Operations Board in instances where the CEO does not agree to forward the issue or concern to the Board.
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Results from Ad Hoc Subcommittee Facilitation Page 5
Additionally, an annual joint meeting of members of the CCCE Boards and the CAC was discussed as a means of providing input into the development of annual strategic priorities.
Recommendation 2. Allow the CAC chair to request consideration of items outside of the annual Policy and Operations priorities. If approved by the CCCE CEO or designee, the issue would be placed on a future Board agenda. If disapproved by the CEO or designee, the CAC chair could request that the appropriate Board chair place the item/issue on a future agenda.
Role, Process and Agenda Setting
Issue
The concern of CAC members is that the process for advancing community issues and concerns that are unrelated to the annual policy direction of the organization do not have a forum to be heard by the Policy or Operations Board, as appropriate. During discussion by Ad Hoc Subcommittee members, it was made clear that policy direction originates only from the Policy Board and is advanced to the CAC by CCCE staff in accordance with the organization’s work plan. It was also made clear that the CAC’s role is advisory to the Boards, and as such, their work should be focused on supporting the CCCE direction as specified in the strategic plan and direction set by the Policy Board.
The ability of the CAC chair to advance items to the CAC agenda has become a pressure point for advancing community issues to the agenda that are then forwarded to the Policy Board, even if the issue/concern is unrelated to current policy or CCCE work plans. The CAC bylaws give discretion to the chair or CAC members, by majority vote, to place items on the CAC agenda. While there is flexibility to add agenda items as the CAC sees fit, the current process does not promote or afford equal access and lacks transparency.
Desired Role
Acknowledging that there will always be community issues and concerns that are not aligned with the current strategic direction of the organization, the Ad Hoc Subcommittee members discussed a communications protocol for agenda setting. The protocol would be informal, and the agreed approach used until the CAC bylaws are amended.
The CAC chair and staff would determine if or how community concerns and issues help move the organization forward, as expressed in the CAC work agenda (Recommendation 1) and/or the CCCE strategic plan. The process for handling outside issues, after discussion by the chair and CCCE staff would be decided by the CEO or designee or the appropriate Board chair, as included in Recommendation 2.
Communication with the Public
Issue
There is a perception among some members of the public that the CAC is the entry point for policy-related issues and concerns. There is also a perception by some members of the public 180 of 204
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that the CAC is a decision-making body. Without process clarity about the role of the CAC, it has become increasingly difficult for the CAC chair and members to manage requests by advocates, activists and other members of the public.
Desired Role
There is a need to communicate the role and functions of the CAC, the CCCE energy programs and CAC outreach to the public, using the CCCE website, the strategic plan, and other methods of communication. There is also a need to document and inform the community/public about the process for public input and the need to wisely use limited resources of the organization to advance the CCCE mission and work plan.
Recommendation 3. Develop and distribute materials and information to support enhanced communication and clarity about the CAC role, functions, and process for input from the public.
Ad Hoc Subcommittee Agreements
At the conclusion of the Ad Hoc Subcommittee facilitation there were four agreements that a majority of the members supported. They are:
1. Develop an annual CAC work agenda in collaboration with CCCE staff that is forwarded to the Policy Board for approval.
2. Proposed CAC agenda items that are not on the annual work plan should be discussed with the CCCE chief executive officer (CEO) or designee and/or the Policy Board chair for approval before they are placed on a CAC agenda.
3. Policy input by the CAC will remain advisory to the Policy and Operations Board, as directed by and at the discretion of the CCCE CEO or designee.
4. The CCCE strategic plan will be presented at the annual meeting to members of the Policy Board, Operations Board and CAC for input, after initial review by the Executive Committee.
Post Facilitation Feedback from the CAC
As a follow-up to the facilitated meetings of the Ad Hoc Subcommittee on March 30 and 31 the CAC chair and vice chair composed a letter to the members of Ad Hoc Subcommittee expressing five key concerns they feel were not adequately addressed or resolved during the meetings (see the Attachment). The key concerns from the letter are summarized below:
a. A request to delay amendments to the CAC bylaws until the relationship between the CAC, Boards and staff has improved.
b. Communication about draft policy issues that staff think are appropriate for CAC consideration.
c. Further define a process for regular communication between the CAC and boards. d. A process to engage the CAC and the public in development of the strategic plan. e. A desire to have organization-wide acknowledgement that supports a belief that “good public policy decisions get made when there are a variety of opinions expressed.” 181 of 204
Results from Ad Hoc Subcommittee Facilitation Page 7
Issue
Both the CAC chair and vice chair indicated that an immediate concern is to develop an approach for the CAC and the public to have input into the development of the CCCE strategic plan, which is adopted during the annual meeting. The current process for public input to CAC occurs primarily through email and other written correspondence to the CAC chair or to CAC members, who forward comments and other forms of input to the chair for placement on a CAC agenda for formal consideration. Through this process of public input, many issues, ideas and concerns are received. This information, after being reviewed and amended, as needed by the CAC chair and vice chair could be advanced to the Policy Board and staff and considered during the strategic planning process.
