Central Coast Community Energy (3CE) Policy Board
February 15, 2023

Policy Board of Directors
Wednesday, February 15, 2023
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 2/10/2023
. Welcome & Roll Call
. Corrections and Additions
The Board Clerk will announce agenda corrections and proposed additions of emergency, urgency, or continued items, which will be acted on by the Board as provided in Sections 54954.2 of the California Government Code.
. Public Comment on the Consent Agenda and Matters Not Listed on the Agenda The public may provide comments on the Consent Agenda or 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 it for a future meeting. Speakers are limited to 3 minutes each.

CONSENT AGENDA

1. Approve Minutes from the December 20, 2022 Meeting of the Policy Board (Action Item)

2. 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)

3. Community Advisory Council Report (Information Only)

4. Operations Board Report (Information Only)

5. CEO Report (Information Only)
a) Customer Enrollment and Engagement Report
b) Update On FY 22-23 Community Energy Programs
c) Update On FY 22-23 Member Agency Services
d) 3CE Contracts < $100k

6. Regulatory and Legislative Quarterly Update (Information Only)

7. Treasurer's Report (Information Only)

REGULAR AGENDA

8. 2021-2022 Annual Report Presentation

9. Adopt a Ceremonial Resolution Commending Tom Habashi (Action Item)

10. Workshop: 2023 Regulatory and Legislative Outlook (Discussion Item) Board Member Reports & Comments (Information Only)
Adjournment

Special Meeting of the Policy Board of Directors
Tuesday, December 20, 2022
1:30 PM
Central Coast Community Energy
70 Garden Court, Suite 300
Monterey, CA 93940

MINUTES
The meeting was called to order at 1:30pm with 2 members attending in person 10 members attending via teleconference pursuant to AB 361 and a quorum established.

Directors present in person: McPherson, Chair McShane
Directors present via teleconference: Adams, Brooks, Carbone, Kosmicki, Marx, Morales, Nomura, Cordero, Waage, Vice Chair Williams
Directors Absent: Baron, Brunner, Martin (arrived at 1:37pm), Orona, Quiroz-Carter, Velazquez The Chair opened the public comment period on items not listed on the agenda.

No public comments were received.

The Chair closed public comment period.

Clerk announced that there were no changes or additions to the agenda.

CONSENT AGENDA
The Chair opened the public comment period.

No public comments were received.

The Chair closed public comment period.

MOTION: Moved by Director Adams, Seconded by Director Morales to approve the Consent Agenda.

ACTION: The Motion Carried with a roll call vote: 11/0/7 AYES: Adams, Carbone, Kosmicki, Marx, McPherson, Morales, Nomura, Cordero, Waage, Vice Chair Williams, Chair McShane
NOES: None
ABSENT: Baron, Brooks (left at 1:35pm), Brunner, Martin, Orona, Quiroz-Carter, Velazquez

1. Approved Minutes from the December 20, 2022 Special Meeting of the Policy Board as submitted.

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 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

CLOSED SESSION
The Chair opened the public comment period.

No public comments were received.

The Chair closed public comment period.

Recessed into closed session at 1:37pm

3. CONFERENCE WITH LABOR NEGOTIATORS
(Gov. Code § 54957.6)
Agency designated representatives: Derek Johnson, Mona Miyasato, or Carlos Palacios Unrepresented employee: CEO Robert M. Shaw

REGULAR AGENDA
Reconvened into Open session at 2:02pm
Clerk reconfirmed the quorum.

General Counsel had no action to report.

4. Authorized Execution of the Employment Agreement Between Central Coast Community Energy and Robert M. Shaw for Service as Chief Executive Officer The Chair opened the public comment period.

No public comments were received.

The Chair closed public comment period.

MOTION: Moved by Director Waage, Seconded by Director Adams to approve the employment agreement between Central Coast Community Energy and Robert M. Shaw for service as Chief Executive Officer.

ACTION: The Motion Carried with a roll call vote: 12/1/5 AYES: Adams, Brooks, Carbone, Martin, Marx, McPherson, Morales, Nomura, Cordero, Waage, Vice Chair Williams, Chair McShane
NOES: Kosmicki
ABSENT: Baron, Brunner, Orona, Quiroz-Carter, Velazquez Adjourned at 2:09pm
Staff Report Item 2
TO: 3CE 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: February 15, 2023
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 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, so the Board were able to meet remotely the first time after September 30, 2021. 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.

Staff Report Item 3
TO: 3CE Policy Board of Directors
FROM: Tom Habashi, Chief Executive Officer
SUBJECT: Community Advisory Council Report (Information Only) DATE: February 15, 2023

COO REPORT (DISCUSSION ITEM)
COO Shaw provided updates on:
 Staffing Updates
 Power Supply Updates
o Kudo’s for forward-looking contract for Willow Rock Energy Storage Center o Longer-term compressed air storage puts CCCE on the cutting edge  Investor-Owned Utility 2023 Electric Generation Rates o Significant increases in wholesale electric rates are pushing IOU rates significantly higher o CCCE rates now 20%-40% under IOU PG&E rates
o Concerns expressed by CAC about CCCE rates not reflecting our increased wholesale costs.
 Integrated Resource Planning Procurement Mandates
 Customer Support
o Update on LIHEAP and CAPP programs to support lower-income CCCE customers  Future In-Person Meetings
o Discussed return to pre-Covid Brown Act meeting requirements o Staff plans to provide two remote meeting locations for CAC members and the public, as well as continuing to allow the public to participate over Zoom

REGIONAL TRANSPORTATION ELECTRIFICATION ACTION PLAN PRESENTATION AND PANEL DISCUSSION: INVESTOR-OWNED UTILITIES (DISCUSSION ITEM)
Staff provided presentations from Southern California Edison and PG&E  SCE described programs for subsidized front-of-the-meter infrastructure upgrades to serve EV charging
 PG&E is looking to large adoption of DERs to contribute to meeting future demand  Both IOUs are mostly focused on responding to request for service, instead of proactively projecting the locations for future increased demand  Increased loads can require long lead times in order for IOU to provide power o New Substation – 5-8 years
o New Transmission Interconnection – 3-5 years
o Added Substation Capacity – 3-4 years
o New Circuit – 2-3 years
o Circuit Line Work – 2-3 years
Long lead times for infrastructure upgrades are a major obstacle to meeting CCCE’s transportation electrification goals. If IOU’s continue to expand grid capacity by responding to new project requests, instead of projecting needs and building proactively, the Central Coast will not be successful at meeting our electrification goals.

RECEIVE UPDATE ON REGIONAL TRANSPORTATION ELECTRIFICATION ACTION PLAN (DISCUSSION ITEM)
Staff reviewed the overall steps being taken to create Regional Transportation Electrification Plan (RTEAP)
 Goal is to determine how and where CCCE should direct future transportation electrification program investments.
 CAC Work Study Sessions
 Member Agency Working Group meetings
 Medium-Duty/Heavy-Duty Zero Emission Vehicle Blueprint – led by CCCE and consultant – Build Momentum
 Central Coast Zero Emission Vehicle Strategy – led by Santa Barbara County Association of Governments
 Evaluation of FY 21-22 and current CCCE transportation electrification programs A comprehensive CCCE Transportation Electrification Plan will guide the deployment of CCCE resources.

CCCE will also need to work proactively with IOUs to make sure that front of the meter infrastructure is being upgraded on a schedule to provide for planned future EV charging capacity.

RECEIVE UPDATE ON FY22/23 ENERGY PROGRAMS PORTFOLIO (DISCUSSION ITEM) Staff provided a detailed update on the implementation of the FY 22-23 Community and Member Agency Energy Programs
 FY 22-23 CCCE Community Energy Programs
o Electrify Your Home Program
 Incentives for hot water and HVAC heat pump technology  Midstream incentives to enrolled contractors
 Supported by a consultant - Energy Solutions
 $285,300 allocated to date with an annual budget of $1.6 Million o New Construction Electrification Program
 In addition to low-income housing, program now supports farmworker housing, ADUs, and flood victims
 Incentives are for all-electric homes (no natural gas or propane)  $165,000 allocated to date with an annual budget of $1.5 Million o Electrify Your Ride Program
 Now accepting 1040 tax forms
 New no-cost technical assistance for multi-family housing and publicly accessible commercial EV charger installations
 Improved communication with applicants
 Plans to contract third-party implementer
 Plans for workforce development incentives for EVSE installation  $476,000 allocated to date with an annual budget of $4.6 Million o Ag Electrification Program
 Frontier Energy to provide new no-cost technical assistance to ag customers  $132,000 allocated to date with an annual budget of $2 Million o Upcoming Electric Bus Program launches Feb/March 2023  New iteration will include transit and ag employee buses as well as school buses  FY 22-23 CCCE Member Agency Programs
o Reach Code Program
 Support by consultant, TRC Engineers
 Comprehensive support for Reach Code development and adoption  Three agencies have used program
o Electrify Your Fleet Program
 Incentives for light-duty, medium-duty and heavy-duty EV’s o Charge Your Fleet Program
 Incentives for electrical vehicle charging infrastructure  Public-facing or dedicated to fleet charging only
o Member Agency Building and Transportation Electrification Working Groups  Working groups to encourage agency participation in incentive programs  Separate groups focused on Building Electrification and Transportation Electrification
o Upcoming programs to launch this spring
 Plan Your Fleet
 No-cost technical assistance (planning, design, and engineering) provided by third-party consultant (TBD)
 Facilitate member agency participation in fleet electrification  Broadband Access Initiative
 Funds for planning and interagency collaboration
 CAC Broadband Ad Hoc committee is assisting staff with program design Staff Report Item 4
TO: 3CE Policy Board of Directors
FROM: Carlos Palacios, Operations Board Chair
SUBJECT: Operations Board of Director's Report (Information Only) DATE: February 15, 2023
November 9, 2022 Regular Meeting of the Operations Board The following actions were taken by the Board:

Ratified CEO's Execution of Addendum No. 1 to the Lease for Expanded Premises at 70 Garden Court, Monterey, California between Central Coast Community Energy (successor in-interest to Monterey Bay Community Power) and AG Davi Ltd., Agent for Owner, 70 Garden Court Monterey LLC.

Received a Market and Transaction Update on a Prepay Financing Transaction and Directed Staff to Return with Specific Parameters.

December 14, 2022 Special Meeting of the Operations Board The following action was taken by the Board:

Authorized the CEO to Execute an Energy Storage Agreement with Gem A-CAES LLC, and any necessary ancillary documents, with a Term of 25 Years in an Amount Not to Exceed $775,000,000.

January 11, 2023 Regular Meeting of the Operations Board The following actions were taken by the Board:

Authorized the CEO to Execute Amendment No. 1 to Agreement with Frontier Energy to Add $150,000 for Additional Energy Program Services for a Total Not to Exceed Amount of $389,378.00 (Directed the Chief Executive Officer to Execute the Project Participation.

