Agenda packet — Central Coast Community Energy (3CE) Policy Board, June 26, 2024 (part 1 of 3)

Policy Board of Directors
June 26, 2024
1:30 PM
Central Coast Community Energy
70 Garden Court, Suite 300
Monterey, CA 93940

REMOTE LOCATION VIA

TELECONFERENCE
Any interested parties or community members may attend, and participate in, the meeting at the following addresses where Board members may also join the meeting from:

County of Santa Cruz
701 Ocean Street,
Fifth Floor Redwood Room, Room 510
Santa Cruz, CA 95060
City of Gonzales
City Hall
147 Fourth Street, Conference Room
Gonzales, CA 93926
City of Atascadero
City Hall
6500 Palma Ave, Council Chambers
Atascadero, CA 93422
Public may participate through ZOOM. For ZOOM participation please join by computer audio at: https://us02web.zoom.us/j/83507087702
Or join by phone:
+1 669 900 6833 or +1 669 219 2599
Enter this Webinar ID Number: 835 0708 7702 when prompted. Please note there is no Participant Code, you will press # again after the recording prompts you.

You will be placed in the meeting as an attendee. To make a public comment:
 If joined by computer, please press the button to raise your hand  If joined 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 to a member of 3CE staff or the Board Clerk, who will distribute the information to the Board members and staff.

The public may comment on the consent agenda and matters not listed on the agenda but within the Board's jurisdiction at the opening of the meeting. 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. The public may comment on a specific item listed on this agenda when the Board considers that item. Speakers are limited to 3 minutes each.

In addition, 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 3CE’s offices located at 70 Garden Court, Suite 300, Monterey, CA 93940 during normal business hours and are also available on the 3CE website located at: https://3cenergy.org/meetings-agendas/
REASONABLE ACCOMMODATIONS: In compliance with the Americans with Disabilities Act, any individuals who desire to request a reasonable accommodation or modification to observe or participate in the meeting may make such a request by sending an email to: [email protected] Copies of documents may be made in alternative formats, upon request. Requests for accommodations should be made no later than two (2) business days prior to the meeting to allow time for 3CE to address the request.

DISCLOSURE OF CAMPAIGN CONTRIBUTIONS: Pursuant to Government Code section 84308, members of the Board are disqualified and not able to participate in any agenda item involving contracts (other than competitively bid, labor, or personal employment contracts), franchises, discretionary land use permits and other entitlements if the Board member received more than $250 in campaign contributions from the applicant or contractor, an agent of the applicant or contractor, or any financially interested participant who actively supports or opposes the decision on the agenda item since January 1, 2023. Members of the Board who have received, and applicants, contractors or their agents who have made, campaign contributions totaling more than $250 to a Board member during the proceeding or for 12 months after a final decision is rendered in that proceeding, are required to disclose that fact for the official record of the subject proceeding. Disclosures must include the amount of the campaign contribution and identify the recipient Board member and may be made either in writing to the Clerk of the Board prior to the subject hearing or by verbal disclosure at the time of the hearing.

Welcome & Roll Call
Pledge of Allegiance
Corrections or Additions
The Clerk will announce agenda corrections or proposed additions of emergency, urgency, or continued items, which will be acted on by the Board as provided in Section 54954.2 of the California Government Code.

Public Comment on Items on the Consent Calendar and Items Not listed on the Agenda The public may address the Board on the Consent Calendar and any matter within the jurisdiction of the Board but not on the agenda.

CLOSED SESSION

1. Closed session under Government Code 54950 et. seq. relating to the following item Significant Exposure to Litigation – Government Code Section 54956.9(d)(2) Net Energy Metering Program
a.

CONSENT CALENDAR

2. Approve minutes from the February 21, 2024, meeting of the Policy Board of Directors

3. Regulatory and Legislative Quarterly Update

4. Financial report for the period October 1, 2023, through April 30, 2024

5. Investment Performance Report for the period of October 1, 2023, through March 31, 2024

6. FY 2023-24 Mid-Year Budget Forecast Report

7. Adopt Resolution PB-2024-03 to amend the Net Billing Tariff to include Virtual Net Billing and Net Billing Aggregation

8. Adopt Resolution No. PB-2024-04 approving the FY 2024-25 Financial Policies

9. Receive Update on FY 2023-24 Energy Programs

10. Approve FY 2024-25 Underserved Communities Outreach and Engagement Action Plan

11. Appoint Jesus Jason Sedano, Celina Stotler, and Devin Best to serve on the 3CE Community Advisory Council for a three (3) year term

12. Temporarily suspend Article VII, Section 4 of the Operating Rules and Regulations to allow the Executive Committee to consist of up to eight voting members until December 31, 2024

REGULAR AGENDA

13. Community Advisory Council Report

14. CEO Report
a. Bioenergy Market Adjusting Tariff (BioMAT)
b. Resource Adequacy Slice-of-Day Paradigm Implementation c. Expand Plan Your Fleet Opportunities
d. Improved Customer Relationship Management and Energy Program Support e. Enrollment of Atascadero and the County of San Luis Obispo f. Taxpayer Protection Act taken off November ballot by CA Supreme Court g. Internship Program
h. Staffing Update

15. Consider and support 3CE’s proposed behind-the-meter residential battery rebate program

16. Adopt Resolution No. PB-2024-05 approving 3CE's Net Energy Metering (NEM) Tariff, effective July 1, 2024

17. Adopt Resolution No. PB-2024-06 approving the 2025 rate structure methodology

18. a. Approve budget for capital improvements at 3CE's facility located at 1026 Palm Street, San Luis Obispo, and
b. Authorize the Chief Executive Officer to sign contracts with various vendors to implement the capital improvements to 1026 Palm Street, within the total approved budget Board member comments and reports
Adjournment
Policy Board of Directors
February 21, 2024
1:30PM
Central Coast Community Energy
70 Garden Court, Suite 300
Monterey, CA 93940
County of Santa Cruz
701 Ocean Street,
Fifth floor, Redwood Room
Santa Cruz, CA 95060
City of Gonzales
City Hall
147 Fourth Street, Conference Room
Gonzales, CA 93926
City of San Luis Obispo
City Hall
990 Palm Street, Council Chambers San Luis Obispo,
CA 93401
City of Santa Maria
City Hall
110 East Cook Street, Council Chambers Santa
Maria, CA 93454
County of Santa Barbara
County Administration Building
105 E. Anapamu Street, Fourth Floor
Santa Barbara, CA 93101

MINUTES
The meeting was called to order at 1:32 PM with 15 members attending from six noticed locations and a quorum established.

Directors Present:
3CE HQ: Baron, Donaldson, Dutra, Freeman, Newsome, Kosmicki County of Santa Cruz: McPherson, Vice Chair Brooks
City of Gonzales: Rios
City of San Luis Obispo: Guthrie, Hamon, Marx, Ortiz-Legg (arrived at 1:36pm) City of Santa Maria: Patino, Silva, Chair Williams
Directors Absent: Adams, McShane, Richards
Chair opened public comment period on the consent calendar and items not listed on the agenda.

There were no public comments.

Chair closed the public comment period.

CONSENT CALENDAR

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MOTION: Moved by Director Hamon, seconded by Director Cordero to approve without Item 6.

ACTION: The Motion Carried with a roll call vote: 15/0/4 AYES: Baron, Donaldson, Dutra, Freeman, Guthrie, Hamon, Newsome, Kosmicki, Marx, McPherson, Cordero, Rios, Silva, Vice Chair Brooks, Chair Williams NOES: None

Absent: Adams, McShane, Ortiz-Legg, Richards

1. Approved minutes from the September 14, 2023 meeting of the Policy Board of Directors

2. Approved minutes from the December 13, 2023 meeting of the Policy Board of Directors

3. Adopted Resolution PB-2024-01 Setting the Regular Meeting Schedule of the Policy Board

4. Received a Report on 3CE'sInvestment Returns and Diversification

5. Approved 3CE's Load Management Standards ("LMS") Plan and authorize the CEO to submit the LMS Plan to the California Energy Commission ("CEC") with subsequent updates as may be required by the CEC.

7. Received Update on FY 2023-24 Energy Programs

8. Received a Financial Report for the periods October 1, 2023 and December 31, 2023

6. Received Regulatory and Legislative Quarterly Update (pulled by Director Marx).

MOTION: Moved by Director Marx, seconded by Director Cordero to approve with the request that website links be included in the report.

ACTION: The Motion Carried with a roll call vote: 15/0/3/1 AYES: Baron, Donaldson, Dutra, Freeman, Guthrie, Hamon, Newsome, Kosmicki, Marx, McPherson, Cordero, Rios, Silva, Vice Chair Brooks, Chair Williams NOES: None
ABSENT: Adams, McShane, Richards
ABSTAIN: Ortiz-Legg

REGULAR AGENDA

9. CEO Report
a. Staffing update
b. Implementation date for City of Atascadero and County of San Luis Obispo Confirmed
c. Front of the Meter Energy Storage program redesign
d. 3CE review of the Behind-the-Meter Energy Storage focused demand response proposals

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e. Expansion of system reliability pilots - AgFIT
f. Property acquisition
Chair opened public comment period.

There were no public comments.

Chair closed the public comment period.

ACTION: Discussion Item; no action required

10. Received a presentation on the challenges and impacts of the 2025 Compliance Year implementation of the 24-hour Slice of Day Resource Adequacy Paradigm Chair opened public comment period.

There were no public comments.

Chair closed the public comment period.

ACTION: Discussion Item; no action required

11. Adopted Resolution No. PB-2024-02 establishing a 3CE Net Billing Tariff (NBT), with an implementation date of June 1, 2024
Chair opened public comment period.

The following individual(s) addressed the Board.
 Michael Boyd
 Beverly DesChaux
 John Smigelski
Chair closed the public comment period.

MOTION: Moved by Director Ortiz-Legg, seconded by Director Kosmicki to approve.

ACTION: The Motion Carried with a roll call vote: 14/0/5 AYES: Baron, Donaldson, Freeman, Guthrie, Hamon, Newsome, Ortiz-Legg, Kosmicki, Marx, McPherson, Cordero, Rios, Silva, Chair Williams
NOES: None
ABSENT: Adams, Dutra (left at 3:08 PM, McShane, Richards, Vice Chair Brooks

12. Received a Report on Efforts for Setting Rates Beginning FY 2024-25 Chair opened public comment period.

The following individual(s) addressed the Board.
 John Smigelski
Chair closed the public comment period.

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ACTION: Discussion Item; no action required

13. Receive a Presentation 3CE’s FY 2022-23 Audited Financial Statements Chair opened public comment period.

The following individual(s) addressed the Board.
 Beverly DesChaux
Chair closed the public comment period.

ACTION: Discussion Item; no action required

14. Community Advisory Council Report
The following individual(s) addressed the Board.
 Beverly DesChaux
Chair closed the public comment period.

PRESENTATION

15. Received the 2023 Annual Impact Report
Chair opened public comment period.

There were no public comments.

Chair closed the public comment period.

ACTION: Discussion Item; no action required

CLOSED SESSION

16. Closed session under Government Code 54950 et. seq. relating to the following item:
a. Pursuant to Government Code section 54957(b), the Board will confer regarding evaluation of performance for the Chief Executive Officer.

Chair opened public comment period on the closed session item.

There were no public comments.

Chair closed the public comment period.

Counsel announced that no reportable action would be taken.

Recessed into closed session at 3:55PM
Adjourned at 4:35PM

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Staff Report Item 3
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Kalia Mitchell-Silbaugh, Policy Advisor;
Jerri Strickland, Manager of Energy Policy;
Catherine Stedman, Chief Communication Officer
SUBJECT: Regulatory and Legislative Quarterly Update
DATE: June 26, 2023
RECOMMENDATION:

This memorandum provides the Policy Board with a second quarter Regulatory & Legislative Update.

DISCUSSION:

These quarterly updates prepare a summary of key regulatory proceedings and legislative matters impacting 3CE’s customer support, business operations, and climate goals.

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Quarterly Regulatory & Legislative Update
June 26, 2024

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Table of Contents
REGULATORY UPDATE......................................................................................................................................................... 3 Resource Adequacy (RA) - .............................................................................................................................................. 3 Provider of Last Resort (POLR) and Emergency Transition Planning -....................................................... 3 Load Management Standards (LMS) and Real-Time Pricing -......................................................................... 4 Demand Flexibility -........................................................................................................................................................... 4 Preventing Disconnections -.......................................................................................................................................... 5 Bioenergy Market Adjustment Tariff (BioMAT) - ................................................................................................. 6 Integrated Resource Planning (IRP) -........................................................................................................................ 6 Renewables Portfolio Standard -.................................................................................................................................. 7 Interconnections –.............................................................................................................................................................. 8 Energy Resources Recovery Account (ERRA) Compliance ............................................................................... 9 Energy Resources Recovery Account (ERRA) Forecast....................................................................................10 LEGISLATIVE UPDATE........................................................................................................................................................11 3CE June 2024 Report: ...................................................................................................................................................11 Diablo Canyon and Climate Bond: .............................................................................................................................11

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REGULATORY UPDATE
Resource Adequacy (RA) - R.23-10-011
Issue
The Resource Adequacy (RA) program is the California Public Utilities Commission’s (CPUC) main grid reliability planning program. All load serving entities (LSEs) under the CPUC’s jurisdiction, including CCAs, must demonstrate purchase of a specified amount of eligible RA generation capacity each month and year to comply with RA program requirements. Increasing demand for and a decreasing supply of eligible RA capacity over the past five years have resulted in sharply increased prices and unprecedented difficulty procuring sufficient RA to achieve compliance. Over the past year the CPUC has also sought to tie RA compliance to other, unrelated functions such as CCA expansion into new communities.