Recommendation 4. Prepare and forward a list of community generated ideas and suggestions received by the CAC from the public to the Policy Board, Operations Board, and staff at least 90 days prior to the CCCE annual meeting for consideration in priority setting for the upcoming year.
While Recommendation 4 addresses the need for greater community/public input in the development of CCCE strategic priorities (Post Facilitation Feedback from the CAC, item d.), it is important to note that items a. through c. and e. are also addressed in the forgoing recommendations. Recommendation 1, an annual work agenda for the CAC, relates to items b. and c. by providing clarity and direction about the priorities that require advisory recommendations and input by the CAC. Recommendation 2, a communications protocol by which the CAC chair can request to discuss and consider items outside of the CAC work agenda and CCCE strategic direction, will enhance the need to address diverse public opinions about community priorities, local issues, current and proposed programs (item e.).
Recommendation 3 provides an approach for engaging the public during development of the strategic plan (as mentioned in item d.).
Future Items for Consideration
There were two items from the facilitated session that were set aside (bike rack issues) for the CCCE staff and Boards and in collaboration with the CAC chair to address at a future date. The items relate to the CCCE governance structure. A review of the governance structure is needed to determine if changes to the Joint Powers Agreement and the Operating Rules and Regulations, which have been in place since the inception of CCCE are appropriate for optimal performance of the staff, Board and CAC members in a rapidly changing environment of renewable electricity. Resolution of the two items may further impact the way the CAC operates.
These are not immediate action items and are best addressed after informally implementing recommendations one through four for at least six months. A progress assessment on the status of implementation should then be prepared by CCCE staff with input from Board members and the CAC, and include a proposed time frame for next steps, including review of the governance structure.
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Recommendation 5. Assess and report on the informal implementation of Recommendations 1 through 4 at the next CCCE annual meeting.
Conclusion
We appreciate the opportunity to assist Central Coast Community Energy with further defining the role of the CAC in its interactions with CCCE Boards and staff. 183 of 204
Community Advisory Council (CAC) Bylaws
Approved by the Policy Board of Directors on June 3, 2020 Central Coast Community Energy
70 Garden Court, Suite 300
Monterey, CA 93940
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Central Coast Community Energy
Community Advisory Council (CAC) Bylaws
Article I. Role of CAC
As prescribed by the Policy Board of Central Coast Community Energy (“CCCE” or the “Authority”), the Community Advisory Council (“CAC”) shall consist of fifteen (15) members appointed from each county with CCCE’s service area (Monterey County, Santa Cruz County, San Benito, San Luis Obispo, and Santa Barbara County) and representing a diversity of customer classes and interests. The CAC’s activities shall include:
(a) Act as a liaison to the community by engaging in community outreach to assist and support CCCE, as well as seeking the views of various groups of customers and potential customers of CCCE regarding CCCE proposals and policies; (b) Provide feedback to CCCE Policy and Operations Boards (the “Boards”) and staff (“Staff”) on proposals and policy recommendationsas set forth by an Annual Work Plan described in 2.03(b); and,
(c) Assist with legislative advocacy in furtherance of CCCE’s key goals.
The CAC shall act in an advisory capacity to the Policy Board and Operations Board of CCCE (collectively, the “Boards”), and the Policy Board of CCCE shall at all times be the final decision-making body on all matters related to CCCE as defined in the JPA and the CCCE Operating Rules and Regulations.
Article II. Purpose, Functions and Reporting Requirements Section 2.01 Purpose. The CAC shall publicly discuss and provide in-depth review of recommendations and discussion items provided by CCCE staff, included on the Annual Work Plan, or directed by the Policy Board Chair or the CAC to be presented to the CCCE Boards regarding the implementation, development and prioritization of CCCE’s energy plans and programs to support the Authority’s Key Goals, summarized as follows; (i) To source electric supplies that will reduce, if not eliminate, greenhouse gas emissions in the electric utility sector and to adopt programs that would minimize GHG emissions in the transportation, industrial and home building sectors;
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(ii) To provide electric power and other forms of energy to customers at affordable rates;
(iii) To carry out programs that would reduce energy consumption resulting from burning fossil fuels.
(iv) To stimulate and sustain the local economy by lowering electric rates and creating local jobs;
(v) To promote long-term electric rate stability and energy security and reliability for residents through local control of electric generation resources; and
(vi) To accelerate the State’s transition to clean power resources by focusing short and long-term acquisition of electricity generation on renewable resources.
Section 2.02 Involvement. The CAC is formed to ensure that all parties, including private citizens, organizations, government agencies and industry, have a local community group to provide feedback on CCCE staff proposals and policy recommendations to the Boards. The CAC endeavors to conduct its business openly, fairly, quickly and effectively.