Authorized the CEO to Amend the Legal Services Agreement with Meyers Nave for Energy Product Litigation and/or Transaction Legal Services to Add $780,000 for a Not to Exceed Contract Amount of $1,380,000.

Appointed Derek Johnson as Chair and reappointed Jamie Goldstein as Vice Chair of the Operations Board for 2023.

The next regular meeting of the Operations Board of Directors is scheduled for March 8, 2023.

Staff Report Item 5
TO: 3CE Policy Board of Directors
FROM: Tom Habashi, Chief Executive Officer
SUBJECT: CEO Report (Information Only)
DATE: February 15, 2023

STAFFING UPDATE
Luke Mead- Communications Specialist- Luke brings over fifteen years of experience as a seasoned editor, developing and designing content for marketing. Luke also has a track record of demonstrated heavy marketing skills and building strong rapport with vendors including print, radio, and television outlets. Luke will report to the Manager of Communications.

ATTACHMENT(S):

1. Customer Enrollment and Engagement Report

2. Update On FY 22-23 Community Energy Programs

3. Update On FY 22-23 Member Agency Services

4. 3CE Contracts < $100k
Customer Enrollment and Engagement Report
Communications and Outreach
February 2023
I. Enrollment/Opt-Outs:

Total Opt-Out request for December 2022: 17
The reasons given by customers for opting out were as follows:

Rate of cost concerns 3
Decline to provide 3
Other 7
Dislikes being automatically enrolled 4

90.18%

97.12%

88.12%

93.83%

96.28%

98.12%

94.89%

96.30%

96.70%

92.43%

96.20%

90.98%

90.51%

89.38%

95.78%

92.61%

96.37%

96.81%

92.57%

95.43%

93.40%

88.55%

97.98%

96.70%

87.50%

86.91%

95.84%

95.85%

94.68%

98.00%

95.37%

97.37%

95.38%

WATSONVILLE INC

SOLVANG INC

SOLEDAD INC

SEASIDE INC

SCOTTS VALLEY

SANTA MARIA

SANTA CRUZ CO

SANTA CRUZ

SANTA BARBARA CO

SAND CITY

SAN LUIS OBISPO

SAN JUAN BAUTISTA

SAN BENITO CO

SALINAS

PISMO BEACH

PASO ROBLES

PACIFIC GROVE

MORRO BAY

MONTEREY CO

MONTEREY
MARINA

HOLLISTER

GUADALUPE

GROVER BEACH

GREENFIELD

GONZALES
GOLETA

DEL REY OAKS

CARPINTERIA
CARMEL

CAPITOLA

BUELLTON

ARROYO GRANDE

82.00% 84.00% 86.00% 88.00% 90.00% 92.00% 94.00% 96.00% 98.00% 100.00% Percentage of Eligible Enrollment as of January 1, 2023

III. Media Outreach
February 2023
Facebook
Followers: 1,887
Post Reach: 2.4K
Post engagement: 582
(34.7% increase from last month)
New page followers: 8
Link Clicks: 39
Top Performing Content: Ag Electrification – McKenzie
Family Farms
Facebook En Espanol
Followers: 182
Post Reach: 17
Post engagement: 1
New page followers: 0
Link Clicks: 0
Top Performing Content: Willow Rock Energy Storage
Center
Instagram
Followers: 880
Reach: 5,665
Top Performing Content: Ag Electrification – Super Bee
Rescue customer testimonial
New Followers: 26
LinkedIn
Followers: 1,627
Top Performing Content: Ag Electrification – Super Bee
Rescue customer testimonial
Earned media:

Willow Rock Energy Storage Center
Twitter
Followers: 1,093
Top Performing Content: Willow Rock Energy Storage
Center
 Santa Barbara County to Get New Green Energy Technology - The Santa Barbara Independent  Long-duration storage projects are taking shape | BusinessGreen News  Hydrostor, California community choice aggregator enter nearly $1B long-duration energy storage PPA | Utility Dive
 California aggregator to buy capacity from compressed air storage project – pv magazine International (pv-magazine.com)  Energy Storage Is Going Underground - CleanTechnica
 Calif. Community Choice Aggregator Signs PPA Tied to Compressed Air Energy Storage Project | American Public Power Association
 Calif. Community Choice Aggregator Signs PPA Tied to Compressed Air Energy Storage Project | American Public Power Association
 First offtake deal signed for 500MW/4,000MWh advanced compressed air energy storage project in California - Energy Storage News (energy-storage.news)
 Renewable Energy Finance: Leeward Renewable closes $400mn debt + tax equity financing for 174 MW solar-plus-storage project in the US | Energy Central SLO County Board of Supervisors Meeting
 SLO County supervisors change priorities, policy directions | News | San Luis Obispo | New Times San Luis Obispo (newtimesslo.com)
 From redistricting to water policy, new SLO County Supervisor Jimmy Paulding shares his priorities | News | San Luis Obispo | New Times San Luis Obispo (newtimesslo.com) FY 22-23 3CE Community Energy Programs
Provided in this report is an update on FY 22-23 Community Energy Programs implementation activities.

Electrify Your Home Program
On October 3, 2022, 3CE staff launched the Electrify Your Home Program (EYH) with implementation support from a consultant, Energy Solutions. This residential electrification program provides incentives “midstream” to enrolled contractors who recommend and switch out gas-powered appliances in existing single and multi-family buildings with all-electric heat pump water heating and HVAC technologies. These incentives directly reduce the upfront cost for 3CE customers who make the switch to all-electric heat pump technology. In FY 22/23, 3CE budgeted $1.6 million for EYH.

Contractors enrolled in the statewide TECH Clean California (TECH) program also have access to no-cost workforce education and training focused on electrification design and specification, heat pump installation, building science, and soft skills in sales and marketing. As of January 20, 2023, there are 75 licensed contractors enrolled in the TECH program that serve part of 3CE’s service area.

The following table summarizes program performance as of January 20, 2023.

Approved & Paid Submitted Reserved Total Allocated
Single-Family $102,400 $74,900 $63,000 $240,300
Multifamily $0 $0 $45,000 $45,000
Low-Income $0 $0 $4,200 $4,200
Total $102,400 $74,900 $108,000 $285,300
Table 1: Electrify Your Home Program funds distribution by housing type New Construction Electrification Program
On October 3, 2022, 3CE staff launched the New Construction Electrification Program (NCEP). This year’s iteration of NCEP provides affordable and farmworker housing developers, and homeowners building Accessory Dwelling Units (ADU), with incentives to build all-electric housing. Housing 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. Incentives will be provided on a per-unit basis and will be provided “downstream” to developers and homeowners upon successful completion of the project. In FY 22/23, 3CE has budgeted $1.5 million for NCEP.

As of January 20, 2022, staff have received and approved three (3) multi-unit projects totaling $150,000 in funding reservations for a total of 70 affordable housing units. 3CE has also received and approved three (6) applications for ADU projects, reserving a total of $30,000. See Figure 1 below for the total program funds reserved by county in FY 22/23. For a full list of all NCEP funds reserved since FY 19/20, please see Appendix A, attached to this document.

Figure 1 (above): Shows NCEP funds distributed by County in FY 22/23.

Electrify Your Ride Program
On November 1, 2022, 3CE staff launched the third iteration of the Electrify Your Ride (EYR) Program.

Building off last year’s program, the Electrify Your Ride Program provides rebates to 3CE 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”. This year’s EYR program improved upon previous years’ programs with several design and implementation modifications that are being phased in and include the following new services and implementation changes:

Phase 1:
 Accept 1040 tax forms for income-qualified verification; eliminate all other forms of and processes for income qualification other than CARE/FERA.  Provide DCFC rebates for publicly accessible commercial customer sites.  Launch no-cost technical assistance “concierge” service for multifamily property owners and publicly accessible commercial customers.
 Improve and add new automated customer notification emails.

Phase 2:
 Procure and contract third-party program implementation services.  Integrate workforce development incentives to train or certify local contracts to install EVSE throughout 3CE service area.

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, 3CE budgeted a total of $4.63 million with $2 million allocated for EV, Level 2 EV charger, and EV Readiness incentives, as well as $2 million for Level 3/DC Fast Charger incentives.

The following figures summarize program performance based on 368 applications received as of January 19, 2023.

Figure 2 (above): Shows Electrify Your Ride funds distributed by County in FY 22/23.

Figure 3 (above): Shows Electrify Your Ride Program funds distributed by Measure type in FY 22/23.

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 estimated annual GHG emissions reductions (MTCO2e) by County resulting from reduced vehicle emissions under the Electrify Your Ride Program in FY 22/23.

Ag Electrification Program
On December 8, 2022, staff launched the fourth iteration of the Agricultural (Ag) Electrification Program.

The Ag program provides incentives to 3CE customers for replacement of fossil fuel-powered agricultural equipment with new electric equipment including irrigation pumps, farm tools, tractors, utility vehicles, and other equipment. Incentives are provided “downstream” directly to the customer after proof of purchase and/or installation of equipment.

For FY 22/23 a total of $750,000 is available for agriculture equipment incentives. Like last year, applications for projects with the greatest estimated GHG emissions reduction as well as those submitted by small to medium-sized businesses will be supported by the highest incentive levels.

Starting in mid-January, and conditional upon Operations Board approval of the Frontier Energy agreement amendment, the Ag program will offer a no-cost technical assistance “concierge” service and administer additional incentives for Level 3 or Direct Current Fast Charging (DCFC) infrastructure at eligible customer sites, totaling $1,250,000. The following figures summarize program performance in FY 22/23.

Figure 6 (above): Shows total funds reserved or distributed by County for the FY 22/23 AG Electrification program Figure 7 (above): Shows Ag Electrification Program funds reserved or distributed by equipment type in FY 22/23.

FY 22/23 Community Energy Programs Launch Schedule
Community Energy Programs Proposed Launch
Electric Bus Program Q2
FY 22/23 Programs To-be-Launched
Electric Bus Program
The Electric Bus Program will launch on March 1, 2023. This Program will provide incentives to public schools, school districts, transportation agencies, and businesses that offer farmworker transport services to help offset the cost of the purchase of an all-electric bus.