Status
The CPUC issued a Proposed Decision (PD) on May 17 addressing party proposals for changes to the RA program, including the new slice-of-day (SOD) framework. 3CE supported the development of several proposals submitted by CalCCA, including allowing load-serving entities (LSEs) to transact hourly load obligations within the SOD framework, granting temporary exemptions from RA penalties during the framework's introduction, and postponing the SOD framework's launch to 2026 to ensure its smooth implementation. The PD declines to delay SOD implementation, maintaining that the CPUC will move forward with enforcing SOD for the 2025 RA compliance year despite ample party concerns around continued uncertainties with the program. The PD also denies or fails to acknowledge proposals that would introduce flexibility and support LSE compliance under SOD, including temporary system waivers and the ability for LSEs to trade hourly load obligations to meet compliance requirements.

Next Steps
3CE staff submitted comments on June 6 recommending that the CPUC amend the PD to adopt CalCCA’s proposal for hourly load obligation trading in time for the first SOD compliance year, arguing that this feature is necessary to support LSE compliance, promote affordability for ratepayers by preventing costly procurement, and ensure successful implementation of the SOD framework. 3CE staff will continue to advocate for hourly load obligation trading in advance of the CPUC’s vote on the PD, currently set for June 20. In addition, 3CE is currently working with CalCCA to shape a proposal to address timing issues with the current Central Procurement Entity (CPE) Framework.

Provider of Last Resort (POLR) and Emergency Transition Planning - R.21-03-011 Issue
The Provider of Last Resort (POLR) is the backstop entity that provides electric service to customers of a load serving entity if that LSE fails suddenly. This role has historically been held by the investor-owned utilities (IOUs, namely Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric), but this proceeding is establishing a process to allow CCAs and other non-IOU LSEs to become POLR in their service areas. This proceeding is also considering rules designed to prevent LSE failures that have various implications for 3CE finances and operations. This includes changes to how much money CCAs must post as insurance against their own failure (called the Financial Security Requirement or FSR).

Status
At its April 18 Voting Meeting, the CPUC adopted the POLR Proposed Decision (PD), which incorporated several revisions put forth by CalCCA in opening and reply briefs. As a result of the CPUC’s adoption of the decision, the minimum FSR that 3CE is required to post for SCE will remain at $147k for SCE and will

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increase for PG&E from $147k to $1.71M. The increase will not have a significant financial impact to 3CE. These revisions include reducing Resource Adequacy (RA) costs in the FSR by accounting for returning Central Procurement Entity (CPE) RA allocations, providing CCAs with an additional 60 days to file the first FSR, and requiring CCAs to provide audited financial statements once a year instead of twice to align with existing statutory obligations for CCAs.

Next Steps
3CE Staff is working with CalCCA on an Advice Letter (AL) filing to inform the CPUC’s implementation of financial reporting and clarify details on financial reporting triggers. IOU tariffs implementing the Decision are due on July 22. A schedule for the next phase of the proceeding, which will address the process for non-IOU entities to become a Designated POLR, has not yet been issued.

Load Management Standards (LMS) and Real-Time Pricing - 23-LMS-01 Issue
The California Energy Commission’s (CEC) updated Load Management Standard (LMS) regulations now require IOUs, municipal utilities, and CCAs with load greater than 700 GWh/year to upload time-dependent rates to the CEC’s Market Informed Demand Automation Server (MIDAS) platform, develop an LMS Compliance Plan by March 2024, and present to their governing bodies, for approval by the CEC, at least one hourly marginal cost based rate option (often referred to as a real-time rate) for their customers by 2025.

Status
3CE continues to follow its LMS Plan as adopted by the Policy Board on February 21. Accordingly, 3CE staff ensured that IOU partners had access to relevant information to enable the inclusion of Rate Identification Numbers (RINs) on customer billing statements before April 1, 2024, the milestone set forth in the LMS. In addition, staff has been actively collaborating with stakeholders on the development and design of a statewide tool for authorized rate data access by third parties for submission to the CEC by October 1.

Next Steps
3CE staff is working with CalCCA to advocate for CEC or other non-ratepayer funding for LMS costs related to development of the single statewide tool and to ensure that any necessary cost recovery processes are equitable and transparent.

Demand Flexibility - R.22-07-005
Issue
Launched in 2022, this CPUC proceeding aims to enhance demand flexibility and grid reliability in California, mitigating costs from grid stress. 3CE participates to protect its ratemaking authority, track IOU rate changes, design potential new programs, solve data sharing issues affecting rate design, and prevent cost shifts among customers. Additionally, this proceeding will consider the implementation of AB 205's mandate for an income-graduated fixed charge (IGFC) by July 1, 2024. The goal of the IGFC is to lower energy costs for low-income residents through a fixed monthly charge. Although this charge affects only the delivery side and not 3CE's direct operations, 3CE staff monitor developments to gauge impacts on customer experience.

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Expanded Pilot Program Status
Earlier this year, the CPUC issued a Decision expanding the AgFit pilot to all CCA customers in PG&E’s service territory and extending the pilot to December 31, 2027. AgFit offers agricultural customers assistance with water pumping automation, time-varying rates that incentivize pumping during off-peak hours, and on-bill savings. PG&E submitted its Implementation Advice Letter (AL) regarding the expansion of the AgFit pilots that aligns with the anticipated standards for joint marketing, education, and outreach efforts. After thorough review of PG&E’s AL, 3CE submitted its own AL on May 3 to notify the CPUC of its intent to begin outreach to enroll customers in the PG&E Ag Pilot beginning on June 1, 2024. In response to pilot implementation proposals, the CPUC issued a Ruling seeking additional information on how frequently the IOUs should be able to modify the time-varying rates.

Income Graduated Fixed Charge Status
On May 15, the CPUC approved a Decision implementing an IGFC to be applied as part of the Investor-Owned Utilities' (IOUs) Transmission and Distribution fees on consumer bills, excluding any generation charges. Set to take effect in the third quarter of 2025 for SCE and the first quarter of 2026 for PG&E, the charge is structured across three tiers: approximately $6 monthly for California Alternate Rates for Energy (CARE) program participants, around $12 monthly for Family Electric Rate Assistance (FERA) program participants and low-income individuals in affordable housing, and $24.15 monthly for all other customers. The CPUC designed this approach in line with AB 205, aiming to ensure that customers with lower incomes who have average utility consumption will see a reduction in their bills, even without altering their energy use. The Decision adopted a recommendation put forth in CalCCA’s comments, developed with the support of 3CE staff, directing IOUs to include IGFC tier data in the regular customer data reports provided to CCAs to enable enhanced and consistent customer support.

Next Steps
Since filing its AgFit implementation AL, PG&E has requested and received approval to delay pilot enrollment to November 1, 2024, but will continue ongoing recruitment efforts and marketing, education, and outreach (ME&O) efforts leading up to enrollment. Upon Commission approval of 3CE’s AL, 3CE staff will commence its own customer outreach in coordination with PG&E and will enroll customers in the Pilot as soon as possible. In the meantime, 3CE staff is working with CalCCA to develop comments on the CPUC Ruling advocating for a transparent process for the IOUs to modify and update time-varying rates to ensure adequate stakeholder input and review. Staff will also continue to track IOU implementation and ME&O related to the IGFC.

Preventing Disconnections - R.18-07-005
Issue
In 2020, the CPUC established temporary residential disconnection rate caps for the IOUs, including a

3.5% cap for PG&E and a 4% cap for SCE, set to expire at the end of 2024. Further, in 2021, the CPUC directed the IOUs to allocate payments on outstanding utility bills using a pro-rata method, which splits payments proportionally between utility and CCA charges, through the end of September 2024. The pro-rata method temporarily replaced the current IOU tariff rules, altering the payment process so that past-due bills are first credited to the IOU portion and then to the CCA portion, resulting in CCAs bearing disproportionate impacts from customer payment delays. These temporary measures were implemented in the context of the COVID-19 pandemic, when the IOUs were not disconnecting residential customers.

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Status
On March 22, the CPUC issued a Ruling requesting stakeholder feedback on current IOU disconnection caps and whether the CPUC should extend and/or make permanent the use of the pro-rata payment method past September 2024 in lieu of returning to the waterfall method. 3CE assisted CalCCA in drafting opening and reply comments, filed on April 19 and May 3 respectively, that advocate for permanently maintaining the pro-rata payment method to prevent CCAs from bearing a disproportionate financial risk and allow CCA customers to continue to benefit from CCA initiatives that help struggling customers rather than being returned to the IOU for nonpayment.

Next Steps
Staff is awaiting the release of a Proposed Decision on past-due bill payment allocation and will evaluate it once available to assess its impact to 3CE.

Bioenergy Market Adjustment Tariff (BioMAT) - R.22-10-010 Issue
BioMAT is a procurement program opened in 2015 to encourage the development of small bioenergy projects in California. The program is unique in that it allows load serving entities (LSEs) contracting with these projects to recover the costs from all California electricity users through the Public Purpose Programs (PPP) charge. In 2021, 3CE and other CCAs successfully lobbied legislators to reverse the exclusion of CCAs from BioMAT with the passage of AB 843. AB 843 was the first time CCAs gained access to PPP funding, setting a valuable policy precedent. The CPUC began implementation of AB 843 in October 2022 by opening of a new proceeding to work through the details of CCA participation.

Status
To facilitate CCA participation in the BioMAT program, CalCCA submitted Tier 2 and Tier 3 Advice Letters (ALs) on behalf of CCAs interested in offering the program, including 3CE. On April 30, 2024, the Energy Division (ED) approved the CCAs’ Tier 2 ALs, which included pro-forma program documents and contracts with Accion, the CPUC-designated BioMAT program administrator and website developer. On May 23, the ED released Draft Resolution E-5322 that, if adopted by the Commission, will approve the CCA Tier 3 ALs. These ALs are largely ministerial and indicate that because no CCA has executed a BioMAT contract yet, the CCAs currently have no cost forecast revenue requirements for 2024 and 2025.

Next Steps
The CPUC will vote on Draft Resolution E-5322 on June 20, 2024. Following the conclusion of initial program implementation steps, 3CE will seek approval from the Operations Board to approve the BioMAT program, pro-forma agreements and delegation of authority to the CEO to approve eligible PPAs at the August 14 meeting.

Integrated Resource Planning (IRP) - R.20-05-003
Issue
Integrated Resource Planning (IRP) is the CPUC’s greenhouse gas (GHG) reduction planning program.

LSEs must submit IRPs every two years demonstrating that planned future procurement will produce GHG emissions below an assigned benchmark while contributing to a resource fleet that meets sector-wide GHG targets and maintaining grid reliability. Previous IRP cycles have produced three procurement mandates, which apply to 3CE and other CCAs. On April 18, the CPUC issued an Amended Scoping Memo stating its intent to address additional issues in the IRP proceeding, including implementation of

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Assembly Bill (AB) 1373 which allows the Commission to request that the Department of Water Resources (DWR) serve as a central procurement entity (CPE) for certain long-lead time resources, as well as development of a long term procurement framework entitled the Reliable and Clean Power Procurement Program (RCPPP) that would replace the CPUC’s current ad hoc mandate structure.

Status
On April 26, the CPUC issued a Ruling seeking party comments on the Commission’s approach to implementing AB 1373, stating its intent to determine whether and how much need there is for the use of DWR as the CPE by September 1, 2024, and requesting feedback on timelines, contract structures and review processes, and cost and benefit allocation. The Ruling identifies four types of potential long-lead time resources for DWR centralized procurement, including off-shore wind (OSW), out-of-state wind (OOSW), long duration energy storage (LDES), and geothermal options. 3CE staff worked with CalCCA to submit opening and reply comments on the Ruling, recommending that if the CPUC pursues any central procurement it must focus on emerging technologies, prioritize affordability, and avoid competitive impacts on ongoing LSE procurement activity. CalCCA’s comments recommend that the CPUC limit its consideration to a small amount of OSW as it is the most compatible long-lead time resource under AB 1373 requirements.

Next Steps
A Proposed Decision (PD) on AB 1373 implementation is scheduled for issuance on July 19, 2024. In addition, a staff proposal on the RCPPP design is anticipated for June or July. 3CE staff will remain actively engaged in this proceeding and conduct advocacy around the structure of the RCPPP to promote improved coordination between the RA and IRP programs. The deadline for the next round of individual LSE IRP submissions has been extended by one year to November 1, 2025.

Renewables Portfolio Standard - R.24-01-017
Issue
The CPUC’s Renewables Portfolio Standard (RPS) proceeding monitors compliance by retail sellers, including CCAs, within California’s RPS program which requires that 60% of all electricity retail sales be served by renewable resources by 2030 and at least 65% of the procurement a retail seller counts toward the RPS requirements be from long-term contracts. The CPUC initiated a new rulemaking to continue implementation of the RPS program, including reviewing RPS procurement plans, providing tools for RPS analysis and reporting, assessing RPS compliance, and integrating new legislative mandates into the RPS program.