Section 2.03 Reporting Requirements.
(a) The CAC shall take minutes of its meetings and submit copies of approved minutes to the Policy and Operations Boards.
(b) The CAC shall be required to provide input on items placed on CAC meeting agendas by CCCE staff, the Annual Work Plan, and as directed by the Policy Board Chair.
The Annual Work Plan shall be drafted by CCCE staff with consultation from the CAC Chair. The Annual Work Plan shall be in alignment with the CCCE annual operations plan as identified in the Operating Budget and approved by the Policy Board.certain matters, as follows:
(i) Upon the request of CCCE’s CEO;
(ii) As directed by the Boards; and
(iii) On items placed on CAC meeting agendas by the CAC Chair, in cooperation with Staff; subject to the requirements that, 1) Any agenda items placed on the Agenda shall address issues related to the CAC’s role in Article I above;
2) At its discretion, the Chair shall place matters on the agenda for discussion or action as suggested by CAC members; and
3) If the Chair declines to place an item on the agenda as suggested by a CAC member, then the Chair shall put the question to the full CAC on a forthcoming agenda. At that future meeting, the CAC shall vote on whether to place an item on the agenda and such item will be put on a 186 of 204
future agenda if approved by a majority of the votes present. 187 of 204
(c) In its review, the CAC should, to the extent feasible, consider factors related to the general welfare of the citizens within the CCCE service area. These factors include, but are not limited to, the environmental, health, social, economic, political, legislative, legal and employment effects of an issue on the entire Central Coast community. Oversight should advance efforts to meet the of CCCE. (d) A representative of the CAC (the “CAC Liaison”) shall attend all Board meetings to provide a summary of the CAC’s most recent actions and discussions, as well as to act as a liaison to the CAC. The CAC’s reports may be supplemented in any or all of the following ways:
(i) attachment of the minutes of a CAC meeting;
(ii) a letter from the CAC Chair; or
(iii) a presentation from the CAC liaison.
The form and content of supplemental transmittal information shall be determined by the CAC, subject to the approval of the Boards.
(e) Individual CAC members may express an opinion on any recommendation, either supporting or dissenting, by either expressing a personal opinion directly to the Boards during public comment or requesting his/her opinion be placed on the record in the meeting minutes and transmitted to the Boards. Such CAC member is responsible for providing the statement to the Board Clerk. (f) All CAC members will be expected to support the mission and Key Goals of CCCE, and to align their views and actions with the long-term success of the Authority.
CAC members will focus on what is best for the customers, member jurisdictions and employees of CCCE. CAC members are encouraged to ask questions and openly debate relevant issues and be respectful of other opinions and tolerant of other viewpoints.
Article III. Membership
Section 3.01 Member Appointments, Composition and Terms. (a) The number of members and composition of the CAC is established by the Policy Board and set forth in Section 2 of the CCCE Operating Rules and Procedures (CCCE Operating Rules). The CAC shall be comprised of fifteen (15) members. (b) If the initial term of a CAC member is less than three years, as set forth in Section 2 of the CCCE Operating Rules, then such CAC member may serve two full 3 year terms following his or her initial term.
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(c) CAC members require no special technical background. Since technical knowledge from some members is essential during CAC deliberations, and non-technical members can become expert with increasing experience, a certain level of continuity in membership is encouraged. Although not required, a good mix of new and seasoned members provides for optimum CAC operation. (d) The Board Clerk shall notify the CAC of new and renewed member appointments by the Policy Board.
Section 3.02 CAC Liaison. The CAC Chair, or his or her designee, will be the CAC Liaison to the Boards to deliver the CAC’s report on the CAC’s activities and to respond to questions from the Boards. That said, nothing in these Bylaws prevents any other CAC member from also attending the Board meetings to provide his or her independent views on any matter, including matters considered at meetings of the CAC.
Section 3.03 No Conflicts of Interest.
(a) CAC members represent their communities, professions, and industries, and are appointed with the specific purpose of providing input from these sectors, in both discussion and voting. This is not a conflict of interest. (b) No CAC member should vote on a question in which he or she has a personal or pecuniary interest not common to other members of the community. The CCCE General Counsel has developed the following guidelines for CAC members whose financial interest could potentially create a conflict of interest:
• Publicly (orally) identify the financial interest that gives rise to the conflict of interest, or potential conflict-of-interest, in detail sufficient to be understood by the public. This public identification must be made part of the official public record (i.e. the meeting minutes).
• State each type of economic interest held (i.e. investment, business position, interest in real property, personal financial effect, or the receipt or promise of income or gifts) which is involved in the decision and gives rise to the conflict of interest.
• Recuse yourself from discussing and voting on the matter after public identification of the conflict-of-interest has been provided. You shall not be counted toward achieving a quorum while the item is discussed. • Leave the room before the discussion of the item until after the discussion, vote, and any other disposition of the matter is concluded. 189 of 204