Appendix A – NCEP Approved Housing Developments, by City Installation City Development Name
Estimated Project
Completion Date
Total
Reserved
Funds
Total # of
Housing
Units
(Final) Status
Buellton Village Senior Apartments August 2024 $122,500 49 Funds Reserved Goleta Heritage Ridge December 2022 $102,500 41 Funds Reserved Goleta Hollister Lofts December 2023 $90,000 36 Funds Reserved Guadalupe Escalante Meadows June 2023 $200,000 80 Funds Reserved Hollister Riverview Estates II Completed- 2022 $60,000 24 Project Complete Hollister Santana Ranch Apartments March 2023 $139,250 56 Funds Reserved Hollister Phase 1 of Santana Ranch Apartments March 2023 $37,500 16 Funds Reserved Hollister The Apartments at Santana Ranch, Phase 2 December 2023 $137,500 55 Funds Reserved Lompoc (Unincorporated
Santa Barbara County) Brisa Encina TBD $122,500 49 Funds Reserved New Cuyama Perkins Place TBD $82,500 33 Funds Reserved
Pismo Beach Shell Beach Senior Apartments May 2024 $62,500 25 Funds Reserved Pismo Beach Pismo Terrace July 2023 $125,000 50 Funds Reserved Salinas 467, 479 E. Market Street January 2025 $156,750 84 Funds Reserved San Luis Obispo
Presidio WH SLR 80 Towns, LLC (Williams
Homes) Fig at the Orchard- Tract 3150 February 2022 $141,500 80 Funds Reserved San Luis Obispo
Presidio WH SLR 120 Lofts Efficiency Units at
the Orchard -Tract 3150 TBD $214,500 120 Funds Reserved San Luis Obispo Tiburon Place TBD $170,000 68 Funds Reserved San Luis Obispo Broad Street TBD $100,000 40 Funds Reserved San Luis Obispo Vinifera Completed- 2022 $76,000 40 Project Complete San Luis Obispo Iron & Oak Completed- 2022 $29,750 17 Project Complete San Luis Obispo Harvest Lofts March 2023 $213,500 122 Funds Reserved San Luis Obispo Harvest Vistas June 2023 $26,250 15 Funds Reserved San Luis Obispo Avila Ranch TBD $35,000 14 Funds Reserved Santa Cruz 180 Permanent Supportive Housing Project July 2023 $240,000 121 Funds Reserved Santa Cruz Pacific Station North April 2025 $237,500 95 Funds Reserved Santa Cruz Jessie Street Apartments TBD $123,500 50 Funds Reserved Santa Cruz 1500 Capitola Road Family Housing June 2023 $142,500 57 Funds Reserved Santa Cruz Downtown Library Apartments March 2025 $240,000 105 Funds Reserved Santa Cruz Calypso September 2024 $87,500 35 Funds Reserved Santa Cruz, CA Natural Bridges Apartments January 2025 $50,000 20 Funds Reserved Santa Ynez Harry's House May 2023 $150,000 60 Funds Reserved Seaside Lower Stilwell Privatized Military Housing TBD $240,000 96 Funds Reserved Soledad San Vicente Rentals Completed - 2021 $20,000 8 Project Complete Unincorporated Monterey
County East Garrison Apartments TBD $165,000 66 Funds Reserved Watsonville Miles Lane Family Housing December 2023 $180,000 72 Funds Reserved Watsonville Pippin Phase II Apartments July 2024 $200,000 80 Funds Reserved Watsonville 1482 Freedom Blvd November 2023 $131,750 53 Funds Reserved FY 22-23 Member Agency Services
Provided in this report is an update on FY 22-23 Member Agency Services implementation activities.

Reach Code Program
On October 3, 2022, 3CE staff launched the Reach Code Program with program implementation support from a consultant, TRC Engineers. This redesigned program offers stakeholder outreach support and provides no-cost technical assistance to help Member Agencies adopt and implement reach codes.

Support includes presenting to key stakeholders, answering technical questions, attending meetings, developing customized ordinances, reviewing staff presentations and reports, and developing implementation tools to help Member Agencies enforce their reach codes. The Reach Code Program includes recommended model codes for new construction electrification, electric vehicle charging infrastructure, and existing building electrification.

Since launch, three Member Agencies have engaged in the program: the City of Watsonville, the City of San Luis Obispo, and the County of Monterey. 3CE is also supporting a regional reach code working group effort including the County of Santa Barbara and the Cities of Carpinteria and Goleta and being led by 3C-REN with support from Southern California Edison.

The following table summarizes program performance based on the three (3) Reach Code Program engagements as of February 6, 2022.

Member Agency Type of Reach Code (NC, EB, EV)
County of Monterey New Construction and Electric Vehicle City of Watsonville New Construction and Electric Vehicle City of San Luis Obispo Existing Buildings
Electrify Your Fleet Program
On December 15, 2022, 3CE staff launched the Electrify Your Fleet (EYF) program. EYF provides incentives to Member Agencies to offset the cost of the purchase/lease of light-duty, medium-duty, and heavy-duty battery electric vehicles. These incentives are available as a post-purchase rebate or as a pre-purchase reservation.

Charge Your Fleet Program
On December 15, 2022, 3CE staff launched the Charge Your Fleet (CYF) program. CYF is the complement to EYF and provides incentives to Member Agencies to offset the cost of the purchase and construction/installation of electric vehicle charging infrastructure. Charging stations may be either public-facing or “behind the fence” and include Level 2 and/or Level 3 chargers. These incentives are available as a post-purchase rebate or as a pre-purchase reservation.

Member Agency Building and Transportation Electrification Working Groups 3CE has 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 3CE.

The Building Electrification Working Group (BEWG) most recently met on October 27, 2022. Energy Programs staff presented an overview of FY 22-23 building electrification programs including the Reach Code, Electrify Your Home, and New Construction Electrification Programs. Staff from the City of Watsonville and County of Monterey provided updates on their 3CE grant-funded building electrification projects. The BEWG will meet quarterly in 2023.

The Transportation Electrification Working Group (TEWG) met on December 1, 2022. 3CE staff presented on the suite of 3CE transportation electrification programs planned for FY 22-23. The TEWG will meet quarterly in 2023.

BEWG TEWG
None February 23
April 27 May 18
July 27 August 24
October 26 November 16
FY 22/23 Member Agency Services and Initiatives Launch Schedule Member Agency Services and Initiatives Proposed Launch
Plan Your Fleet Program FY Q2
Broadband Access Initiatives FY Q2
FY 22/23 Programs To-be-Launched
Plan Your Fleet Program
The Plan Your Fleet Program (PYF) will provide no-cost technical assistance to help Member Agencies electrify their fleets. PYF will be supported by a third-party planning, design, and engineering consultant. The consultant (TBD) will deliver a broad scope of services to 3CE Member Agencies to accelerate fleet electrification and development of Member Agency electric vehicle charging infrastructure across the 3CE service area.

Broadband Access Initiative
3CE’s Broadband Initiative will collaborate with Member Agencies and regional economic agencies to support greater broadband access and deployment. 3CE will design and administer a program that will provide funding to Member Agencies for the purpose of studying, planning, or implementing broadband initiatives that will increase broadband access in 3CE’s service area, particularly in rural, underserved, and geographically isolated regions. Funding will be distributed geographically to reach a minimum of two counties and/or regions of 3CE’s service area.

An Ad Hoc Committee (Broadband AHC) has been formed including Community Advisory Council members Heather Allen and Wayne Norton to provide recommendations to staff informing program design and help evaluate program applications. Staff and Broadband AHC members held a kick-off meeting on December 21, 2022. Staff and the AHC met on January 12, 2023, and reviewed a staff regional broadband summary.

On Monday, February 1st, staff met with the two regional broadband coordination groups covering the 3CE service territory: Broadband Consortium of the Pacific Coast and the Central Coast Broadband Consortium. These discussions, combined with staff research, create the basis for next steps. The Ad Hoc Committee will meet with Staff on February 9th to review a draft Program Design and Implementation Guide created by staff.

CCCE Contracts < $100k
Vendor Total Engagement Amount From To Service Scope Remarks 1 SoftResources LLP $ 81,000 11/3/2022 5/15/2023 ERP consulting service to assist in managing core business processes and optimize performance 2 eScribe Software $ 21,000 9/27/2022 9/26/2023 Agenda management software and support service for a one-year term 3 Keyes and Fox LLP $ 93,000 9/27/2022 As needed Joint representation in matter related to A.22-04-001 and 2023 ERRA Forecast - CCCE to pay 1/3 4 Double Diamond Consulting LLC $ 90,000 1/17/2023 9/30/2023 Assistant to Power Service with planning and scheduling support services 5 TransPerfect International, LLC $ 35,000 9/23/2022 9/22/2025 Support with website translation services 6 Nixon Peabody LLP $ 5,000 9/13/2022 9/30/2022 Legal review of CCCE's investment management agreement with RBC 7 TEC Group, Inc. $ 95,000 9/15/2022 9/30/2023 Temporary staff augmentation service for a one-year term with early termination option 8 Monterey Language Services $ 73,000 10/1/2022 9/30/2023 Amendment No. 2 to executed Amendment No.1 dated 9/28/21 increasing term to 9/30/2023 9 FM3 Research $ 32,750 1/4/2023 9/30/2023 Customer Survey Project 10 Waltz Creative, LLC $ 90,000 10/1/2022 3/31/2023 Amendment No. 1 to executed agreement dated 12/9/2021 increasing the term to 3/31/2023. 11 MRW & Associates LLC $ 9,000 10/5/202 12/31/2022 In support of development of CCCE's 2022 Integrated Resource Plan 12 Heather Vowell $ 75,600 12/24/2022 3/31/2023 Amendment No.1 to Board Clerk Service Agreement to add additional $25,200 and extern term for an additional 3-months.

Quarterly Regulatory and Legislative Update
February 15, 2023
2 Table of Contents
REGULATORY UPDATE ..................................................................................................................................3 Executive Summary ..................................................................................................................................3 Integrated Resource Planning (IRP): GHG Reduction Planning.................................................................3 Resource Adequacy (RA): Grid Reliability Planning ..................................................................................4 Provider of Last Resort (POLR): Emergency Transition Planning ..............................................................6 California Arrearages Payment Program (CAPP) ......................................................................................7 Percentage of Income Payment Plan (PIPP) Pilot Programs.....................................................................7 California Energy Commission Load Management Standards..................................................................8 Demand Flexibility Through Electric Rates ...............................................................................................8 GO 156 Annual Supplier Diversity Report & Plan .....................................................................................9 LEGISLATIVE UPDATE....................................................................................................................................9 Executive Summary ..................................................................................................................................9 State Legislators........................................................................................................................................9 The California State Budget ....................................................................................................................10 3 REGULATORY UPDATE
Executive Summary
The beginning of 2023 has been extremely busy on the regulatory side. Since January 1st the CPUC has issued staff proposals or a Proposed Decision in three major proceedings impacting 3CE procurement and operations: Integrated Resource Planning (IRP), Resource Adequacy (RA), and Provider of Last Resort (POLR). On the IRP side, an improvement to eligibility rules that would make more 3CE resources able to contribute towards procurement mandate compliance is offset by a new procurement mandate for 2026-2027. In the RA and POLR spaces CPUC staff are seeking increasing visibility and oversight over CCA operations out of stated concern for grid reliability and system stability.