Status
3CE is a party to the new proceeding and submitted joint comments with 5 other CCAs to request that the end date of the BioMAT program be included as a distinct and expedited issue in the scope of the rulemaking. The Assigned Commissioner issued a Scoping Ruling on May 9 that declines the Joint CCAs’ request in the near-term but states that the Commission may issue an Amended Scoping Memo in early 2025 that considers extending the BioMAT program date. Separately, 3CE staff is actively working with CalCCA to address delays in the receipt of Renewable Energy Credits (RECs) from the Western Renewable Energy Generation Information System (WREGIS) and ensure that regulators are aware of potential impacts of the delays to Power Source Disclosure and RPS compliance deadlines. Due to the delays, 3CE has requested a 60-day extension to distribute its annual Joint Rate Comparison (JRC) mailer to ensure accurate reporting of 3CE’s 2023 generation portfolio contents.

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Next Steps
Staff will continue to monitor the new RPS proceeding to ensure 3CE’s ongoing RPS compliance and progress towards sourcing 100% clean and renewable energy by 2030, 15 years ahead of the state goal. 3CE staff is currently developing its 2024 RPS Procurement Plan, due to the CPUC by July 12. Staff will continue to communicate with regulators regarding REC delays and will remain informed of any corresponding changes to compliance requirements.

Interconnections – R.24-01-018
Issue
The California Energy Commission’s (CEC) 2023 Integrated Energy Policy Report (IEPR) identifies interconnection delays as a significant barrier to achieving California’s electrification and decarbonization goals. Ongoing initiatives led by various entities are working to address this issue and streamline processes for connecting clean resources to the grid. One such effort is CAISO’s 2023 Interconnection Process Enhancements (IPE) initiative, focused on enhancing coordination of resource procurement, interconnection, and transmission planning to achieve state reliability and policy needs. In addition, the CPUC instituted a new rulemaking in January to establish reasonable timelines for customers to receive new service connections and to create procedures for customers to report delays as part of implementing recent statutes.

CAISO Interconnection Process Enhancements Status
CAISO released a final IPE proposal on March 29 that proposes significant modifications to its interconnections study process, including a new scoring criteria that weighs Load Serving Entity (LSE) interest in prospective projects. CAISO also issued and revised an addendum to the proposal to clarify guidelines for LSE scoring processes. The addendum, if adopted, would require LSEs to opt-in to provide scores to interconnection applicants and publicly post their scoring criteria prior to the interconnection application period. The Final Proposal will be voted on at the CAISO Board of Governors Meeting on June 12 and, if passed, filed for approval at the FERC.

Energization Rulemaking Status
On June 6, the CPUC issued a Ruling seeking party input and data related to energization issues such as project timelines, permitting processes, geographical concerns, and suggestions for reporting energization delays to the CPUC. 3CE staff is working with CalCCA to draft comments, due June 18, that identify energization issues specific to 3CE’s customers and service territory.

Next Steps
Distribution planning or implementation failures can delay new customer load interconnection, affecting CCA customers. 3CE will monitor these initiatives, advocate for transparency and efficiency in interconnection and energization processes, and promote accelerated deployment and grid connection of clean energy resources. 3CE staff will continue to collect and report data on energization delays in 3CE’s territory to inform the CPUC’s July issuance of a Proposed Decision on utility energization timeline improvements and procedures for reporting delays. 3CE will also remain informed on the status of the IPE proposal and will assess its interest in and potential approach to participating in the new interconnection scoring process if approved.

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Energy Resources Recovery Account (ERRA) Compliance
Issue
Energy Resource Recovery Account (ERRA) compliance filings are made annually by the Investor Owned Utilities (IOUs) for the approval of costs associated with Utility Owned Generation (UOG) operations and fuel procurement, Portfolio Allocation Balancing Account (PABA) entries, economic dispatch of electric resources, and contract administration. IOUs are required to demonstrate compliance with CPUC decisions and the California Public Utilities Code. All CCAs participate jointly in these proceedings through CalCCA to ensure unbundled customers are treated equitably in IOU rate-setting decisions.

PG&E Status
For PG&E’s 2022 compliance year the commission continues to halt the CCAs, jointly through CalCCA, ability to investigate their practice of following commission requirements for selling available RA. CalCCA planned to file its opening brief in PG&E’s 2022 ERRA Compliance case on May 20, 2024, recommending the Commission reverse its decision to exclude CalCCA evidence from the record and argues that PG&E’s Bundled Procurement Plan(BPP) should be considered in the IRP proceeding. The Commission removed opening and reply briefs from the schedule on May 17, 2024, and has ordered briefs on just the RA scoping issue due June 6, 2024, via email ruling on May 22, 2024. CalCCA used portions of its already-drafted opening brief to comply with the CPUC’s email ruling for filing an opening brief on the RA issue on June 6 and continued to argue for addressing PG&E’s lack of compliance with making reasonable attempts to sell its excess RA in 2022.

SCE Status
Joint CCAs filed a protest to the 2023 ERRA Compliance application filed by SCE on May 2, 2024 through CalCCA. The protest laid out CalCCA’s interest in the case and present issues that require further investigation through discovery, including whether SCE passed on any CAISO penalties to customers (an issue in the 2022 SCE ERRA Compliance case), how SCE is handling delays in RECs from WREGIS for 2023, significant errors related to PCIA contracts, and details on SCE’s internal ERRA/PABA audit.

Next Steps
3CE will continue to advocate for just treatment of unbundled customers and hold the IOUs accountable for following CPUC rules.

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Energy Resources Recovery Account (ERRA) Forecast
Issue
ERRA forecast applications are filed annually by IOUs to look ahead at energy procurement-related revenue requirements, including the allocation of costs across PCIA vintages. CCAs participate through CalCCA to ensure: (1) accuracy of forecast account balances, rates, and cost calculations; (2) proper attribution of PCIA vintage; (3) proposer attribution between bundled and unbundled customers; (4) appropriateness of IOU proposals within the context of an ERRA forecast proceeding.

Consolidated 2024
The schedule for the consolidated Track 2 2024 ERRA Forecast proceeding was extended. The due date for testimony has been moved from May to October. The ALJ Ruling that adjusted the schedule did not acknowledge CalCCA’s Motion for Clarification requesting more information on the decision to direct intervenor testimony rather than concurrent opening testimony. Given the case is dealing with IOU fixed generation costs, CalCCA expected there to be concurrent testimony proposals rather than proposals only from intervenors.
2025 PG&E Status
PG&E filed its 2025 ERRA Forecast Application on May 15, 2024. PG&E’s application included a proposal for adjusting its common cost allocation methodology with respect to RA. PG&E is forecasting high RA prices and proposes to freeze the PCIA RA MPB at 2024 levels if the forecast MPB values continue to increase by the October Update. PG&E’s proposal is unfair to unbundled customers, especially in the context of increased PCIA rates currently included in PG&E’s application. If RA MPB values increase, that would dampen the increases forecasted for PCIA rates.
2025 SCE Status
SCE filed its 2025 ERRA Forecast Application on May 15, 2024. Additionally, SCE filed a 2024 ERRA Trigger Application on May 31, 2024, due to an overcollection in the ERRA and requested to reduce bundled generation rates by up to $724 million. SCE will wait to see how summer month energy prices turn out before implementing rate decreases and requested to reduce rates in October 2024. CalCCA will motion for party status at the pre-hearing conference but has not yet identified significant issues with which to protest.

Next Steps
Intervenor protests to both PG&E and SCE’s ERRA Forecast Applications are due on June 17.

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LEGISLATIVE UPDATE
3CE June 2024 Report:

With more than 2,100 bills introduced in the California Legislature this year.

Bills in the second house have roughly two months (not counting the summer recess from July 3-August 5) to get to the floor- a process condensed by three months for bills moving within their house of origin.

The deadline for bills to make their way to the Governor’s desk is midnight August 31st, followed by a 30-day deadline for Governor Newsom to act upon them. During the past five months of this legislative cycle, the number of bills tracked by CalCCA has fallen from 80 energy related bills (mainly in the areas of affordability, building decarbonization, zero-emission vehicles, and transmission infrastructure improvements) to 55.

After two years of higher than anticipated income tax returns, the state’s multi-billion-dollar surplus has now swung in the other direction with deficit projections of $45 billion. The prevailing focus of the Newsom administration and the legislature has been to create a balanced budget plan since the first projections of a shortfall were made late last year.

In late May, Speaker Rivas and President Pro Tem McGuire announced a Joint Legislative Budget Plan which balances the state budget by reducing programs and delaying and deferring funding. The proposal protects over $3 billion in climate related investments by shifting costs from the General Fund to the Greenhouse Gas Reduction Fund. It rejects cuts to Offshore Wind infrastructure development and partially rejects cuts to the California Energy Commission’s Equitable Building Decarbonization program. 3CE staff has been advised, as of Monday, June 10th, that the joint budget proposal is likely to be adopted by the Governor with minor redlines. Budget and budget trailer bills are expected to be heard and voted on in both houses June 13th through 17th with a Governor signature to follow shortly thereafter. Under Prop 25, legislators will not receive their per diem if the main budget bill isn’t signed by June 15th and will only receive their payment after a budget is passed. For this reason, the legislature may pass a “skeleton budget” to meet the deadline, with additional “junior” budget or trailer bills passed later.

Climate Bond:

The Assembly and Senate are negotiating Climate Bond proposals of up to $10 billion to finance climate resiliency projects. If signed by the Governor, the bond measure would require approval by California voters and appear on the November ballot.

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Staff Report Item 4
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Juan Lopez, Director of Finance
SUBJECT: Financial report for the period October 1, 2023, through April 30, 2024 DATE: June 26, 2024
RECOMMENDATION:

This memorandum provides a financial report for the period October 1, 2023, through April 30, 2024.

SUMMARY:

Over the seven months ending April 30, 2024, operating revenues amounted to $289.5 million, and operating expenses totaled $245.7 million, for a net operating income of $43.8 million. Non-operating revenue added $7.1 million to the total revenue, tallying a positive change in net position of $50.8 million. The favorable net operating income will offset the higher energy costs operations forecasted in the last quarter of the fiscal year.

Year-to-date operating revenue is $29.9 million lower than the budget, primarily due to the seasonal fluctuations in revenues and expenditures. Non-operating revenue is $3.4 million over budget due to favorable interest rates. The total actual versus budget revenue variance is $26.5 million. Revenue is expected to align with the budget as the fiscal year progresses into the summer months.

Year-to-date operating expenditures are lower than the budget by $5.4 million. Energy costs were $3.4 million higher than budget, resulting from higher resource adequacy (RA) capacity purchases than initially estimated. Non-energy operating costs were $8.8 million lower than budget due to less-than-planned costs for staff vacancies, energy incentive programs, and contracted services.

Net position at the end of April 30, 2024, totaled $292.7 million, a $50.8 million increase from the start of the fiscal year. The 21% increase is attributed to growth in prepaid expenses to suppliers ($37.4

Page 19 of 282 ends

million) and asset purchases ($2.2 million, San Luis Obispo satellite office) and a decrease in accrued electricity costs ($11.2 million).

Cash, cash equivalents, and short-term investments totaled $217.5 million, a $37.5 million decrease from the start of the fiscal year. The 15% decrease primarily occurred in April due to a prepayment of RA costs impacting expenditures at the later end of the fiscal year.

FISCAL IMPACT:

There is no financial impact associated with receiving this report.

ATTACHMENT(S):

1. April 30, 2024 Financial Report

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Compiled Financial Statements 1
Compiled Budgetary Comparison Schedule 6
Budget Variance Commentary 9
Financial Dashboard 10
Investment Summary 11
Accounts Receivable Aging Summary 12
Table of Contents

FINANCIAL REPORT
Fiscal Year to Date
As of April 30, 2024

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1 ACCOUNTANTS’ COMPILATION REPORT
Board of Directors
Central Coast Community Energy
Management is responsible for the accompanying financial statements of Central Coast Community Energy (a California Joint Powers Authority) which comprise the statement of net position as of April 30, 2024, 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
May 24, 2024
1101 Fifth Avenue, Suite 200 San Rafael, CA 94901 415 459 1249 mahercpa.com

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Current assets
Cash and cash equivalents - unrestricted 171,841,962$
Accounts receivable, net of allowance 29,782,166
Accrued revenue 25,797,310
Other receivables 1,532,740
Loan receivable 94,915
Prepaid expenses 68,031,476
Deposits 18,864,013
Cash - restricted 294,000
Investments 45,689,008
Total current assets 361,927,590
Noncurrent assets
Deposits 23,182
Loan receivable 1,425,882
Lease asset, net of amortization 1,230,677
Land 898,658
Capital assets, net of depreciation and amortization 1,886,249 Total noncurrent assets 5,464,648
Total assets 367,392,238
Current liabilities
Accrued cost of electricity 37,936,280
Accounts payable 1,474,966
Other accrued liabilities 1,426,910
User taxes and energy surcharges due to other governments 1,619,324 Lease liability 314,742
Total current liabilities 42,772,222
Noncurrent liabilities
Security deposits - energy suppliers 30,931,720
Lease liability 980,135
Total noncurrent liabilities 31,911,855
Total liabilities 74,684,077
Net investment in capital assets 2,720,707
Restricted for security collateral 294,000
Unrestricted 289,693,454
Total net position 292,708,161$

NET POSITION
As of April 30, 2024

STATEMENT OF NET POSITION

CENTRAL COAST COMMUNITY ENERGY
ASSETS

LIABILITIES

Page 23 of 282 ends

OPERATING REVENUES
Electricity sales, net 289,436,175$
Other income 68,189
Total operating revenues 289,504,364

OPERATING EXPENSES
Cost of electricity 229,638,576
Contract services 6,450,290
Staff compensation 4,271,991
Other operating expenses 966,913
Program incentives 4,060,611
Depreciation and amortization 335,019
Total operating expenses 245,723,400
Operating income (loss) 43,780,964

NONOPERATING REVENUES (EXPENSES)
Interest and investment returns 7,098,425
Interest and financing costs (42,553)
Nonoperating revenues (expenses) 7,055,872
CHANGE IN NET POSITION 50,836,836
Net position at beginning of period 241,871,325
Net position at end of period 292,708,161$
Seven Months Ended April 30, 2024

AND CHANGES IN NET POSITION

STATEMENT OF REVENUES, EXPENSES

CENTRAL COAST COMMUNITY ENERGY

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CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 296,790,577$
Other operating receipts 67,489
Receipts of deposits and collateral 10,499,972
Payments to suppliers for electricity (305,085,573)
Payments of deposits and collateral (22,195,451)
Payments for other goods and services (7,868,601)
Payments for program incentives (4,747,419)
Payments of staff compensation (4,163,665)
Payments of taxes and energy surcharges to other governments (5,440,898) Net cash provided by operating activities (42,143,569)

CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES
Interest and related expense payments (5,944)
Net cash provided by non-capital financing activities (5,944)

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Payments of lease liability (209,105)
Payments to acquire capital assets (2,348,660)
Net cash provided (used) by capital and related financing activities (2,557,765)

CASH FLOWS FROM INVESTING ACTIVITIES
Investment income received 6,345,909
Proceeds from investment sales 84,227,548
Principal payments received of loan receivable 187,201
Purchase of investments (69,951,287)
Net cash provided (used) by investing activities 20,809,371 Net change in cash and cash equivalents (23,897,907)
Cash and cash equivalents at beginning of year 196,033,869 Cash and cash equivalents at end of period 172,135,962$ Reconciliation to the Statement of Net Position
Cash and cash equivalents - unrestricted 171,841,962$
Cash - restricted 294,000
Cash and cash equivalents 172,135,962$
Seven Months Ended April 30, 2024

STATEMENT OF CASH FLOWS

CENTRAL COAST COMMUNITY ENERGY

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Operating income (loss) 43,780,964$
Adjustments to reconcile operating income (loss) to net cash provided by operating activities
Depreciation and amortization expense 335,019
(Increase) decrease in:

Accounts receivable, net of allowance 2,977,109
Accrued revenue (932,205)
Other receivables 2,773,637
Prepaid expenses (67,651,265)
Deposits (12,369,919)
Increase (decrease) in:

Accrued cost of electricity (10,986,196)
Accounts payable (1,295,859)
Other accrued liabilities 685,109
User taxes and energy surcharges due to other governments (134,403) Security deposits - energy suppliers 674,440
Net cash provided by operating activities (42,143,569)$

CENTRAL COAST COMMUNITY ENERGY
STATEMENT OF CASH FLOWS (continued)
Seven Months Ended April 30, 2024

RECONCILIATION OF OPERATING INCOME (LOSS) TO NET

CASH PROVIDED BY OPERATING ACTIVITIES

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1 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 periods ended April 30, 2024, 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.

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

Maher Accountancy
San Rafael, CA
May 24, 2024
1101 Fifth Avenue, Suite 200 San Rafael, CA 94901 415 459 1249 mahercpa.com

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Actual Budget $ Variance
%
Variance Actual Budget $ Variance
%
Variance
Annual
Budget
Annual Budget
Less Actual
YTD

REVENUES AND OTHER SOURCES
Electricity sales $ 41,094,595 $ 47,337,000 $ (6,242,405) -13% $ 293,338,736 $ 323,731,000 $ (30,392,264) 91% $ 563,933,447 $ 270,594,711 Uncollectible accounts (546,558) (625,000) 78,442 -13% (3,902,561) (4,375,000) 472,439 89% (7,500,000) (3,597,439) Electricity sales, net 40,548,037 46,712,000 (6,163,963) -13% 289,436,175 319,356,000 (29,919,825) 91% 556,433,447 266,997,272 Investment and miscellaneous income 984,077 533,000 451,077 85% 7,166,614 3,733,000 3,433,614 192% 6,400,000 (766,614) Total revenues and other sources 41,532,114 47,245,000 (5,712,886) -12% 296,602,789 323,089,000 (26,486,211) 92% 562,833,447 266,230,658 EXPENDITURES AND OTHER USESCurrent Expenditures Cost of energy 35,793,007 42,010,000 6,216,993 15% 229,918,432 226,496,000 3,422,432 102% 520,297,514 290,379,082 Salaries and benefits 615,244 795,000 179,756 23% 4,271,991 5,563,000 (1,291,009) 77% 9,537,076 5,265,085 Services and supplies 2,000,503 2,750,000 749,497 27% 11,748,028 19,249,000 (7,500,972) 61% 32,998,857 21,250,829 Total current expenditures 38,408,754 45,555,000 7,146,246 16% 245,938,451 251,308,000 (5,369,549) 98% 562,833,447 316,894,996 Surplus (deficit) 3,123,360$ 1,690,000$ 1,433,360$ 85% 50,664,338$ 71,781,000$ (21,116,662)$ -29% -$ (50,664,338)$ Annual

CENTRAL COAST COMMUNITY ENERGY

BUDGETARY COMPARISON SCHEDULE
Current Month and Seven Months Ended April 30, 2024
Current Month
Variance fav. (unfav.)
Year-To-Date
Variance fav. (unfav.)

Page 28 of 282 ends

Budget Item YTD Variance Comment
Electric Sales Revenue (9.4%) 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 2.2% 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. Cost of energy includes scheduling coordinator fees for budget purposes only.

Staffing (23.2%) Staffing expenses are under budget due to the timing of new hires.

Professional Services (61.9%) This category includes accounting, IT, technical and other consultants.

Legal Costs (15.4%) This category includes outside legal costs for regulatory and energy procurement needs.

Marketing and customer enrollment (41.0%) Variance is mostly due to the lower than anticipated costs of recent customer enrollments.

Data Management Services 0.7% These fees non-discretionary and are charged on a per customer basis.

Utility Service Fees (3.8%) These are PG&E and SCE fees charged on a per customer basis.

Other General & Administrative (46.2%) This category includes occupancy costs, industry membership dues, and other general and administrative costs.

Energy and Related Programs (49.7%) Programs expenses have generally been delayed until future periods Budget Commentary for significant items

CENTRAL COAST COMMUNITY ENERGY
October 1, 2023 through April 30, 2024

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11.7%

10.1%
Act
Bud
$59.5
$92.9
$36.1
$0.0
$20.0
$40.0
$60.0
$80.0
$100.0
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
Actual
Budget
$289.4
$319.4
$556.4
$0.0
$100.0
$200.0
$300.0
$400.0
$500.0
$600.0
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) 416 393 409 406 358 366 356
Budget 452 459 444 420 402 416 419 383 386 405 423 427
0 50
100
150
200
250
300
350
400
450
500

CUSTOMERS

SALES VOLUME
356 GWh

STD MARGIN
$4.8M (12%)
Δ in NET ASSETS
$3.1M
Cumulative YTD Electricity Sales
Cumulative YTD Direct Margin
(Electricity Sales less Cost of Energy)
Data Definitions:

CUSTOMERS: Count of active customers from Calpine.

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

REVENUE: Total Operating Revenue, net of uncollectible, (excludes 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 FY23/24 budget
Monthly Sales Volume (GWh)
Financial Dashboard: April 2024

CUSTOMERS
457,000
ACTIVE
April revenue of $41.5M accounts for 356
GWh in net retail consumption, 63 GWh
below budget.

YTD Electricity revenue is $289M compared
to budget of $319M. YTD Direct Margin
(defined as Electricity Sales less Cost of
Energy) of $54.8M is below budget by
$33.4M.

The chart to the right shows volume
comparison to budgeted volume.

The charts below display cumulative
revenue and margin $ vs budget.
37%
48%
15%
40%
47%
13%
Res
Com
Ag
YTD Month Revenue $41.5
C.O.E. $35.8
OpEx $2.6
Net Income $3.1
$4.8
$4.7
Act
Bud
Margin $
10 42%
45%
13%
44%
45%
11%
Res
Com
Ag
YTD Month

REVENUE
$41.5M
Margin %

Page 30 of 282 ends

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 127,068,814$ 109,380,169$ 100,067,132$ 99,091,003$ 93,511,093$ 94,499,949$ 51,404,555$ Gains/Losses/Interest 2,190,406$ 382,898$ 328,802.57 339,891.42 331,259.57 297,736.65 331,138.61 178,678.60 Average APY 3.62% 3.61% 4.08% 4.01% 3.82% 4.20% 4.17%INVESTMENTSRiver City Bank - Treasury-indexed productsFunds Invested - Average Balance 40,000,000$ 50,000,000$ 40,000,000$ 40,000,000$ 30,000,000$ 30,000,000$ 20,000,000$ Gains/Losses/Interest 1,246,752$ 178,385.54 213,485.85 236,035.13 205,868.28 193,103.80 116,602.81 103,270.38 Average APY 5.35% 5.12% 7.08% 6.18% 7.72% 4.66% 6.20%RBC GAM / Principal Financal/ Schwab/ Chase/FidelityFunds Invested - Average Balance 89,306,054$ 94,745,123$ 110,223,316$ 115,699,944$ 136,141,272$ 136,685,421$ 137,191,998$ Gains/Losses/Interest 3,268,206$ 375,490.63 434,211.19 478,991.16 480,276.43 442,147.15 545,490.84 511,599.06 Average APY 5.05% 5.50% 5.21% 4.98% 3.90% 4.79% 4.47%

CENTRAL COAST COMMUNITY ENERGY
Investment Summary
October 1, 2023 through April 30, 2024

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Current 0 - 30 Days 31 - 60 Days 61 - 90 Days > 91 Days A/R Balance 17,025,581$ 10,838,095$ 2,234,588$ 722,657$ (1,038,755)$ 29,782,166$

CENTRAL COAST COMMUNITY ENERGY
Summary of Accounts Receivable, Net of Bad Debt Allowance As of April 30, 2024

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Staff Report Item 5
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Juan Lopez, Director of Finance
SUBJECT: Investment Performance Report for the period of October 1, 2023, through March 31, 2024
DATE: June 26, 2024
RECOMMENDATION:

This memorandum provides the investment performance report for the period of October 1, 2023, through March 31, 2024.

BACKGROUND:

In response to the bank failures and bankruptcies that affected mid-size financial institutions in early 2023, staff took guidance from the Audit and Finance Committee (“Committee”) to add operating and investment diversification to mitigate the risk of holding assets in a few concentrated financial institutions. On February 21, 2024, the Committee received a presentation on 3CE’s investment performance and diversification efforts, including opening new operating and brokerage accounts. The Committee will receive quarterly updates on investment performance and liquidity balances, with a recent presentation on this quarter’s results on May 29, 2024.

DISCUSSION/ANALYSIS:

The Finance Department continues its efforts to right-size 3CE’s portfolio. The strategy consists of holding three different “classes” of funds: cash to meet ongoing operating costs, liquidity reserves to meet collateral calls and unforeseen costs, and short-term investments to meet reserves. As of March 31, 2024, which marks the six-month point of FY 2023-24, 3CE maintained $268.5 million in cash, cash equivalents, and short-term investments across its operating and investment accounts. The table below lists the balances by account type.

Page 33 of 282 ends

Account
Type
Institution Balance Investment Mix
Operating
River City Bank $ 131,840,561
Cash (sweep) - $92.6M
CDs - $30.0M
Money Market - $4.3M
cash (operating) - $5.0M
Chase 51,488,755 cash (held for collaterals)
Investment
Royal Bank of Canada 34,571,489 Treasuries - $34.6M
Schwab 50,573,490 Treasuries - $50.5M
cash (sweep) - $0.1M
Fidelity 50 Money Market
Total $ 268,474,345
The investment strategy is passive, where fixed-income holdings such as Treasury notes and bills are held to maturity, and 3CE receives the coupon income and discount. As of March 31, 2024, the Royal Bank of Canada (RBC) managed $34.6 million of 3CE’s investments, while 3CE served as investment manager of the $50.6 million held in the Schwab and Fidelity brokerage accounts. As of the writing of this report, 3CE ended external treasury management services with RBC and is self-managing all investments.
3CE’s investment mix aligns with the Investment Policy and California Government Code. As of March 31, 2024, 3CE held $149.1 million in cash and cash equivalents, $85.0 million in U.S. Treasuries, $30.0 million in certificates of deposit, and $4.3 million in money market funds. Aside from money market funds, all other investment types do not have state investment limits. State code limits money market funds to 20% of the portfolio, and 3CE’s money market funds were at about 2%. All holdings managed by RBC and 3CE were high-grade rated investments or higher.