Particularly concerning is CPUC staff interest in tying RA compliance to CCAs’ ability to expand and to access new financial benefits at a uniquely uncertain time for the RA program. Over the past year, load-serving entities have been navigating two major transitions in the RA program: the rollout of the Central Procurement Entity for Local RA, which encountered significant complications, and the coming transition to a brand new slice-of-day paradigm on the System RA side. At the same time, the overall market for RA capacity has tightened due to, among other factors, increasing limitations on the amount of RA capacity certain resources count for. Staff have already been actively engaged with the CPUC around the impact of all these changes on RA procurement planning and will push back strongly on these new proposals in the coming months.

Further regulatory updates are below. This report is not comprehensive but represents the issues with the largest and/or most immediate impact to 3CE’s customers and operations. 3CE staff are available for further discussion if Board members have questions or would like additional detail.

Integrated Resource Planning (IRP): GHG Reduction Planning Integrated Resource Planning (IRP) is the California Public Utilities Commission’s (CPUC’s) process for ensuring that the electricity sector meets its portion of California’s 2030 greenhouse gas (GHG) reduction goals. Each load-serving entity (LSE) must biennially submit an Integrated Resource Plan to the CPUC detailing the resources it plans to procure through 2035 and demonstrating that these will produce GHG emissions at or below an assigned benchmark based on the LSE’s share of statewide load. 3CE submitted its most recent IRP to the CPUC on November 1, 2022, and the materials are available on 3CE’s website. The CPUC will release a Proposed Decision certifying the 2022 IRPs in 2023.

Additionally, on January 13, 2023, CPUC issued a Proposed Decision1 proposing changes to the Mid-Term Reliability (MTR) mandate plus a new mandate that could have significant impacts on 3CE procurement.2 The Ruling acknowledges the difficulty of meeting the current MTR requirements caused by both global supply chain conditions and the original structure of the MTR itself. Among other provisions, the Proposed Decision makes two potential changes to the MTR requirements:
1 The Proposed Decision
2 Recall that in the MTR Decision the CPUC ordered 11,500 MW of new resource procurement between 2023 and 2026 to ensure reliability in the years when, among other factors, the Diablo Canyon nuclear power plant was expected to retire. The Decision required all load-serving entities over which the CPUC has any degree of jurisdiction to procure load-proportional shares of that 11,500 MW, with 3CE’s share being 291 MW. See Table 6 in the MTR Decision for the procurement requirements in each year. 4 1) Expanding the pool of resources eligible to count towards MTR compliance to include any resource that has come online since January 1, 2020, while 2) Increasing each LSE’s 2025 MTR procurement requirement commensurate with the amount of capacity that the first change makes newly eligible, functionally equating to a partial extension of the deadlines for 2023 and 2024 procurement out to 2025.

This is the first structural acknowledgment from the Commission of 1) the delays the market and supply chain disruptions of the past few years have caused for new resource development, and 2) the perverse incentive against proactive new resource development created by the original MTR structure, which penalizes the load-serving entities who have proactively pursued new clean resources before the MTR mandate was issued by including their resources in the “baseline” inventory that does not count toward MTR compliance. 3CE staff held multiple meetings with CPUC staff and state legislators last year to discuss both issues and supported the baseline change in this Proposed Decision when the idea was first surfaced in a Ruling in September 2022.3
The second part of the Proposed Decision is a new procurement order for 4,000 MW of capacity to come online in 2026 and 2027, the two years after the 2023-2025 requirements of the MTR mandate are completed. The Proposed Decision does not include new analysis supporting this amount but cites increasing electricity forecasts and climate change impacts, increasing anticipated fossil fuel plant retirements, and ongoing supply chain delays that may prevent some planned resources from coming online before 2026.

On February 2, 2023, 3CE submitted joint comments with Silicon Valley Clean Energy supporting the Proposed Decision’s changes to the MTR baseline rules while pushing back on the lack of concrete analysis behind the new procurement mandate.4 The Proposed Decision is currently expected to be voted on by the CPUC on February 23, 2023.

Resource Adequacy (RA): Grid Reliability Planning
Resource Adequacy (RA) is the CPUC’s main grid reliability planning program. While the IRP process focuses on ensuring that sufficient new resources are built to meet projected demand and GHG reduction targets, the RA program is designed to ensure that existing resources actually show up in the market such that there is enough capacity available to meet peak demand and avoid blackouts. This is accomplished by requiring load-serving entities such as 3CE to sign capacity contracts wherein resources pledge to be “on call” and available to the market for certain time periods each year in exchange for the extra revenue. Each year, LSEs must buy and show to the Commission RA contracts for enough generating capacity to meet their proportion of the forecasted system peak load.5 There have been no major policy changes to the RA program since the Policy Board’s last meeting, but that is because a major restructuring of the program was finalized in June and the focus has shifted to implementation. Last year, on June 24th the CPUC issued a Decision fundamentally altering the structure of the RA program to address the shifting reliability challenges facing California’s increasingly 3 The Ruling and 3CE’s comments
4 The Joint Comments of 3CE and SVCE
5 There are three distinct types of RA, all of which have separate requirements. System RA can come from any resource anywhere in the California Independent System Operator’s (CAISO) balancing area. Local RA must come from specific locally constrained areas to ensure that those areas have sufficient generation online, and Flexible RA must be from resources with fast-ramping capabilities to assist in addressing the duck curve. 5 renewable-dominated grid.6 The new model, called “slice-of-day,” will require LSEs to show contracts for capacity available in each of the 24 hours of the day rather than only in the hour of peak demand as was previously required. Slice-of-day is designed to more rigorously ensure reliability in a renewable-dominated grid by avoiding the assumption built into in the previous RA framework that every resource was available in all hours of the day.

While the June Decision selected the broad structure of the new framework, many details remain to be fleshed out. In order to decide these the Commission held a series of stakeholder workshops in the second half of 2022 to gather feedback on the open questions. These will be followed by second Decision by Q1 of 2023 adopting the Commission’s selected answers into official program rules. The finished slice-of-day framework will go into effect for the first time in 2023 for 2024 year-ahead planning on a trial-only basis, and will take full effect including penalties for deficiencies in the following year. 3CE and other load-serving entities are working through the significant uncertainty introduced into RA procurement by the introduction of a Central Procurement Entity (CPE) for Local RA.7 In 2020 the CPUC created the CPE function and awarded it to PG&E and Southern California Edison (SCE) in their respective service areas in an attempt to address increased Local RA market prices. The CPEs (PG&E and SCE) were charged with procuring Local RA on behalf of all load-serving entities in their service areas and recovering the cost of the procurement from ratepayers through the existing Cost Allocation Mechanism (CAM) charge. The inaugural round of CPE procurement has encountered significant obstacles requiring iteration on the process, and ultimately PG&E was only able to procure 74% of the Local RA it was tasked with finding. This outcome has highlighted ambiguities around how the CPE function interacts with the System RA requirements that all LSEs are still individually responsible for procuring and giving LSEs very little time between receiving their final System RA requirement and having to demonstrate compliance.

Since the summer of 2022, 3CE has been pushing the Commission to clarify these ambiguities and to avoid a repeat of the potential cost increases they create. 3CE staff met with Energy Division staff in July and August 2022 to discuss how the CPE process was affecting RA procurement planning and seek clarity on how PG&E’s CPE deficiency affected LSE RA requirements. On September 16, 2022, 3CE filed a Motion for Clarification jointly with Peninsula Clean Energy seeking a formal Commission response on the same question.8 The Motion for Clarification was subsequently supported by five other parties but the CPUC declined to respond. 3CE staff then met again with the CPUC in December, this time with the office of President Reynolds.

On January 20, 2023, stakeholders had the opportunity to propose incremental changes to the RA program as part of an annual “catch-all” track of RA program administration. 3CE proposed clarifications to the CPE process while Commission staff proposed eight changes of their own.9 The most notable was a proposal to prohibit CCA expansion in a given year if the CCA seeking to expand has had an RA deficiency in any month of the previous two calendar years. This proposal would constitute a significant expansion of CPUC oversight over CCA growth and does not appear to be consistent with the CPUC’s statutorily assigned role in CCA expansion.
6 RA 24-hour framework D. 22-06-050
7 Decision 20-06-002 created the CPE
8 The Motion for Clarification
9 3CE Proposals and Energy Division Proposals for Proceeding R.21-10-002 6 These proposals are not yet part of a Proposed Decision, and there is opportunity for 3CE to shape the coming Proposed Decision through comments and upcoming workshops. 3CE intends to push back strongly on the expansion proposal while maintaining the push for CPE improvements.

Provider of Last Resort (POLR): Emergency Transition Planning “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 provide service. The investor-owned utilities (IOUs) were traditionally assumed to be the POLRs should a CCA fail, and in 2019 this responsibility was made explicit through SB 520 (Hertzberg, 2019).10 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 a rulemaking to implement SB 520 that 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.

One of the major issues at stake for CCAs in this proceeding is potential increases to the Financial Security Requirement (FSR). The FSR is an amount CCAs must post in cash or letters of credit to cover the estimated 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. From the time the current FSR methodology was adopted in 2018 until May 2022, 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 cover any necessary procurement. That left only the administrative costs, resulting in the FSR sitting at the Commission-set minimum of $147,000.

In 2022, elevated energy market prices led SCE to increase its requested FSR from CCCE from $147,000 to $2.9 million. The Commission denied this request due to the pending reform conversation in this proceeding, but the sharp increase in SCE’s requested amount highlighted the flaws in the current FSR methodology. 3CE and CalCCA are actively involved in designing an improved methodology, and CalCCA submitted comments and reply comments in July and August 2022 proposals.11 A major theme of these proposals is that an investment-grade credit rating, which validates a CCA’s financial health and risk management approach, should be allowed to reduce the FSR a CCA must post. 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 or programs, lower rates, or otherwise used in ways that create greater benefit to customers than being tied up in the FSR.

After little activity in Q4 of 2022, on January 6, 2023, Commission staff released their own set of proposals to be considered by the CPUC Commissioners alongside those proposed by stakeholders.12 These focus mainly on defining the process for a CCA exiting service and transitioning its customers back to an investor-owned utility, reflecting continued staff concern about the first CCA exits in 2021 (Western Community Energy and BPROUD). However, the proposals also seek to expand CPUC visibility into CCA operations through increased financial monitoring of CCAs that hit certain trigger points such as a credit score downgrade to below investment grade. Staff do not propose significant changes to the 10 Bill Text - SB-520 Electrical service: provider of last resort. 11 CalCCA comments and reply comments containing proposals 12 Staff Proposal For Phase 1 Issues in the Provider of Last Resort Proceeding (ca.gov) 7 FSR methodology, but do suggest offering an FSR reduction to CCAs that are willing to demonstrate compliance with certain financial hedging requirements and are free of Resource Adequacy and Integrated Resource Planning procurement deficiencies. 3CE staff plan to push back on this approach in coming comments, due to both concerns about CPUC entrance into CCA hedging oversight and a preference for the aforementioned credit score-based FSR reduction option as a more comprehensive measure of financial health. Discussion of both the CPUC staff proposals and those made by stakeholders last summer will continue through 2023 with a Decision scheduled for the end of the year.