Cash and Investment Holdings
Type Market Value % of Portfolio Permitted by CA Government Code Cash $ 149,143,401 56% 100%
Money Market Funds 4,293,484 2% 20%
CDs 30,000,000 11% 100%
U.S. Treasuries 85,037,460 32% 100%
Total $ 268,474,345 100%
The FY 2023-24 Adopted Budget, with appropriations of $562.8 million, included estimated investment revenues of $6.4 million. The first two quarters of FY 2023-24 netted investment earnings of $5.9 million, $2.0 million from interest on cash and money market accounts, and $3.9 million from short-Page 34 of 282 term investments. 3CE anticipates seeing similar investment earnings in the remaining quarters as long as the federal funds target rate remains consistent over the coming months. The FY 2023-24 Mid-Year Budget Forecast estimates investment income of $10.0 million, $3.6 million or 55% higher than budget.

FISCAL IMPACT:

There is no fiscal impact to receiving this report.

CONCLUSION:
3CE proactively diversified its financial institutional partners while putting cash and short-term investments to work to take advantage of a continued high-interest environment while retaining cash for ongoing operating costs and collateral calls.

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Staff Report Item 6
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Juan Lopez, Director of Finance
SUBJECT: FY 2023-24 Mid-Year Budget Forecast Report
DATE: June 26, 2024
RECOMMENDATION:

This memorandum provides the Fiscal Year 2023-24 Mid-Year Budget Forecast.

BACKGROUND:

At its regular meeting on September 14, 2023, the Policy Board approved the 3CE FY 2023-24 Budget.

The budget of $562.8 million, matched by $562.8 million in revenue, was a 27.0% increase from the prior year, predominantly due to the higher cost of energy (“COE”). Project delays, whole market volatility, and resource adequacy (“RA”) were the main drivers for the increased COE. The budget did not contain additions to reserves to maintain rates as low as possible for customers. The Budget did include two Pacific Gas & Electric (“PG&E”) service area cost-based rate adjustments that took effect on October 1, 2023, and January 1, 2024, to sustain the growing operating costs.

DISCUSSION/ANALYSIS:

The Mid-Year Budget Forecast estimates expenditures of $574.1 million, an increase of $11.3 million, or

2.0% over budget. Operating expenditures can be classified into two categories: energy and non-energy costs. Non-energy operating expenditures are projected at $35.6 million, compared to a budget of $42.5 million, a 16.2% variation. The lower costs are attributed to staffing vacancies, lower-than-expected professional services, and energy program incentive payments.

The COE expenditure is projected to be $548.4 million, compared to a budget of $530.8 million, an increase of 3.3%. The variance is largely attributed to an estimated $17.4 million increase in RA costs. As was reported at the September 14, 2023, Policy Board meeting, RA is a significant cost driver to COE costs, making up 30.6% of the projected COE. Regulatory changes exacerbated RA supply by limiting the

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RA value assigned to renewables, adding a delivery component on imported RA, and increasing supply obligations. 3CE continues to deploy strategies toward RA compliance, including leveraging our Power Purchase agreements to maximize RA value and layering short and long-term contracts to hedge against price volatility.

The revenue forecast of $561.4 million is a $1.4 million, or 0.3%, negative variance compared to the budget of $562.8 million. Revenue from the sale of electricity is projected at $551.4 million, coming $5.0 million under budget, or 0.9%. Lower-than-anticipated customer load and lower Southern California Edison (“SCE”) rates in January 2024 are the reasons for the lower revenues. The total load for the year is forecasted to be 70,600 MWh lower than budget, a 1.4% variance. Other income, primarily comprised of investment revenue, is estimated at $10.0 million, or $3.6 million higher than budget. 3CE continues to monitor its liquidity to meet its reserve targets set in the Financial Policies. The reserves comprise the strategic reserve, the energy rate stabilization reserve, and the renewable energy innovation and initiatives reserve. Per the current budget, the reserve level targets are $270.8 million.

Considering these targets through unreserved cash and short-term investment balances and excluding funds for monthly operating costs and collateral holds from suppliers, 3CE reserves are $187.7 million.

Based on the forecast, the reserve targets will not see an increase at year-end. Looking ahead for the upcoming fiscal year, 3CE will recommend reserve additions through the rate setting and budget process to increase reserve levels to meet the cost increases driven by the COE.

FISCAL IMPACT:

The Mid-Year Forecast estimates total revenue of $561.5 million, a 0.3% negative variance from budget, and $574.1 million in total expenditures, a 2% higher-than-budget variance, resulting in a net position decrease of $12.7 million. Because the Forecast is a mid-year estimation, unforeseen variables could decrease or increase the net operating results in the coming months. These variables could include energy market volatility, especially in the summer months, lower or higher-than-estimated RA expenditures, and unforeseen regulatory compliance impacts.

CONCLUSION:

The Mid-Year Budget Forecast indicates minor variances in expenditures and revenues, but overall, FY 2023-24 is projected to be a strong year for 3CE while facing policy and market volatility. 3CE is concluding a cost-of-service analysis and completing the rate design for upcoming years, ensuring that 3CE will continue to have fiscal stability beyond the current fiscal year, including the growth of robust reserves. The Operations Board and Audit and Finance Committee received the Mid-Year Budget Forecast at their regular meetings on May 8, 2024, and May 29, 2024, respectively.

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Staff Report Item 7
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Mary Federico, Senior Billing Operations and Rates Analyst SUBJECT: Adopt Resolution PB-2024-03 Amending the Net Billing Tariff to include Virtual Net Billing and Net Billing Aggregation
DATE: June 26, 2024
RECOMMENDATION:

Adopt Resolution PB-2024-03 amending the Net Billing Tariff to include Virtual Net Billing and Net Billing Aggregation, with an implementation date of July 1, 2025.

BACKGROUND:

At its February 21, 2024 regular meeting, the 3CE Policy Board adopted 3CE’s Net Billing Tariff (NBT) with an implementation date June 1, 2024. NBT, the Board will recall, is the latest Net Energy Metering (NEM) tariff, became eligible statewide for all NEM applications received after April 15, 2023, except for Virtual Net Energy Metering (VNEM) and Net Energy Metering Aggregation (NEMA) which remain deferred, pending a further CPUC decision.

The VNEM and NEMA tariffs sunset on February 15, 2024. Due to delays in investor-owned utilities’ (IOUs) billing and system upgrades, Virtual Net Billing, and Net Billing Aggregation customers are currently being served on the legacy NEM tariffs. At the writing of this report, no decision on the request has been published. SCE and PG&E are scheduled to begin transitioning qualifying virtual and aggregator accounts on March 30, 2025, and June 30, 2025, respectively.

DISCUSSION/ANALYSIS:
3CE staff examined the aspects of the IOU Virtual Net Metering and Net Metering Aggregator tariffs that are unique from the previous Virtual Net Energy Metering (VNEM) tariff, Net Energy Metering Aggregation (NEMA) tariff, and the current 3CE NBT to determine what aspects best align with the goals of 3CE.

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VNEM is designed to serve customers with an on-site generating facility with a separate meter from the multiple individually metered accounts that share the same site. The individually metered accounts benefit from the generation exported to the grid on their monthly bill. This tariff is designed for renters and multi-family dwellings, allowing them to benefit from an on-site generation that the traditional NEM tariff does not allow.

NEMA is designed to serve customers with a generating facility metered separately from meters on adjacent and contiguous sites. The meters adjacent to the generating site benefit from the generation exported to the grid on their monthly bill.

VNEM and NEMA tariffs are different from all other NEM tariffs in that they allocate exported kilowatt hours (kWh) to benefiting meters instead of utilizing on-site consumption of the generation behind the meter.

Proposed Enrollment Timeline
3CE Virtual Net Billing and Net Billing Aggregation transition will begin July 1, 2025, to maintain consistency for all qualifying 3CE customers. Should the investor-owned utility implementation dates be delayed, 3CE may need to delay implementation in kind to align all customers to the same implementation timeline.

FISCAL IMPACT:

The fiscal impact of the transition of VNEM and NEMA customers to Virtual Net Billing and Net Billing Aggregation is uncertain to calculate but is expected to have an overall long-term positive fiscal impact, reducing the NEM subsidy and 3CE costs.

CONCLUSION:

The Board’s approval of the amendment to the 3CE NBT will further 3CE’s ability to encourage battery storage adoption and enable demand response, load shifting, and peak shaving opportunities.

ATTACHMENTS:

1. Draft Resolution No. PB-2024-03 Amendment of the Net Billing Tariff

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DRAFT RESOLUTION NO. PB-2024-03

A RESOLUTION OF THE CENTRAL COAST COMMUNITY ENERGY POLICY BOARD OF

DIRECTORS AMENDING THE NET BILLING TARIFF TO INCLUDE VIRTUAL NET BILLING AND NET BILLING AGGREGATION.

WHEREAS, Central Coast Community Energy (3CE) is a Joint Powers Authority (JPA) established and operated pursuant to California Government Code sections 6500 et seq. to study, promote, develop, conduct, operate, and manage energy programs in the California Central Coast region of Santa Cruz, Monterey, San Benito, Santa Barbara Counties, and San Luis Obispo County; WHEREAS, on December 15, 2022, the California Public Utilities Commission (CPUC) issued a decision reducing overall compensation for rooftop solar for new solar customers, increased the economic payback for battery storage, and provided added compensation for low-income customers (“NEM 3.0 Decision”);
WHEREAS, on February 21, 2024, the 3CE Policy Board of Directors adopted the 3CE Net Billing Tariff with an implementation date of June 1, 2024;
WHEREAS, on November 16, 2023 the CPUC issued a decision revisiting Net Energy Metering (NEM) Tariffs and addressing other NEM issues. This decision directed the IOUs to establish successor tariffs for Virtual Net Energy Metering and Net Energy Metering Aggregation; WHEREAS, 3CE staff examined the IOU successor tariffs and evaluated the aspects that were unique from the previous Virtual Net Energy Metering (VNEM) tariff, Net Energy Metering Aggregation (NEMA) tariff, and the current 3CE NBT to determine what aspects best align with the goals of 3CE; and
WHEREAS, 3CE proposes implementing Virtual Net Billing and Net Billing Aggregation for qualifying customers in SCE and PG&E territories effective July 2025. 3CE may need to delay implementation in kind to align all customers to the same implementation timeline should the PG&E or SCE implementation date be delayed.

NOW, THEREFORE, THE CENTRAL COAST COMMUNITY ENERGY POLICY BOARD OF DIRECTORS DOES HEREBY RESOLVE, DETERMINE, AND ORDER AS FOLLOWS:

1. The Policy Board hereby adopts:
a. Amendment to 3CE’s Net Billing Tariff attached hereto as Attachment B.

PASSED AND ADOPTED this 26th Day of June 2024, by the following vote:

AYES:

NOES:

ABSENT:
__________________________________

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Chair, Das Williams
Attest:
__________________________________
Board Clerk, Heather Vowell

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ATTACHMENT A
Net Billing Tariff (NBT) (redlined)
Last Updated and Effective: July 1, 2024
APPLICABILITY:

The Net Billing Tariff (NBT) Schedule, also known as Solar Billing Plan (SBP), is applicable to the generation portion of the customer’s electric utility bill for Central Coast Community Energy (3CE) customers who meet the following criteria:
 The customer is operating a Renewable Electrical Generating Facility (REGF) as defined by PG&E and SCE’s Net Billing Tariff. 1
 Submitted an interconnection application to PG&E or SCE on or after the Sunset Date of the NEM 2.0, Virtual Net Energy Metering (VNEM), and Net Energy Metering Aggregation (NEMA) tariffs; or
 Legacy Net Energy Metering (NEM) 1.0, NEM 2.0, or VNEM customers whose Legacy Period has ended.

Beginning April 15, 2023, customers meeting the above criteria will be interconnected under NBT but temporarily billed for generation under NEM 1.0 and NEM 2.0 until the scheduled 3CE transition date.
3CE customers may voluntarily elect to transition to the 3CE NBT from NEM 1.0 or NEM 2.0 ahead of the end of their Legacy Period. Once transitioned, either voluntarily or at the end of their Legacy Period, the customer may not return to NEM 1.0, NEM

2.0, or VNEM service.

RATES:

Customers’ import charges for electricity consumed on site will be charged by applying the 3CE rates adopted by the 3CE Policy Board2 according to their Otherwise Applicable Tariff (OAT) or Otherwise Applicable Metered Rate Schedule (OAS), the eligible Time-of-Use (TOU) rate code provided to 3CE by the incumbent Investor-Owned Utilities (IOUs).

1 SCE Net Billing Tariff and PG&E Net Billing Tariff (NBT) Service available at:
https://www.sce.com/regulatory/tariff-books/rates-pricing-choices/other-rates and https://www.pge.com/tariffs/index.page.
2 See current 3CE rates at: https://3cenergy.org/billing/

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All NBT customers’ export credits for electricity exported to the grid will be credited by applying the Energy Export Credit (EEC) hourly rates3 adopted by the 3CE Policy Board.4
BILLING:

A. Import Charges
Monthly generation-related import charges will be calculated by multiplying the total electricity consumption for the TOU and billing period, measured by the import channel in kWh, by the applicable generation rate ($/kWh) as determined by the OAT or OAS.

See Special Conditions Section (D) and (E) for specific terms for Virtual Net Billing and Net Billing Aggregation accounts, respectively.

B. Export Credits
Monthly generation-related export credits will be calculated by multiplying the hourly interval generation exported to the grid for the billing period, measured by the export channel in kWh, by the corresponding hourly interval EEC rates. The EEC rates are adopted by the 3CE Policy Board and based on the Avoided Cost Calculator (ACC)5 adopted by the California Public Utilities Commission (CPUC) and effective January 1 of each year.

Monthly generation-related export credits, post calculation, will offset any generation-related 3CE import charges in the same bill period or generation-related 3CE import charges within the same Relevant Period as defined below in Special Conditions Section (A). Generation-related 3CE export credits may not offset applicable taxes or IOU Transmission and Distribution (T&D) charges. See Special Conditions Section (D) and (E) for specific terms for Virtual Net Billing and Net Billing Aggregation accounts, respectively.

C.Low Income EEC Adder
3CE NBT customers with permission to operate NBT start dates from the 3CE NBT implementation start date to December 31, 2027 and enrolled in the California Alternate Rates for Energy (CARE) program and/or Family Electric Rate Assistance (FERA) program will receive a flat $/kWh adder6to their EEC for a period of nine (9) years from their NBT start date. The 3CE Low Income EEC Adder will present as a separate line item on the customers’ bill. Any banked Low Income EEC Adder amounts

3 Current 3CE EEC is available at: https://3cenergy.org/billing/solarbillingplan 4 Board agendas may be found at: https://3cenergy.org/meetings-agendas/. 5 Avoided Cost Calculator may be found at: https://www.cpuc.ca.gov/industries-and-topics/electrical-energy/demand-side-management/energy-efficiency/idsm. 6 More information on the 3CE Low Income EEC adder is at: https://3cenergy.org/billing/solarbillingplan

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will not be subject to the balance reset during the Annual True-Up Process and will roll over to the next Relevant Period.

D.Monthly Billing
Aggregated 3CE import consumption charges and export generation credits will appear on the monthly statement received from the IOU. When the total 3CE import charges exceed the total 3CE export credits, the monthly statement will reflect a charge to the customer. Conversely, when the total 3CE export credits exceed the 3CE import charges, the excess credits will be banked, and the customer will receive a monthly statement with no energy charges for that month. Banked credit amounts will apply to future monthly charges and may be seen on subsequent monthly statements until fully used to offset 3CE charges or a true-up occurs.

E. Annual True-Up Process
At the end of the Relevant Period, the following steps will be performed by 3CE for NBT accounts:

1. Meter readings from the import and export channels during the Relevant Period are aggregated. If the export generation total exceeds the import consumption total, the aggregated total is multiplied by the Average Retail Export Compensation Rate ($/kWh).7 The resulting product is the Energy Export Credit Adjustment. If the import total equals or exceeds the export total, then the Energy Export Credit Adjustment is $0.

2. If there are remaining banked EEC amounts, these are first used to offset any applicable Energy Export Credit Adjustment. Next, all 3CE energy charges are summed and aggregated with all used EEC amounts. If the result is positive, any remaining banked EEC amounts offset the amount. The balance is reset to zero if any banked EEC amounts remain after the above process. Low Income EEC Adder amounts are not subject to the balance reset and will roll over to the next Relevant Period until used for 3CE charges or paid out when the account is returned to bundled service or terminated.

3. Net Surplus Compensation (NSC) is then calculated if the aggregated total of the import and export meter channels for the Relevant Period results in excess generation. NSC is calculated by multiplying the aggregated total by the 3CE NSC rate.8 Should any Energy Export Credit Adjustment amounts remain at the end of the process described in Section E.2 above, it will be netted with the NSC. If the resulting NSC amount exceeds the applicable thresholds (residential=$200; non-residential=$500), the amount is delivered on the true-up statement as a bill credit. If the NSC amount is less than the applicable thresholds, then the amount is carried over to the next Relevant Period. NSC

7 The 3CE Average Retail Export Compensation Rate can be found at:
https://3cenergy.org/billing/solarbillingplan
8 Current 3CE NSC rates can be found at: https://3cenergy.org/billing/nem/

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amounts are never reset and may be seen on subsequent monthly statements until used for 3CE charges or the combination of multiple NSC amounts exceeds the threshold on a subsequent true-up. NSC amounts above the threshold may be requested to be delivered by check within 45 days of the true-up statement appearing on the bill. See Special Conditions Section (D) and (E) for specific terms for Virtual Net Billing and Net Billing Aggregation accounts, respectively.

SPECIAL CONDITIONS:

A. Relevant Period
3CE defines the Relevant Period as all billing periods occurring in the 12 months, from the start of the customer's January meter read to the end of the December meter read.

B. Legacy Period
Legacy Period is defined as the time period that a NEM 1.0 or NEM 2.0 customer is grandfathered into their current NEM program. This period is defined as twenty (20) years from the original PTO date of the RGEF. Legacy Periods are tracked and communicated to 3CE by the customer’s incumbent IOU.

C.Sunset Date
3CE defines the sunset date as April 15, 2023, for all NEM tariffs, with the exception of VNEM and NEMA. VNEM and NEMA have a sunset date of February 15, 2024.

D.Virtual Net Billing
Residential virtual net billing customers will have the generation and consumption from the generating and benefiting accounts netted on a 15-minute interval basis. If the 15- minute interval shows total net consumption, it will be charged at the 3CE import rate.

If the 15-minute interval shows a total net generation, it will be credited at the 3CE export rate.

Non-residential virtual net billing customers will be billed imports and exports according to Billing Sections (A) and (B) above.

NSC qualification for virtual net billing customers will be individually determined for each benefitting account and applied according to the process detailed in Billing Section (E.3) above.

E. Net Billing Aggregation
Net billing aggregation accounts will have import charges for the benefiting accounts calculated as described in Billing Section (A) above. The export credits from the generating site will be calculated using the hourly 3CE EEC rates and allocated to the benefiting accounts. The import charges and allocated export credits will be netted accordingly, as described in Billing Section (B) above.

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NSC qualification for net billing aggregation customers will be individually determined for each benefitting account and applied according to the process detailed in the Billing Section (E.3) above.

F. Return to Bundled Service
3CE NBT customers may voluntarily opt out of 3CE service at any time. A true-up of the current Relevant Period will occur on their last monthly statement with 3CE. The true-up will be processed according to the process detailed in Billing Section (E), with the noted exception that NSC thresholds do not apply to customers returning to bundled service.

G.Account Termination
3CE NBT customers that terminate their NBT account with the IOU are trued-up for the current Relevant Period on their last monthly statement. The true-up will be processed according to the process detailed in Billing Section (E), with the noted exception that NSC thresholds do not apply to customers terminating service.

H.Reservation of Rights
3CE reserves the right to modify or terminate components of the Net Billing Tariff at a duly noticed public meeting of the 3CE Policy Board. By enrolling or remaining enrolled in the NBT Tariff, the customer acknowledges and accepts 3CE’s reservation of rights.

I. Limitation of Liability
For any act or omission in the performance of this tariff, the sole and exclusive remedy shall be the amount of direct damage actually incurred. In no event shall any party subject to this tariff be liable for any indirect, special, consequential, punitive, or exemplary damages, including lost profits, business interruption damages, or attorney’s fees, whether in contract, tort, or strict liability.

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ATTACHMENT B
Net Billing Tariff (NBT)
Last Updated and Effective: July 1, 2024
APPLICABILITY:

2.0, or VNEM service.

RATES:

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eligible Time-of-Use (TOU) rate code provided to 3CE by the incumbent Investor-Owned Utilities (IOUs).

All NBT customers’ export credits for electricity exported to the grid will be credited by applying the Energy Export Credit (EEC) hourly rates3 adopted by the 3CE Policy Board.4
BILLING:

See Special Conditions Section (D) and (E) for specific terms for Virtual Net Billing and Net Billing Aggregation accounts respectively.

Monthly generation-related export credits, post calculation, will offset any generation-related 3CE import charges in the same bill period or generation-related 3CE import charges within the same Relevant Period as defined below in Special Conditions Section (A). Generation-related 3CE export credits may not offset applicable taxes or IOU Transmission and Distribution (T&D) charges. . See Special Conditions Section (D) and (E) for specific terms for Virtual Net Billing and Net Billing Aggregation accounts respectively.

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will not be subject to the balance reset during the Annual True-Up Process and will roll over to the next Relevant Period.

E. Annual True-Up Process
At the end of the Relevant Period, the following steps will be performed by 3CE for NBT accounts:

7 The 3CE Average Retail Export Compensation Rate can be found at:
https://3cenergy.org/billing/solarbillingplan
8 Current 3CE NSC rates can be found at: https://3cenergy.org/billing/nem/

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SPECIAL CONDITIONS:

A. Relevant Period
3CE defines the Relevant Period as all billing periods occurring in the 12 months, from the start of the customer's January meter read to the end of the December meter read.

C.Sunset Date
3CE defines the sunset date as April 15, 2023, for all NEM tariffs, with the exception of VNEM and NEMA. VNEM and NEMA have a sunset date of February 15, 2024.

If the 15-minute interval shows a total net generation, it will be credited at the 3CE export rate.

Non-residential virtual net billing customers will be billed imports and exports according to Billing Sections (A) and (B) above.

NSC qualification for virtual net billing customers will be individually determined for each benefitting account and applied according to the process detailed in Billing Section (E.3) above.

E. Net Billing Aggregation
Net billing aggregation accounts will have import charges for the benefiting accounts calculated as described in Billing Section (A) above. The export credits from the

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generating site will be calculated using the hourly 3CE EEC rates and allocated to the benefiting accounts. The import charges and allocated export credits will be netted accordingly, as described in Billing Section (B) above.

NSC qualification for net billing aggregation customers will be individually determined for each benefitting account and applied according to the process detailed in the Billing Section (E.3) above.

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Staff Report Item 8
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Juan Lopez, Director of Finance
SUBJECT: Adopt Resolution No. PB-2024-04 approving the FY 2024-25 Financial Policies DATE: June 26, 2024
RECOMMENDATION:

This memorandum recommends that the Policy Board adopt Resolution No. PB-2024-04 approving the FY 2024-25 Financial Policies.

BACKGROUND:

At its regular meeting on September 14, 2023, the Policy Board approved the 3CE FY 2023-24 budget and the 3CE Financial Policies. The FY 2023-24 Financial Policies were a substantial overhaul of a series of administrative and accounting policies that were updated and consolidated to reflect the complexity of 3CE as a community choice aggregator (“CCA”).

Major changes incorporated into the FY 2023-24 Financial Policies included establishing new reserve types, such as the strategic reserve, energy rate stabilization, innovation fund and capital infrastructure reserves. Staff will bring the Financial Policies for Policy Board approval annually as part of the annual budget development process. This will ensure the Board is apprised of and approves 3CE’s financial management and framework shaping the recommended budget.

DISCUSSION/ANALYSIS:

The FY 2024-25 Financial Policies build on the work of the current year’s Financial Policies. The major revision concerns how the established reserves are measured regarding readily available liquidity. Minor revisions to reduce the redundancy of terms and grammatical improvements are also outlined in the redlined version of Financial Policies, which is attached.

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Although the net position has grown in the current year from $241.1 million to $289.7 million since April 30, 2024, the liquidity was reduced by $37.5 million. This is because of seasonality with revenues and expenditures but primarily from a collateral prepayment of a resource adequacy compliance deal.

Because reserves are supposed to be funds that are to be readily available, having a reduction in liquidity but not in net position does not illustrate a correct indication of the availability of our reserves.

Due to the nature of operations as a CCA, there could be reductions in liquidity from lower-than-expected load revenues, collateral calls when market exposure is unfavorable, and prepayment of expenditures driven by market volatility. Measuring reserve target goals by net position impairs the agency from reporting to the Policy Board on the liquidity of such reserves. Establishing and adhering to liquid reserves allows 3CE to establish long-term business sustainability, build collateral for power procurement deals, maintain an investment-grade credit rating, develop funding sources for investment in generation and local initiatives, and reduce the business and customer impact of year-to-year volatility in energy markets and procurement costs.

The recommendation to maintain liquid reserves was reported to the Audit & Finance Committee at its May 29, 2024, regular meeting while discussing the Investment Performance Report. Staff will continue informing the Committee on reserve targets and adherence to the Financial Policies at its regular meetings.

Through research on other CCA financial and reserve policies, it was observed that Ava Community Energy’s Financial Reserve Policy maintains liquid reserves. Other CCAs, such as Clean Power Alliance and MCE, have policies that peg targets to the net position but also have separate stabilization fund policies to defer revenue in years when financial results are robust and apply the deferred revenue in years when financial results are weak. Nonetheless, those policies still include cash targets such as securing 120 days of liquidity on hand.

FISCAL IMPACT:

Adopting the FY 2024-25 Financial Policies promotes financial sustainability, provides clear fiscal guidance, and positions 3CE to quickly adapt to volatile market events.