California Arrearages Payment Program (CAPP)
The adopted FY 2022-2023 state budget included $1.2 billion for a second round of the California Arrearages Payment Program. Recall that CAPP is a pandemic relief program wherein state funds are used to directly buy down residential and commercial utilities arrearages accumulated during the pandemic. The second round of funding will go towards arrearages accrued through December 31, 2021.

Through the first round of CAPP, 3CE was able to provide $2,915,136 in credits to active and inactive residential and active commercial customer accounts. This was roughly 45% of customers’ initial need, the same percentage of asking amount granted to all LSEs applying for CAPP funds in the first round.

With the program renewed for a second round (CAPP 2.0), 3CE collaborated with both SCE and PG&E to successfully complete another application and secure relief for the remaining debt.

CAPP 2.0 will follow the same format as the program’s first iteration, with the sole major distinction that this round of funding is available only to residential customers. 3CE was able to secure $1,539,192.64 in CAPP 2.0 funding. Of that total, PG&E has estimated that the allotted $1,505,601.97 for shared 3CE customers were applied to all customer accounts by January 20th. SCE began distributing credits last week and will disperse all $33,590.67 of 3CE’s designated allotment by the end of this month. As the credits follow the billing cycle for both IOUs, customers will begin seeing them on their bill about one month after the utility has distributed the credit.

Percentage of Income Payment Plan (PIPP) Pilot Programs 3CE has been collaborating with both PG&E and SCE in designing a new pilot program called the Percentage of Income Payment Plan (PIPP).13 PIPP customers will 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. 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.

The pilot program is open to CARE-eligible customers that either 1) are in zip codes with the highest rates of recurring disconnections, or 2) were disconnected 2 or more times during the 12 months prior to the disconnection moratorium. 3CE has been allotted 515 customers in the PG&E service area and 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 13 The PIPP pilots were authorized in October 2021 by Decision 21-10-012, available here: 413823568.PDF (ca.gov)
8 funding model for CCA affordability programs. 3CE has been participating in a bi-weekly PIPP Working Group which includes IOUs, CCAs, consumer advocates, and community-based organizations to make recommendations for long-term program design after the 48-month pilot.

PG&E began outreach to 700 of its eligible bundled customers for registration into the PIPP program in January 2023 and will begin outreach to CCA customers in mid-March. Notices sent to shared customers will include co-branding messaging. For SCE, enrollment of both CCA and bundled IOU customers will be concurrent. SCE began sending outreach and PIPP enrollment materials to all eligible customers at the end of January. This material was not co-branded as their advice letter outlining PIPP implementation did not have the same explicit requirement as PG&E’s.

California Energy Commission Load Management Standards
After the CPUC, the California Energy Commission (CEC) is the state agency most involved with electricity sector regulation. While the CEC does not have jurisdiction over CCAs, it is charged with improving demand flexibility in order to support grid reliability through its Load Management Standard program.

On October 12, 2022, the CEC adopted the final version of its updated Load Management Standard Regulations. They require IOUs, POUs, and CCAs (with a load greater than 700 GWh/year) to consider and present to their governing bodies, for approval by the CEC, hourly marginal cost-based rates by 2025. The goal is to facilitate an opportunity for demand response and load flexibility across all customer classes. These rates would be optional for customers to adopt, but development of this option for each customer class would be mandatory. Each load-serving entity must develop a rate that complies with its requirements and present the rate to the rate making authority (e.g., CCA governing boards). The utilities must provide copies of their proposed rate for informational purposes to the CEC.

Despite the seeming deference to the local rate making authority, failure to comply with the regulations can result in the Executive Director of the CEC filing a Complaint at the CEC or seeking injunctive relief.

The CEC has created a working group to achieve the implementation of the LMS. The CEC Working Group focuses on the systems and processes needed for participating LSEs to complete the first requirement of the LMS: uploading their time-dependent rate information into the CEC’s public Market Informed Demand Automation Server (MIDAS). The goal is to have a single platform where all LSE time-dependent rate data can be stored and queried by the public for transparency available by July 2023.

The working group has already identified several obstacles to implementation, many of which CalCCA raised in comments before the new regulations were finalized. Most hinge on the fact that CCAs do not receive the real-time data required for hourly time-dependent rates and thus LMS implementation from the investor-owned utilities. Through CalCCA and 3CE staff participation in the working group, staff will continue to advocate for improved data access that will make creation of these rates possible.

Demand Flexibility Through Electric Rates
Last summer the CPUC opened a new proceeding focused on increasing demand flexibility that has the potential to impact CCA rate-making.14 Citing reliability, affordability, and decarbonization concerns, the Commission intends to produce a new set of rate making principles and guidance aimed at increasing access to and participation in demand flexibility rates for all California consumers. 14 Rulemaking 22-07-005
9 This proceeding will explore solutions to data access between CCAs and investor-owned utilities (IOUs) and pilots for future rate changes, including income-graduated fixed charges introduced with the passage of AB 205 in 2022. 3CE has been participating in this proceeding to ensure CCA rate autonomy is preserved, monitor changes to IOU transmission and distribution rate components, work to limit fixed charges to the transmission and distribution portion of billing, and ensure that any rate structure changes at the IOUs do not introduce cost shifts between IOU and CCA customers. 3CE staff are currently participating in two working groups hosted by the CPUC associated with Phase 1 of this proceeding. Working Group 1 is providing guidance for Demand Flexibility Rate Design and LMS compliance and Working Group 2 is focusing on the systems & processes needed to ensure access to dynamic prices by bundled and unbundled customers, devices, DER, and third-party service providers.

The working groups are scheduled to have finalized proposals for CPUC consideration by the end of March 2023. While this proceeding does not directly govern CCA rate-setting right now, it is a relevant forum for addressing issues around LMS compliance and could hold implications for CCA rate-making in the future.

GO 156 Annual Supplier Diversity Report & Plan
GO 156 is a California Public Utilities Commission (CPUC) program that requires California load-serving entities to report on the portion of their contracts and subcontracts that are signed with businesses that qualify as Women, Minority, Disabled, Veteran, Lesbian, Gay, Bisexual, Transgender Business Enterprises (WMDVLGBTBE). Pursuant to GO 156, 3CE Staff have begun working on the 2022 Annual Supplier Diversity Report and 2023 Plan and will submit it to the CPUC by March 1, 2023. The report will present 3CE’s 2022 annual spend on the utilization WMDVLGBTBE and planned activities to support small, local, and diverse businesses in 2023. This is 3CE’s third year completing the annual report and plan. As done in previous submissions, staff will highlight how equity is a priority of our board decisions and organizational practices.

LEGISLATIVE UPDATE
Executive Summary
Staff expect 2023 to be another intense legislative year for energy issues. Early indications are that legislators will again be focused on grid reliability, building clean resources quickly, and addressing ongoing concern over energy affordability statewide. Staff will spend the first quarter of 2023 meeting with legislators to update them on 3CE developments or, in the case of new legislators, introduce them to the agency. The deadline for bill introductions is February 17, 2023, so it is too early to have seen detailed language yet on many of the bills legislators will be running this year. Staff will be analyzing those as they come in, and bills relevant to 3CE operations will be shared as they develop.

State Legislators
The 2022 elections brought several new state legislators into seats representing 3CE’s communities. In 2023 four Assemblymembers and two Senators will represent 3CE communities, one less Senate seat than in 2022 due to redistricting. Senator John Laird, Senator Monique Limón, and Assemblymember Robert Rivas remain part of 3CE’s delegation, now joined by Assemblymember Gail Pellerin, Assemblymember Dawn Addis, and Assemblymember Gregg Hart. 3CE has begun meeting with legislators to understand their legislative priorities for the year and introduce the agency to those who are newly elected.
10 The California State Budget
The early stages of the state budgeting process show a substantial change from the surplus conditions of last year. Governor Newsom’s January 2023-2024 Budget Proposal forecasts General Fund revenues will be $29.5 billion lower than at the 2022 Budget Act projections, creating an estimated budget gap of $22.5 billion in the 2023-2024 fiscal year. To address this the Budget proposes $897 million in General Fund reductions and $370 million in General Fund delays to future years. The Budget maintains $7 billion of the $7.9 billion originally allocated to energy initiatives, and the cuts are not expected to directly affect any 3CE programs or operations.

However, the Budget also contains indications that the budgeting process will be a significant vehicle for energy policymaking again this session. In 2022 budget trailer bills carried important new energy policies such as the creation of the Strategic Reliability Reserve at the California Department of Water Resources (DWR). Though it is still very early in the budgeting process, the current proposal expresses interest in further expanding DWR’s role in centralized electricity procurement and leveraging new penalties on load-serving entities who fail to meet procurement requirements set by the CPUC. 3CE will be monitoring the budgeting process closely to see how these ideas evolve and advocate around them as necessary.

Compiled Financial Statements 1
Compiled Budgetary Comparison Schedule 6
Budget Variance Commentary 9
Financial Dashboard 10
Investment Summary 11
Table of Contents

TREASURER REPORT
Fiscal Year to Date
As of November 30, 2022
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 November 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 Energy’s annual audited financial statements include the note disclosures omitted from these interim statements. If the omitted disclosures were included in these financial statements, they might influence the user’s conclusions about the Authority’s financial position, results of operations, and cash flows. Accordingly, these financial statements are not designed for those who are not informed about such matters.

We are not independent with respect to the Authority because we performed certain accounting services that impaired our independence.

Maher Accountancy
San Rafael, CA
January 4, 2023
1101 Fifth Avenue, Suite 200 San Rafael, CA 94901 415 459 1249 mahercpa.com Current assets
Cash and cash equivalents
Held for working capital 35,900,000 $
Held for reserves 97,924,541
Cash and cash equivalents 133,824,541
Accounts receivable, net of allowance 37,029,406
Accrued revenue 26,016,675
Loan receivable 276,719
Other receivables 13,989,541
Prepaid expenses 401,275
Deposits 3,136,719
Restricted cash 294,000
Investments - held for reserves 66,873,521
Total current assets 281,842,397
Noncurrent assets
Deposits 23,182
Loan receivable 1,614,833
Capital assets, net of depreciation 257,788
Total noncurrent assets 1,895,803
Total assets 283,738,200
Current liabilities
Accrued cost of electricity 36,557,192
Accounts payable 703,113
Other accrued liabilities 1,412,004
User taxes and energy surcharges due to other governments 1,679,272 Security deposits - energy suppliers 1,100,000
Total current liabilities 41,451,581
Noncurrent liabilities
Security deposits - energy suppliers 9,131,250
Total noncurrent liabilities 9,131,250
Total liabilities 50,582,831
Investment in capital assets 257,788
Restricted for security collateral 294,000
Unrestricted 232,603,581
Total net position 233,155,369 $

NET POSITION
As of November 30, 2022

STATEMENT OF NET POSITION

CENTRAL COAST COMMUNITY ENERGY
ASSETS

LIABILITIES
See accountants' compilation report. 2

OPERATING REVENUES
Electricity sales, net $ 79,954,688
Liquidated damages 4,941,000
Total operating revenues 84,895,688

OPERATING EXPENSES
Cost of electricity 59,515,615
Contract services 1,152,930
Staff compensation 1,074,176
General and administration 800,328
Depreciation 17,223
Total operating expenses 62,560,272
Operating income (loss) 22,335,416

NONOPERATING REVENUES (EXPENSES)
Interest and investment income 816,181
Nonoperating revenues (expenses) 816,181
CHANGE IN NET POSITION 23,151,597
Net position at beginning of period 210,003,772
Net position at end of period 233,155,369 $
Two Months Ended November 30, 2022

AND CHANGES IN NET POSITION

STATEMENT OF REVENUES, EXPENSES

CENTRAL COAST COMMUNITY ENERGY
See accountants' compilation report. 3

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers $ 83,611,648
Receipts from liquidated damages 147,000
Receipts from suppliers 215,058
Payments to suppliers for electricity (61,480,264)
Payments for other goods and services (2,465,240)
Payments for staff compensation (984,543)
Payments of taxes and energy surcharges to other governments (1,694,820) Net cash provided by operating activities 17,348,839

CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES
Principal payments received on loan receivable 108,448

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Payments to acquire capital assets (55,692)
(55,692)

CASH FLOWS FROM INVESTING ACTIVITIES
Interest income received 4,489,987
Purchase of investments (38,163,910)
Net cash provided (used) by investing activities (33,673,923) Net change in cash and cash equivalents (16,272,328)
Cash and cash equivalents at beginning of year 150,390,869 Cash and cash equivalents at end of period $ 134,118,541 Reconciliation to the Statement of Net Position
Cash and cash equivalents (unrestricted) 133,824,541 $
Restricted cash 294,000
Cash and cash equivalents 134,118,541 $
Two Months Ended November 30, 2022

STATEMENT OF CASH FLOWS

CENTRAL COAST COMMUNITY ENERGY
See accountants' compilation report. 4
Operating income (loss) 22,335,416 $
Adjustments to reconcile operating income (loss) to net cash provided by operating activities
Depreciation expense 17,223
Provision for uncollectible accounts 1,217,584
(Increase) decrease in:

Accounts receivable, net 8,860,610
Accrued revenue (7,854,729)
Other receivables (3,290,009)
Prepaid expenses (92,856)
Deposits (654,200)
Increase (decrease) in:

Accrued cost of electricity (3,517,390)
Accounts payable (886,098)
Other accrued liabilities 375,980
User taxes and energy surcharges due to other governments (262,692) Security deposits - energy suppliers 1,100,000
Net cash provided by operating activities 17,348,839 $

CENTRAL COAST COMMUNITY ENERGY
STATEMENT OF CASH FLOWS (continued)
Two Months Ended November 30, 2022

RECONCILIATION OF OPERATING INCOME (LOSS) TO NET

CASH PROVIDED BY OPERATING ACTIVITIES
See accountants' compilation report. 5
6 ACCOUNTANTS’ COMPILATION REPORT
Board of Directors
Central Coast Community Energy
Management is responsible for the accompanying special purpose statements of Central Coast Community Energy (a California Joint Powers Authority) which comprise the budgetary comparison schedule and a supplemental budgetary comparison schedule for the period ended November 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 Energy’s annual audited financial statements include the note disclosures omitted from these interim statements. If the omitted disclosures were included in these financial statements, they might influence the user’s conclusions about the Authority’s financial position, results of operations, and cash flows. Accordingly, these financial statements are not designed for those who are not informed about such matters.

We are not independent with respect to the Authority because we performed certain accounting services that impaired our independence.

Maher Accountancy
San Rafael, CA
January 4, 2023
1101 Fifth Avenue, Suite 200 San Rafael, CA 94901 415 459 1249 mahercpa.com 2022/23 YTD
Actual
2022/23 Annual
Budget
2022/23 Budget
Less Actual
Expenditures
Cost of energy 59,663,781 $ 377,918,806 $ 318,255,025 $ Data manager 15,476 2,793,200 2,777,724
Utility service fees 291,455 2,100,000 1,808,545
Advertising 80,000 500,000 420,000
Contingency - 1,100,000 1,100,000
Subscriptions - 611,062 611,062
Legal 151,493 1,844,660 1,693,167
IT consulting - 593,469 593,469
Other consultants 289,162 563,000 273,838
Technical consultants 31,156 1,541,093 1,509,937
Employee welfare 92,060 1,086,406 994,346
Retirement plan contributions 75,093 707,508 632,415
Salaries and wages 907,023 7,042,640 6,135,617
Energy programs 501,665 15,992,012 15,490,347
Bad debt allowance 1,217,584 7,500,000 6,282,416
Other (not displayed in approved budget) 444,685 3,756,205 3,311,520 Total expenditures $ 63,760,633 $ 425,650,061 $ 361,889,428

CENTRAL COAST COMMUNITY ENERGY

BUDGETARY COMPARISON SCHEDULE
Two Months Ended November 30, 2022
See accountants' compilation report. 7
2022/23 YTD
Budget
2022/23 YTD
Actual
2022/23 YTD
Budget Variance
(Under) Over
2022/23 YTD
Actual / Budget %
2022/23 Annual
Budget
2022/23 Budget
Less Actual
2022/23 Budget
Remaining /
Budget %

REVENUES AND OTHER SOURCES
Electricity sales 85,905,000 $ 81,172,272 $ (4,732,728) $ 94% 436,500,000 $ 355,327,728 $ 81% Less uncollectible accounts (1,250,000) (1,217,584) 32,416 97% (7,500,000) (6,282,416) 84% Revenue for damages - 4,941,000 4,941,000 n/a - (4,941,000) n/a Investment and miscellaneous income - 816,181 816,181 n/a - (816,181) n/a Total revenues and other sources 84,655,000 85,711,869 1,056,869 101% 429,000,000 343,288,131 80% EXPENDITURES AND OTHER USESCurrent Expenditures
Cost of energy 59,663,781 53,500,000 6,163,781 112% 377,919,000 318,255,219 84% Energy programs (incentives and grants) 2,665,000 501,665 (2,163,335) 19% 15,992,000 15,490,335 97% Data manager 15,000 15,476 476 103% 2,793,000 2,777,524 99% Utility service fees 350,000 291,455 (58,545) 83% 2,100,000 1,808,545 86% Staffing 1,539,000 1,074,176 (464,824) 70% 9,244,000 8,169,824 88% Professional services 1,067,000 379,536 (687,464) 36% 3,397,000 3,017,464 89% Legal services 328,000 156,651 (171,349) 48% 1,965,000 1,808,349 92% Marketing and customer enrollment 166,000 100,429 (65,571) 60% 994,000 893,571 90% Other general & administration 702,000 359,880 (342,120) 51% 3,746,000 3,386,120 90% Total current expenditures 60,332,000 62,543,049 2,211,049 104% 418,150,000 355,606,951 85% Other Uses
Capital outlay - 55,693 55,693 n/a - (55,693) n/a
Total other uses - 55,693 55,693 n/a - (55,693)
Total Expenditures and Other Uses 60,332,000 62,598,742 2,266,742 104% 418,150,000 355,551,258 85% Surplus (Deficit) $ 24,323,000 $ 23,113,127 $ (1,209,873) $ 10,850,000 $ (12,263,127) -113% Reserves at end of reporting period:

Held for Working Capital $ 35,900,000 Held for Reserves - Cash and Cash Equivalents 97,924,541 Held for Reserves - Investments 66,873,521 Total $ 200,698,062

CENTRAL COAST COMMUNITY ENERGY

SUPPLEMENTAL BUDGETARY COMPARISON SCHEDULE
Two Months Ended November 30, 2022
See accountants' compilation report. 8
CCA Program Surplus/(Deficit)
per budgetary comparison schedule: 23,113,127 $
Adjustments needed to reconcile to the
changes in net position in the
Statement of Revenues, Expenses
and Changes in Net Position:

Subtract depreciation expense (17,223)
Add back capital asset acquisitions 55,693
Change in Net Position 23,151,597 $

REVENUES, EXPENSES AND CHANGES IN NET POSITION

CENTRAL COAST COMMUNITY ENERGY

BUDGET RECONCILIATION TO STATEMENT OF
Two Months Ended November 30, 2022
See accountants' compilation report. 9
Budget Item YTD Variance Comment
Electric Sales Revenue (5.5%) 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 11.5% 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 (30.2%) Staffing expenses are under budget due to the timing of new hires.

Professional Services (64.4%) This category includes accounting, IT, technical and other consultants.

Legal Costs (52.2%) This category includes outside legal costs for regulatory and energy procurement needs.

Marketing and customer enrollment (39.5%) Variance is mostly due to the lower than anticipated costs of recent customer enrollments.

Data Management Services 3.2% These fees non-discretionary and are charged on a per customer basis.

Utility Service Fees (16.7%) These are PG&E and SCE fees charged on a per customer basis.

Other General & Administrative (48.7%) This category includes occupancy costs, industry membership dues, and other general and administrative costs.

Energy and Related Programs (81.2%) Programs expenses have generally been delayed until future periods Budget Commentary for significant items

CENTRAL COAST COMMUNITY ENERGY
October 1, 2022 through November 30, 2022
10 $7.8
$14.7
Act
Bud
$20.3
$31.2
$51.1
$0.0
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
Actual
Budget
$80.0
$84.7
$429.0
$0.0
$100.0
$200.0
$300.0
$400.0
$500.0
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
Actual
Budget
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
Actual (T48/T8) 418 398
Budget 453 425
0 50
100
150
200
250
300
350
400
450
500

CUSTOMERS

SALES VOLUME
398 GWh

STD MARGIN
$7.8M (21%)
Δ in NET ASSETS
$9.4M

REVENUE
$41.4M
Cumulative YTD Electricity Sales Cumulative YTD Direct Margin Fiscal Year Electricity Sales are $4.7M behind of budget, Margin dollars are $10.9M below budget.

Data Definitions:

CUSTOMERS: From GridX invoice + Calpine.

REPORTED / SALES VOLUME: Best available estimate of actual meter volume.  Currently based on Calpine/GridX T+8 SQMD Report and T+48 when available.

REVENUE: Total Operating Revenue, net of uncollectible, (excludes Miscellaneous and Interest income).

NON‐OP REV: Other uses, primarily Interest Income
ELECTRICITY SALES: Sales from electricity (net of uncollectible).