CONCLUSION:

An annual update to the Financial Policies ensures that 3CE develops its recommended budget backed by a practical framework for overall fiscal planning and management.

ATTACHMENTS:

1. Draft Resolution No. PB-2024-04 Adopting the FY 2024-25 Financial Policies

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DRAFT RESOLUTION NO. PB-2024-04

A RESOLUTION OF THE CENTRAL COAST COMMUNITY ENERGY POLICY BOARD OF DIRECTORS ADOPTING THE FY 2024-25 FINANCIAL POLICIES.

WHEREAS, at its regular meeting on September 14, 2023, the Policy Board approved the 3CE FY 2023-24 budget and the Financial Policies;
WHEREAS, the FY 2023-24 Financial Policies were a substantial overhaul of a series of administrative and accounting policies that were updated and consolidated to reflect the complexity of 3CE as a community choice aggregator (“CCA”); WHEREAS, the Financial Policies shall be brought to the Policy Board annually as part of the annual budget development process to ensure that the Board is apprised of the financial framework that will shape the recommended budget;
WHEREAS, due to the nature of operations as a CCA, there could be reductions in liquidity from lower-than-expected load revenues, collateral calls when market exposure is unfavorable, and prepayment of expenditures driven by market volatility. Measuring reserve target goals by net position impairs the agency from reporting to the Policy Board on the liquidity of such reserves; and
WHEREAS, establishing and adhering to liquid reserves allows 3CE to establish long-term business sustainability, build collateral for power procurement deals, maintain an investment-grade credit rating, develop funding sources for investment in generation and local initiatives, and reduce the business and customer impact of year-to-year volatility in energy markets and procurement costs.

NOW, THEREFORE, THE CENTRAL COAST COMMUNITY ENERGY POLICY BOARD OF DIRECTORS DOES HEREBY RESOLVE, DETERMINE, AND ORDER AS FOLLOWS:

1. The Policy Board hereby adopts:
a. FY 2024-25 Financial Policies attached hereto as Attachment B.

PASSED AND ADOPTED this 26th Day of June 2024, by the following vote:

AYES:

NOES:

ABSENT:
__________________________________
Chair, Das Williams
Attest:
__________________________________
Board Clerk, Heather Vowell

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ATTACHMENT A – FINANCIAL POLICIES (redlined)

1.0 Purpose and Background
Prudent and conservative stewardship of public assets is a principal responsibility given to the officials and managers of 3CE. The development and maintenance of financial policies enable 3CE officials to protect those public assets, ensure transparency, and build public trust. Financial policies define a shared understanding of how 3CE administers its financial affairs and communicates how the agency manages its resources to provide the highest value to the communities we serve.

This document centralizes 3CE’s financial policies and establishes a framework for overall fiscal planning, management, and decision-making related to public assets controlled by 3CE. These policies are reviewed, updated, and brought before the Policy Board as needed but at least annually for adoption. This continued review and adoption promotes sound financial management and helps maintain 3CE’s stability, efficiency, and effectiveness by ensuring the Policy Board’s financial policy guidance is provided before 3CE takes any financial actions. The policies also offer guidelines for evaluating both current activities and proposals for future programs and direct 3CE’s financial resources toward meeting its objectives and strategic initiatives.

These policies provide general guidance in the management of the 3CE’s fiscal affairs and are to be used by all 3CE employees to meet their obligation to operate in a financially prudent manner.

The Recommended Budget adheres to these policies.

2.0 General Financial Policy
The cornerstone and highest priority of 3CE’s financial policies is fiscal integrity. It shall be the goal of 3CE to achieve a strong financial condition with the ability to:
• Sustain adequate financial liquidity to meet normal operating and contingent obligations;
• Ensure a sufficient financial base is maintained to withstand local, regional, national, and global economic impacts;
• Foster the ability to adjust efficiently to the community’s changing service requirements;
• Maintain and improve infrastructure and capital assets; • Regularly review programs and operational methods to improve processes that result in higher productivity and eliminate repetitive and duplicative functions; • Encourage collaboration with other government entities, the private sector, and public-private partnerships where cost and risk are minimized in the delivery of services within 3CE’s service area;
• Promote sharing of costs and benefits by service users; • Ensure the legal use of financial resources through an effective system of internal controls;
• Support sound financial management by providing accurate and timely information on 3CE’s financial condition; and

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• Provide a framework for the wise and prudent use of debt financing and maintain a good credit rating in the financial community.

2.1 The Annual Budget
• The Chief Executive Officer (CEO) will recommend a balanced budget that aligns annual expenditures with market reasonable rates based on the revenue requirement established through a cost of service methodology and minimize the use of reserves and one-time financing sources for ongoing operating expenditures; • 3CE will strive to maintain competitive rates while adhering to our renewable energy goals;
• Through the CEO, the Chief Financial Officer (CFO) will consult with 3CE Officers and seek their input in developing the Recommended Budget through cooperative discussions and financial education;
• CEO will keep the Policy Board apprised of the condition of the 3CE’s finances and emerging fiscal issues; and
• Through the CEO and Officers, 3CE will work with the California Community Choice Association (CalCCA), state representatives, legislative advocates in the State Capitol, and other local government organizations to ensure our community voice is heard regarding any state legislation or regulation affecting our stakeholders.

3.0 Roles and Functions

3.1 Role of Chief Executive Officer
The CEO serves as the chief policy advisor to the Policy Board, Operations Board, and the various Board committees. The CEO promotes responsible resource allocation, strives to protect 3CE’s financial position and integrity, and provides independent analysis on policy and financial issues.

The CEO is the fund manager for the 3CE Enterprise Fund and any other funds that may be created.

3.2 Principal Functions of the Chief Executive Officer
Principal functions of the CEO include:
• Promoting continuous improvement of the structures, systems, processes, and effectiveness of programs;
• Preparing the annual financial plan (Recommended Budget); • Working with departments to evaluate potential federal, state, and local budget impacts; • Developing financial forecasts;
• Monitoring revenues and expenditures for conformance with the annual budget; • Recommending effective fiscal policies to carry out the 3CE mission; • Verifying Policy Board policies are consistently applied; and • Ensuring items brought before the Policy Board are transparent, accurate, complete, fully justified, and reviewed by appropriate stakeholders.

3.3 Principal Functions of the Chief Financial Officer
The CFO is 3CE’s Policy Board appointed Treasurer and considered the subject matter expert for the financial management of the agency. The CFO is responsible for:
• Carrying out financial operations efficiently and cost-effectively while adhering to all 3CE, state, and federal laws, regulations, and policies; • Preparing budgets and financial estimates with attention to accuracy based on financial expertise, 3CE, state, and federal funding changes, and economic indicators affecting

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revenues, expenditures, and service levels;
• Reviewing, evaluating, and assessing potential federal and state budget issues that may impact the agency;
• Developing and performing financial forecasts;
• Overseeing Middle Office responsibilities as identified in 3CE’s Energy Risk Management Policy;
• Monitoring monthly revenue, expenditure, and cash flow performance and conformance with the Adopted Budget;
• Meeting the Policy Board’s strategic financial initiatives and policies; and • Ensuring items brought before the Policy Board are transparent, accurate, complete, fully justified, and reviewed by all appropriate stakeholders.

3.4 Principal Functions of the Audit and Finance Committee The Audit and Finance Committee’s principal functions include receiving staff updates on financial issues affecting 3CE and providing oversight and direction to staff in developing and modifying the budget and audits.

3.5 Principal Functions of the Energy Risk Management Committee The Energy Risk Management Committee is formed by the CEO to implement and maintain the Energy Risk Management Policy, which requires 3CE to maintain sufficient financial reserves to:
• Establish long-term business sustainability;
• Build collateral for power procurement activities;
• Maintain an investment-grade credit rating;
• Develop funding sources for investment in generation and other local initiatives; and • Reduce the business and customer impact of year-to-year volatility in energy markets and procurement costs.

4.0 Services and Fund Structure

4.1 Enterprise Fund
3CE operates as an enterprise fund. The enterprise fund accounts for revenues and expenditures for all 3CE activities. The fund’s operations are financed and operated like private business enterprises, where services provided are primarily funded through user charges (electric generation rates).

4.2 Proprietary Fund
An enterprise fund is classified as a proprietary fund and is financed and operated like private business enterprises whose services are primarily funded through user charges.

4.3 Expenses
Enterprise fund expenses and revenues will be established at sufficient levels to properly maintain the fund’s infrastructure and provide significant capital development.

4.4 Rate Structure and Net Position
The enterprise fund will maintain an adequate rate structure to cover the cost of all operations, including cash flow, capital replacement and maintenance, debt service if applicable, contingency funding, reserve contributions, and depreciation. Rates may be offset from the available unreserved net position only after these requirements are met. Page 57 of 282

5.0 Operating Budget

5.1 The 3CE Budget
The Recommended Budget is the central financial planning document that embodies the agency’s goals, objectives, priorities, levels of service, and the associated operating revenue and expenditures. Appropriations are recommended based on the relationship between expected expenditures and revenue. If revenues are estimated to fall below expected amounts, the agency will take all actions available to reestablish a revenue and expenditure relationship that conforms to the operating requirements.

The Recommended Budget shall be presented to the Policy Board for adoption in September of each year and clearly presented to a general audience of the public. The Recommended Budget may be modified as necessary by the Policy Board during the fiscal year.

5.2 Balance Budget
A budget is balanced when the total estimated financing sources (beginning fund balance plus revenues) equal the total appropriations (expenditures). At no time shall spending in a given year exceed total current estimated revenues plus any net positive position (reserved and non-reserved).

5.3 Ongoing Operations Needs
3CE will adequately fund ongoing maintenance and operational needs with ongoing annual revenue. Without prior direction and approval by the Policy Board, the use of one-time revenues or short-term borrowing is not allowed as a resource to finance ongoing operational needs.

5.4 Capital Facilities and Equipment
3CE shall establish as a primary fiscal responsibility the acquisition, preservation, maintenance, improvement, and, when applicable, orderly replacement of the 3CE’s capital facilities and equipment. 3CE shall endeavor to purchase a permanent headquarters and appropriate regional offices to provide continuity of location and operations while stabilizing and controlling facility costs into the future. 3CE will acquire and maintain high-quality equipment to maximize useful life and ensure efficient operations.

5.5 Appropriations and Transfers
The agency enterprise fund is not constrained by appropriation controls. The CEO is charged with maintaining the relationship between financing uses and financing sources and shall report to the Policy Board any deviation in excess of the adopted budget. The CEO is authorized to make appropriation transfers between departments and divisions within the enterprise fund as necessary to adequately reflect the expenditure needs of the agency.

5.6 Responsibility for Budget Management and Budgetary Control The 3CE shall maintain a budgetary control system to help it adhere to the adopted budget. The CEO has budgetary control and authority over appropriations. The CFO shall administer and maintain the system utilized for budgetary control. As the administrator of the budgetary control system, the CFO shall notify the CEO when a department is reaching the departmental appropriation limit. The CFO shall seek guidance from the CEO on all issues relating to appropriations and controls.

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3CE Officers in coordination with the CFO have primary responsibility for managing departmental budgets by:
• Providing accurate and timely budget estimates;
• Monitoring revenues to ensure timely receipt in the amounts anticipated; • Ensuring that expenditures comply with the law, adopted resolutions, policies, and align appropriations relative to revenues;
• Providing prompt notification to the CEO when either revenues or expenditures are not as anticipated; and
• Preparing and justifying budget revisions when necessary

5.7 Preparation of Financial Reports
The CEO annually prepares or causes to be prepared:
• An Annual Comprehensive Financial Report (ACFR) that reports on the 3CE’s financial position and activities adhering to Generally Accepted Accounting Principles (GAAP) or state law requirements, to provide readers with a broader understanding of the agency’s financial operations;
• A mid-year estimate to provide current-year performance and forward-looking perspective to advise the Policy Board on future challenges and provide a base for building the following year’s Recommended Budget; and
• Additional reports, as appropriate, to keep the Policy Board informed on current financial performance and developments.

The CEO has oversight and contract management over the external auditors reviewing the ACFR.

External auditors shall report to the CEO or designated officer on audit findings. The CEO will take the audit findings thereafter to the Policy Board.

5.8 Publication of Budget
The CEO shall publish annually a Recommended Budget document that satisfies nationally recognized standards for effective budget presentation. The Recommended Budget will be provided to the Policy Board a minimum of two weeks in advance of the annual budget hearings.

5.9 3CE Budget Development
Budget development is an annual process incorporating the Policy Board’s priorities and weighing competing requests for 3CE resources within expected fiscal constraints. The process begins with departments preparing “baseline” budgets proposing levels of service and staffing that can be carried out within expected resources (e.g., revenues). Departments may submit “augmentation requests” for additional resources to mitigate potential impacts, increase staffing/services, or invest in infrastructure. The CEO evaluates baseline budgets and augmentation requests within the constraints of a balanced budget and builds the annual Recommended Budget. Staff considers the following criteria in formulating recommendations for the annual budget and subsequent mid-year budget modifications:
• Mandated by current law, regulation, or Policy Board policy; • Alignment with the 3CE’s strategic initiatives and priorities; • Necessary to maintain the current level of mission-critical services/operations; • Substantiation of compelling public need (e.g., health, safety, economic vitality, quality of life) that cannot be met within existing resources;
• Likelihood of success based on prior performance, degree of planning/specificity, requested resources, and assumed timeline; Page 59 of 282 • Leverages sustainable financial support from non-3CE sources; • Appropriate placement of responsibility (federal, state, or local); • Degree of urgency; and
• Critical infrastructure investment to ensure productivity and continuity of operations.