STD MARGIN: Electricity Sales less cost of energy (Forecasting & scheduling included in Cost of Energy to match budget) ACTUAL: Same as sales volume above
BUDGET: Volumes from  FY22/23 budget
Monthly Sales Volume (GWh)
Financial Dashboard: November 2022
Margin %

CUSTOMERS
447,500
ACTIVE
November revenue of $41.4M accounts for
398 GWh in net retail consumption. This
comes in 27Gwh below budgeted volume.

Year‐to‐date electricity revenue in the
second month is $80M compared to a
budget of $84.7M. Margins of $20.3M is
down $10.9M.
37%
47%
16%
35%
47%
18%
Res
Com
Ag
YTD Month
39%
46%
15%
36%
47%
18%
Res
Com
Ag
YTD Month
Revenue $41.4
C.O.E. $30.1
OpEx $1.9
Net Income $9.4 20.6%

35.9%
Act
Bud
Margin $
11 Return of Investments YTD Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep CASH AND CASH EQUIVALENTSRiver City Bank - Money Market and other Interest Earning AccountsFunds Invested - Average Balance $ 68,793,882 $ 70,230,463 -$ $ - $ - $ - $ - $ - $ - $ - $ - $ -Gains/Losses/Interest $ 179,659 $ 85,008 $ 94,651 Average APY 1.48% 1.62%INVESTMENTSRiver City Bank - Treasury-indexed productsFunds Invested - Average Balance $ 40,162,814 $ 45,259,882 -$ $ - $ - $ - $ - $ - $ - $ - $ - $ - Gains/Losses/Interest $ 213,763 67,213.37 146,549.22 - - - - - - - - Average APY 2.01% 3.89%RBC GAM / Principal Financal Funds Invested - Average Balance $ 75,380,564 $ 75,641,706 -$ $ - $ - $ - $ - $ - $ - $ - $ - $ - Gains/Losses/Interest $ 404,876 143,733.97 261,142.30 - - - - - - - - Average APY 2.29% 4.14%Benchmark - iShares ICE Short Treasury Index 0.47% 0.47%

CENTRAL COAST COMMUNITY ENERGY
Investment Summary
October 1, 2022 through November 30, 2022
12 Staff Report Item 8
TO: 3CE Policy Board of Directors
FROM: Tom Habashi, CEO
SUBJECT: Receive 2021-2022 3CE Annual Report
DATE: February 15, 2023
RECOMMENDATION:

This recommends the Policy Board receive the 3CE FY 21-22 Annual Report.

BACKGROUND:
3CE is proud to release its 2021-2022 Annual Report, which showcases significant developments at the agency and highlights key initiatives such as our innovative energy programs, 3CE’s pathway to 100% renewable by 2030, and ongoing community outreach. The report also documents the agency’s work on several new California renewable energy projects including geothermal, solar, wind, and energy storage.

Altogether, the report demonstrates consistent progress toward agency goals as well as a positive financial outlook.
2022
Annual
Report
Header Letter from CEO
2 This past year, as businesses re-opened and
people returned to a semblance of normal life,
Central Coast Community Energy (CCCE) helped
ease the transition: providing rate relief for those
in need, while continuing to source clean energy
to help local businesses bounce back.

We did so despite challenges such as increasingly
volatile energy markets, soaring prices and supply
chain issues. CCCE made significant progress
toward our goal of achieving 100% clean and
renewable energy by 2030, thanks to focusing
on our goals and staying the course. We have
advanced our projects and program offerings
while protecting our customers from rate spikes
and providing affordable, clean energy.

Renewables
CCCE’s goal is to achieve 60% renewable energy
by 2025, and 100% by 2030. We are making
steady progress in delivering on that promise.

While others scrambled to review their strategies
to respond to new regulations and higher energy
prices, we saw previous investments come to life.

Five new renewable energy projects came online
this year, growing our ability to meet customer
demand. These five projects together can supply
22% of our customers’ annual energy needs.

Power Supply
In our effort to keep our promise of 100% clean
and renewable energy at affordable prices, we
know the critical piece is storing that energy for
later use. We have and will continue to invest in
battery storage to help with reliability and meet
energy needs when the sun goes down but
demand remains high.

Pricing
Market prices climbed everywhere, prompting
others to seek to reopen contracts to push
for higher prices that would ultimately fall to
customers.

At CCCE, however, we believe in honoring the
commitments we’ve made. We signed many
energy supply contracts when prices were more
favorable, which has protected our customers
from spikes in prices today.

Staying the course has helped us continue
to deliver clean power at more stable,
affordable prices. Our rates help customers
in all communities, including those who are
underserved, know what to expect on their bills
and keep the lights on.

Programs
In addition to growing capacity and transparent
pricing, we expanded our programs this past year.

We exceeded previous years in terms of numbers
of applicants and funding spent on the programs.

Our programs addresses local climate equity
by offering double the incentives for income-qualified customers and providing accessible opportunities for eco-friendly alternatives to gas
powered vehicles and equipment.

The key is our approach. We understand
our customers, we have deep knowledge of
how to design energy programs that benefit
our communities, and we recognize strong
investments that benefit our goals. It helps
that we insist on clarity, process improvement,
reliability and the ability to grow to meet
increasing demand.

Looking ahead
Our strategy of consistent forward progress
has served us well this past year. We intend to
keep our promises as we work toward a future
of sustainable, environmentally and socially
responsible energy to power our communities.

We look forward to continuing to serve you.

Tom Habashi
Tom Habashi
Chief Executive Officer
Executive Staff
3 Robert Shaw
Chief Operating Officer
Jaya Bajpai
Chief Financial Officer
Dennis Dyc-O’Neal
Director of Power Supply
Resources
Catherine Stedman
Director of Communications
& Outreach
Jon Griesser
Director of Energy Programs
Hilary Staver
Director of Regulatory &
Legislative Affairs
Alicia Hicks
Director of Human
Resources & Administrative
Services
Tom Habashi
Chief Executive Officer
Programs Progress & Outcomes
Delivering on our goals of providing clean, renewable energy to our customers at affordable and competitive rates, we have instituted programs each year to help address each community’s unique priorities by focusing on three areas that contribute most to regional emissions: transportation, building and agriculture. These programs enable CCCE to reinvest in our local community and provide greener solutions for all customer types.

This past year, we spent more than $10 million on programs and helped them grow, with more customers becoming aware and taking advantage of them over time.

Here’s a look at how our programs have fared this past year and the positive impacts on the communities of the Central Coast.

AG ELECTRIFICATION
The Agricultural Electrification program helps farmers and ranchers electrify their operations to provide cleaner air for farmworkers and our communities, supported by rebates to upgrade to electric farm equipment. By switching to electric equipment, farmers not only help improve air quality and decrease harmful diesel exhaust, they also respond to tightening environmental standards and consumer demand for sustainable production practices. This program helps agricultural operations use more efficient technology that requires less maintenance and provides an opportunity for cost savings. Rebates are available for farmers who switch to electric irrigation pumps, boiler/ chilling systems, forklifts, tractors, transportation and more.

CCCE increased its focus on small businesses with this program, resulting in 22 of 34 total projects helping small agricultural operations. For the coming year, we plan to adjust incentive levels to increase the impacts of the program and support for small farmers, as well as include a training component to help with the maintenance of electric equipment. A new focus for the upcoming fiscal year includes support for high-powered EV charging stations that can completely recharge a typical electric battery in about 30 minutes, reducing the wait time needed to charge electric vehicles and other equipment.

Total community reinvestment via Ag Electrification Program rebates: $594,270

ELECTRIFY YOUR RIDE
Our Electrify Your Ride program has provided 2,231 residents with $2.8 million in rebates for electric vehicles, chargers and assistance to support electric vehicle charger installation.

Because transportation produces the largest share of greenhouse gas emissions in the U.S., electrifying vehicles will have a significant payoff in the long run. This program will help individual car owners have a greater impact on our air quality, while at the same time, saving money on fuel and maintenance. We also offer incentives to help businesses and local government agencies electrify their fleets.

As we continue this program, we expect to increase our focus on developing the necessary charging infrastructure and working with a third party to support the program.

Total community reinvestment via Electrify Your Ride Program rebates: $2,832,852 4 5

ELECTRIFY YOUR HOME
Electrifying your appliances is an important move for both greenhouse gas emissions and the health of the home. The Electrify Your Home offers customers incentives to improve the air our families breathe indoors, which contributes to climate action for the planet.

Electrify Your Home helps landlords and homeowners make the switch to electric water heaters and HVAC systems.

Electrifying a home’s heating and cooling systems has been shown to benefit health and safety while also reducing
greenhouse gas emissions from gas and propane.

This past year, we initiated several projects that helped residents purchase and install the appropriate equipment, as well as make the electric panel upgrades or replacements necessary to accommodate the switch to electric appliances.

For this coming year, we plan to grow the program with
a continued focus on training and education for local
contractors who are available to assist homeowners with installations.

Total community reinvestment via Electrify Your
Home Program rebates: $68,000

SCHOOL BUS ELECTRIFICATION
The iconic yellow school bus hasn’t seen many outward
changes over the years, but some have changed significantly underneath. Electrified school buses benefit students and communities with cleaner air and cost savings.

Switching out a diesel-burning school bus for an electric one can avoid more than 15 metric tons of greenhouse gas emissions each year, while saving school districts money on fuel and maintenance. They’re even more comfortable and drive better than diesel buses.

CCCE’s program helps districts purchase and lease electric buses. In 2022, we also dedicated more than $1 million to help seven Title 1 schools in our service territory reserve electric school buses that not only reduce emissions but that protect children from exposure to harmful diesel exhaust.

Total community reinvestment via Electrify Your
Bus Program rebates: $1,456,259

NEW CONSTRUCTION

ELECTRIFICATION
What better way to encourage the use of electric appliances than to include them in homes from the start?
CCCE’s electrification program for new construction offers housing developers and homeowners incentives to build
all-electric housing. The program focuses on projects that promote affordability and address housing needs, such as affordable housing developments, farmworker housing and accessory dwelling units.

Encouraging new construction to use electricity saves
time and money down the road by eliminating the need
for conversion later. This year, our program supported six projects with more than $600,000 in local investments. Those six projects included a total of 448 affordable housing units.

We plan to continue our concentration on affordable housing and to add new customer segments, such as infill projects, Accessory Dwelling Units, and rebuilding structures damaged or lost in wildfires.

Total community reinvestment via New
Construction Electrification Program rebates:
$602,500

MEMBER AGENCY SERVICES
Thirty-four communities joined Central Coast Community
Energy (CCCE) with the shared goal of reducing greenhouse gas emissions, supporting the growth of clean and renewable energy, and accessing new economic and environmental
benefits.

In 2022, the Electrify Your Fleet and Charge Your Fleet programs were launched. These programs were designed for CCCE’s 34 member agencies to reduce their greenhouse gas emissions. The programs help incentivize the purchase/lease and installation of electric vehicle service equipment, as well as light duty, medium duty and heavy-duty electric vehicles.

Each program provides rebates of up to $150,000 per
member agency. CCCE’s member agency programs support
our goals to reduce greenhouse gas emissions, improve air quality, and accelerate EV adoption for local government fleets.

LOOKING AHEAD
We will continue to build momentum with these programs, while working to grow customer involvement. CCCE is
particularly interested in increasing customer engagement within underserved communities, while also increasing our impact in the ongoing effort to reduce greenhouse gas
emissions.

New Renewable Energ
6 gy & Storage Projects
7 8
Power Supply Progress
For CCCE to meet our goal of providing 100% clean and renewable energy by 2030, while keeping rates affordable we need to invest along the entire supply chain, from power generation to customer use.

We are doing just that by participating in longer-term energy generation and storage projects. Our comprehensive, well-planned strategy is already showing benefits to our customers.

ACQUIRING ENERGY
In 2021, CCCE reevaluated our strategy for procuring clean, renewable energy. The result was a decision to focus on acquiring energy from new projects, which would have a longer life and make a greater impact than relying on existing renewable energy sources and carbon-free attributes. Since that decision, five energy generation projects have come online. Our plan for 2023 is to increase sources of clean energy in our portfolio.

The projects that came online include two geothermal, two solar-plus-storage projects and one wind project:

CCCE is procuring energy for the long haul, moving from short-term renewable resource purchases to longer-term
ones. To do that, we thoroughly model the costs and
availability of projects to help us reach our intended mix of mostly wind and solar with some geothermal included.

We have executed contracts for 19 projects, poised to
supply 60% of our customer’s electricity needs with clean and renewable energy by 2025. We will continue to
pursue additional new sources of carbon-free generation to meet our goal of attaining 100% clean and renewable
power by 2030.

Source Project Location About
Coso Inyo County, CA Expected to meet about 11% of CCCE’s energy needs.

Slate Kings County, CA Expected to meet about 4% of CCCE’s overall consumption.

Casa Diablo IV Mono County, CA
The first new geothermal project to be built in
California in 30 years and will serve about 1% of
CCCE’s annual load.

Mountain View Riverside, CA Began deliveries five months ahead of schedule and will cover 3% of CCCE’s annual load.

Rabbitbrush Kern County, CA Will meet 3% of our annual load. 9 ENERGY STORAGE
The key challenge in converting to 100% clean and renewable energy is overcoming the times when there is no wind or sun available. Currently, California meets those needs with fossil fuel-generated electricity.

To use renewable energy during those times, we need technologies such as batteries to store excess solar and wind energy. Storing surplus energy also allows us to have a supply when it’s needed – for instance, during outages or extreme weather – helping build more reliability into the electric grid, and keep costs down.

Energy storage will also allow us to meet consumer demand more reliably during peak usage times in the mornings and evenings.

MEETING TIMELINES
Reaching our goal of 60% renewables by 2025 and 100% by 2030 is a formidable task that is not without its obstacles. Supply chain difficulties, manufacturing disruptions, market considerations and other possible delays can affect the progress of projects from which we have contracted to receive electricity.

We are working closely with our partners to ensure our projects can be built successfully while maintaining our contract terms.

CCCE’s dedication to delivering on our promises continues to drive our performance, strategies, and success.
10 Key Accounts & Outreach
Throughout CCCE’s service area, we have large commercial customers, each with their own specific needs for their unique business. Our commercial customers account for the largest share of our electricity usage and therefore play an important role in achieving our climate goals.

To help provide local businesses with the energy they need, while also achieving greenhouse gas reductions, we partner with each customer. Business partnerships help us learn about each company’s unique requirements and plan the best course of action to deliver clean, renewable and reliable electricity, while keeping rates affordable and competitive.

We have programs that are specifically designed for businesses to help make reducing emissions an attractive proposition. CCCE’s programs, such as those aimed at helping commercial fleets transition from fossil fuels to electricity, can make a large contribution to greenhouse gas reductions.

HANDS-ON CUSTOMER SERVICE
Learning about electrification can require a time commitment from business owners – time that otherwise could be spent on customer relationships and their bottom line. However, we recognize the value of having large companies on board if we hope to achieve our clean and renewable energy goals and make a significant impact on climate-altering emissions. So we partner closely with these customers and work hard to provide efficient solutions that minimize their commitment of time and maximize opportunities for cost savings.

We strive to reach business owners in the way that is most convenient for them, try to learn about each company’s unique needs, and offer the training and education that can help ease the transition away from fossil fuels. We use workshops, surveys, direct communication and every tool available to reach this integral segment of our customer base.

Through an engaged commercial community, we will have the greatest positive impact on greenhouse gas emissions all along the Central Coast.
11 FY 22/23 Financial Overview
Key Performance
Indicators
Agriculture
Electrification
Electric
School Bus
Electrify
Your Ride
Electrify
Your Home
New Construction
Electrification
Number of Projects 34 8 2231 12 6
Incentives Committed/Paid $594K $1.4M $2.8M $68K $602K
CO2 Avoided 608 mT 148 mT 2493 mT 8.25 mT 170 mT
FY 22/23 Energy Programs
Portfolio
Proposed
FY 22/23
Budget
Community Programs
Agriculture Electrification Program $2,150,000
Electrify Your Ride Program $4,530,000
Electric Bus Program $2,000,000
Electrify Your Home Program $1,540,000
New Construction Electrification Program $1,500,000
Member Agency Programs
Reach Code Program $100,000
Electrify Your Fleet Program $2,000,000
Charge Your Fleet Program $1,250,000
Fleet Electrification Planning and
Technical Assistance Program
$450,000
Broadband Access Intiatives $150,000
Portfolio-Wide Expenses
Staffing and Professional Development $1,370,000
Program Marketing 365,000
General Program Support 327,000
Future Programs Research, Planning, and
Development
150,000
TOTAL 17,727,012
CCCE FY 22/23 Budget

LINE ITEM BUDGET NOTES
Aggregate Cost of Energy -
RA, Energy, PPA
$377,918,806.77 Key
Staffing
and
Support Data Manager $2,793,200
Service Fees - IOU $2,100,000
Advertising $500,000
Contingency $1,100,000
Subscriptions $611,062.14
Legal $1,844,660.20
IT Consulting $593,469
Other Consultants $563,000
Technical Consultants $1,541,093
Employee Welfare $1,086,405.60
Retirement Plan Contributions $707,508.36
Salaries and Wages $7,042,640.36
Energy Programs $15,992,012.04 Direct
Spend On
Programs Bad Dept Allowance $7,500,000
TOTAL $425,650,061.49
Positive outcomes from the work of CCCE's Finance
team continued during the 2021-2022 fiscal year.

CCCE maintained its 'A' issuer credit rating from
Standard & Poor's, helping to ensure agency financing
and purchasing agreements include favorable terms
that yield positive customer impacts.

New financial milestones were met with the implementation of Cost of Service rates in 2022, resulting in customer savings of up to 20% - considerably higher than many other CCAs. In collaboration with the Key Accounts & Outreach team, Finance also successfully migrated billing for 400,000 customers to a new data and billing provider. Despite the inclement condition of the global energy market, the financial outlook for CCCE and its customers is stronger than ever.
“It’s exciting to see the CCA
concept become a reality in our
area and deliver on the benefits
originally imagined.”
— Alex Yasbek, City of Watsonville
Environmental Projects Manager
Staff Report Item 9
TO: 3CE Policy Board of Directors
FROM: Rob M. Shaw, Chief Operations Officer
SUBJECT: Resolution Commending Tom Habashi
DATE: February 15, 2023
RECOMMENDATION:

That the 3CE Policy Board of Directors adopt a resolution commending Tom Habashi for his years of dedicated public service as Chief Executive Officer of Central Coast Community Energy.

RESOLUTION NO. PB-2023-01

RESOLUTION OF CENTRAL COAST COMMUNITY ENERGY HONORING

CHIEF EXECUTIVE OFFICER TOM HABASHI ON HIS RETIREMENT

AFTER ESTABLISHING AND DEDICATING YEARS OF SERVICE TO

CENTRAL COAST COMMUNITY ENERGY
WHEREAS, Tom Habashi’s decades of experience first as a municipal power engineer, then as a director of electric utilities, and finally, as CEO of two industry-leading clean-energy public agencies have earned him great respect within the energy industry; and, WHEREAS, Mr. Habashi has worked to build Central Coast Community Energy, from the time of its inception, into the organization it is today, expanding the agency from serving 265,000 customer accounts in 2018 to nearly 450,000 today; and, WHEREAS, Mr. Habashi has demonstrated a career-long focus on providing communities with reliable, renewable power at competitive rates; and,
WHEREAS, Mr. Habashi’s leadership has been instrumental in giving more than 1 million Californians a choice of energy suppliers for the first time; and, WHEREAS, Mr. Habashi has led the way on community programs to help reduce emissions in buildings and transportation; growing 3CE’s energy programs and reinvestment in local communities, from $2.6 million in 2018 to nearly $16 million in FY 22/23; and, WHEREAS, Mr. Habashi successfully negotiated Power Purchase Agreements for 1,000 MW of clean-energy resources and 400 MW of storage to serve residents and businesses on California’s Central Coast; and,
WHEREAS, During Mr. Habashi’s tenure, 3CE became the first Community Choice Aggregator to earn an A credit rating from Standard and Poor’s; and,
WHEREAS, Mr. Habashi developed and began implementing a plan to achieve 100% renewable power for Central Coast Community Energy customers by 2030, 15 years ahead of state goals; and,
WHEREAS, Mr. Habashi’s commitment to public service extends to serving on the California Community Choice Association Board of Directors and The Monterey Bay Economic Partnership Board of Directors; and,
WHEREAS, Mr. Habashi will be remembered by his staff, colleagues, and residents of the counties served by Central Coast Community Energy for his sense of humor, foresight, and 2 vision, which has contributed significantly to emission reductions, environmental protection, and the advancement of California’s Central Coast toward a sustainable energy future.

NOW, THEREFORE, BE IT RESOLVED, that the Policy Board of Directors of Central Coast Community Energy, on behalf of the more than 1 million local residents served by the agency, do hereby acknowledge, commend, and thank Tom Habashi for his contributions, and dedicated service;
BE IT FURTHER RESOLVED that the Board hereby congratulates Mr. Habashi upon his retirement and wishes him success, good health, and happiness in his retirement.

PASSED AND ADOPTED by the Policy Board of Central Coast Community Energy this 15th day of February 2023, by the following Vote:

AYES:

NOES:

ABSENT:

ATTEST:

Executive Assistant, Cynthia Satterlee
Chair, Steve McShane