Criteria in the listing are not exhaustive or in any particular order, nor are they mutually exclusive; funding recommendations may align with more than one criterion.

5.10 Establish 3CE Priorities
The Policy Board has a continuous process of establishing 3CE priorities for ensuing years. The Policy Board implements these priorities in the Recommended Budget. Understanding that elected officials, appointed officials, and agency officers are charged with the actual provision of services to the community, the Policy Board shall set broad priorities to ensure flexibility for the agency to concentrate on these priorities.

5.11 Amendments to the Adopted Budget
Modifications to the Adopted Budget require the approval of a majority of Policy Board members.

Amendments to the Adopted Budget will be made in compliance with Policy Board policies. As an enterprise fund, the relationship between financing uses and financing sources is the overriding principle; thus, appropriation controls are not required.

5.12 Budgetary Basis
The 3CE uses the full accrual basis of accounting following GAAP. The budgetary basis is appropriation-based, beginning October 1 and ending the last day of September of each year. 3CE is an enterprise fund that is appropriation-based budgeted; however, accounting is on a full accrual basis.

5.13 Capital Asset Definition
The 3CE defines capital assets as assets with initial, individual costs of $5,000 or more and an estimated useful life greater than one year, except infrastructure, for which the threshold is set at $100,000. Capital assets include both tangible and intangible assets categorized by asset type for reporting purposes.

5.14 Appropriations for Contingencies
3CE annually adopts an appropriation for contingencies to provide sufficient working capital and a margin of safety for unplanned operational needs. The contingency appropriation is utilized only after all other budget resources have been examined. The appropriation for operational contingencies shall be equal to five percent (5%) of recommended appropriations, excluding cost of energy (COE), unless expressly modified by the Policy Board as part of the annual budget adoption.

6.0 Net Position and Reserve Policies

6.1 Net Position
Net position is a measurement of available financial resources. It is the difference between total assets and total liabilities. The Policy Board recognizes that maintaining a positive net position is essential to preserving 3CE’s financial integrity. Sufficient net position and reserve levels are a critical component of the 3CE’s overall financial management strategy. They are key factors in the Page 60 of 282 ability to sustain service delivery and obtain external financing. Rating agencies analyze net position when considering 3CE’s overall financial strength and creditworthiness. Adequate reserves enable flexible financial planning in developing rate structures, future capital projects, dealing with unforeseen emergencies, and changes in general economic conditions.

6.2 Use of Unreserved Net Position
3CE’s goal is to only use unreserved net position as a source to finance one-time investments, reserves, and/or commitments. As a one-time financing source, any end-of-year positive net position will be used for non-recurring expenditures and only after confirmation of the yearly audit.

6.3 Strategic Reserve
A strategic reserve is essential to provide an adequate financial backstop throughout the year. 3CE shall adopt a strategic reserve equal to twenty-five percent (25%) of budgeted appropriations. The strategic reserve will provide sufficient working capital (cash flow), fund settlements of legal judgments against the 3CE in excess of reserves specifically designated for litigation, for natural disasters as determined by the CEO or Policy Board, and for one-time-only budget overruns that could not be addressed through the annual appropriations for contingencies.

If the strategic reserve is utilized to provide temporary funding for unforeseen needs, 3CE shall take the measures necessary to prevent its use in the following fiscal year by increasing revenues and/or decreasing expenditures to regain balance. 3CE shall also restore the strategic reserve to the minimum level of twenty-five percent (25%) of budgeted appropriations within five fiscal years following the fiscal year in which the event occurred. The plan to restore the strategic reserve shall be included and highlighted in the Recommended Budget.

6.4 Energy Rate Stabilization Reserve
The agency shall maintain an energy rate stabilization reserve equal to twenty (20%) of the budgeted COE. The energy rate stabilization reserve shall be utilized for large fluctuations in the COE and/or required increased power purchasing needs including regulatory compliance. This reserve may be utilized throughout the fiscal year at the direction of the CEO with subsequent reporting to the Energy Risk Management Committee and the Boards.

6.5 Renewable Energy Initiative Reserve
The agency shall maintain a renewable energy innovation and initiatives reserve equal to five percent (5%) of the budgeted COE. This reserve shall be utilized for investments in furtherance of the Boards’ goals to accelerate the utilization of 100% clean and renewable energy through the commitment to new or emerging, but scalable, technologies that can address the challenges of an intermittent renewable grid and reduce dependency on fossil fuels for electricity generation.

6.6 Capital Infrastructure Reserve
The agency shall establish a capital infrastructure reserve sufficient to provide for the operation, routine scheduled maintenance, reasonably anticipated unplanned repair, and ultimate replacement costs of 3CE’s capital infrastructure, including enterprise software, real estate, and electric generation and storage facilities.

6.7 Measurement of Reserve Targets
Due to the nature of the agency's business, the mechanism to fund the four reserves shall be the use of cash, cash equivalents, and short-term investments. The reserves must be liquid and

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available to ensure the ability to use the reserves for their intended purpose. Market fluctuations, operational continuity, competitive advantage, and regulatory compliance are risks that are mitigated with robust reserves as the agency transitions to a clean and renewable electric grid.

7.0 Capital Facilities and Improvement Policies

7.1 Capital Investments
3CE is responsible for investing in the preservation, maintenance, and improvement of owned assets, including buildings, equipment, and other capital infrastructure.

Projects in excess of $100,000 that have an estimated useful life of at least five years and are non-recurring are considered capital projects and should be evaluated against other uses and priorities.

All capital expenditures should be included in the Adopted Budget or taken to the Policy Board for approval and amendment to the Adopted Budget.

8.0 Debt Management
Due to its length and complexity, the Debt Management Policy is reviewed by the Policy Board separately from these policies.

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ATTACHMENT B – FINANCIAL POLICIES

2.0 Purpose and Background
Prudent and conservative stewardship of public assets is a principal responsibility given to the officials and managers of 3CE. The development and maintenance of financial policies enable 3CE officials to protect those public assets, ensure transparency, and build public trust. Financial policies define a shared understanding of how 3CE administers its financial affairs and communicates how the agency manages its resources to provide the highest value to the communities we serve.

These policies provide general guidance in the management of the 3CE’s fiscal affairs and are to be used by all 3CE employees to meet their obligation to operate in a financially prudent manner.

The Recommended Budget adheres to these policies.

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• Provide a framework for the wise and prudent use of debt financing and maintain a good credit rating in the financial community.

3.0 Roles and Functions

The CEO is the fund manager for the 3CE Enterprise Fund and any other funds that may be created.

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4.0 Services and Fund Structure

4.2 Proprietary Fund
An enterprise fund is classified as a proprietary fund and is financed and operated like private business enterprises whose services are primarily funded through user charges.

4.3 Expenses
Enterprise fund expenses and revenues will be established at sufficient levels to properly maintain the fund’s infrastructure and provide significant capital development.

5.0 Operating Budget

5.1 The 3CE Budget
The Recommended Budget is the central financial planning document that the agency’s goals, objectives, priorities, levels of service, and the associated operating revenue and expenditures.

Appropriations are recommended based on the relationship between expected expenditures and revenue. If revenues are estimated to fall below expected amounts, the agency will take all actions available to reestablish a revenue and expenditure relationship that conforms to the operating requirements.

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The CEO has oversight and contract management over the external auditors reviewing the ACFR.

External auditors shall report to the CEO or designated officer on audit findings. The CEO will take the audit findings thereafter to the Policy Board.

5.9 3CE Budget Development
Budget development is an annual process incorporating the Policy Board’s priorities and weighing competing requests for 3CE resources within expected fiscal constraints. The process begins with departments preparing “baseline” budgets proposing levels of service and staffing that can be carried out within expected resources (e.g., revenues). Departments may submit “augmentation requests” for additional resources to mitigate potential impacts, increase staffing/services, or invest in infrastructure. The CEO evaluates baseline budgets and augmentation requests within the constraints of a balanced budget and builds the annual Recommended Budget. Staff considers the following criteria in formulating recommendations for the annual budget and subsequent mid-year budget modifications:
• Mandated by current law, regulation, or Policy Board policy; • Alignment with the 3CE’s strategic initiatives and priorities; • Necessary to maintain the current level of mission-critical services/operations; • Substantiation of compelling public need (e.g., health, safety, economic vitality, quality of life) that cannot be met within existing resources;
• Likelihood of success based on prior performance, degree of planning/specificity, requested resources, and assumed timeline; Page 67 of 282 • Leverages sustainable financial support from non-3CE sources; • Appropriate placement of responsibility (federal, state, or local); • Degree of urgency; and
• Critical infrastructure investment to ensure productivity and continuity of operations.

Criteria in the listing are not exhaustive or in any particular order, nor are they mutually exclusive; funding recommendations may align with more than one criterion.

5.11 Amendments to the Adopted Budget
Modifications to the Adopted Budget require the approval of a majority of Policy Board members.

6.0 Net Position and Reserve Policies

6.1 Net Position
Net position is a measurement of available financial resources. It is the difference between total assets and total liabilities. The Policy Board recognizes that maintaining a positive net position is essential to preserving 3CE’s financial integrity. Sufficient net position and reserve levels are a critical component of the 3CE’s overall financial management strategy. They are key factors in the Page 68 of 282 ability to sustain service delivery and obtain external financing. Rating agencies analyze net position when considering 3CE’s overall financial strength and creditworthiness. Adequate reserves enable flexible financial planning in developing rate structures, future capital projects, dealing with unforeseen emergencies, and changes in general economic conditions.

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7.0 Capital Facilities and Improvement Policies

7.1 Capital Investments
3CE is responsible for investing in the preservation, maintenance, and improvement of owned assets, including buildings, equipment, and other capital infrastructure.

All capital expenditures should be included in the Adopted Budget or taken to the Policy Board for approval and amendment to the Adopted Budget.

8.0 Debt Management
Due to its length and complexity, the Debt Management Policy is reviewed by the Policy Board separately from these policies.

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Staff Report Item 9
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Griffin Boyle, Paige Callaghan, and Ana Capstick, Energy Program Analysts SUBJECT: Receive Update on FY 2023-24 Energy Programs
DATE: June 26, 2024
RECOMMENDATION:

This memorandum updates the Policy Board on FY 2023- 24 Energy Programs.

BACKGROUND:
3CE’s Energy Programs began in 2019 to support customers’ ability to engage in electrification initiatives and reduce greenhouse gas emissions. Today 3CE offers ten Energy Programs offering electrification incentives within the transportation, building, and agricultural sectors. Programs specific to Member Agencies include Plan Your Fleet, Electrify Your Fleet, Charge Your Fleet, and Reach Codes.

DISCUSSION/ANALYSIS:
3CE evaluates the impact of its Energy Programs by tracking several key performance indicators.

Attached to this report are detailed status updates on 3CE’s Community Energy Programs (Attachment 1) and Member Agency Energy Programs (Attachment 2). These status updates note a variety of program performance metrics, including equipment incentivized, housing units electrified, dollars spent, and performance on equity (e.g., dollars going towards income qualified residents).

Highlights of 3CE’s Energy Programs performance to date include:
 $2 million in rebates distributed through the Electrify Your Ride program, up from $1.7M at the same time last year
 Over $500,000 for new, all-electric housing developments, including 174 affordable housing units through the New Construction Electrification Program

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 Full subscription of the Plan Your Fleet Member Agency program, prompting an expansion of the program’s scope and budget for FY 2023-24.
 15 projects funded in four counties through the Agricultural Electrification program.

While staying within the previously approved FY 2023-2024 budget, 3CE is seeking to expand the impact of its Energy Programs both through the recent expansion of scope and budget related to Plan Your Fleet (PYF), and through the introduction of a residential Battery Rebate Program prepared for launch in July 2024. The proposed budget for the Battery Rebate Program is $2M to cover the estimated annual participation of 400 customers.

FISCAL IMPACT:

There is no fiscal impact associated with this report and update.

CONCLUSION:
3CE’s Energy Programs support local economies by providing enrolled communities and Member Agencies with funding and services to accelerate regional clean energy initiatives, as well as offer enhanced incentives for priority communities to promote equitable electrification throughout 3CE service territory.

ATTACHMENT(S):

1. Update on 3CE Community Energy Programs

2. Update on 3CE Member Agency Services

3. Final FY 2022 – 23 Energy Programs Portfolio Evaluation

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FY 2023-24 Community Energy Programs
This report provides an update on participation in Central Coast Community Energy’s (3CE’s) Community Energy Programs for the fiscal year to date.

Electrify Your Ride Program
3CE’s Electrify Your Ride (EYR) program provides rebates for the purchase or lease of an electric vehicle (EV), for Level 2 EV Chargers, and electrical upgrades that may be needed to install chargers. The program also provides technical assistance for EV infrastructure buildout at publicly accessible commercial sites and at multifamily residential properties. The FY 2023-24 budget for EYR totals $4 million.

On January 5th, 3CE launched a Direct-Current Fast Charger (DCFC) program for eligible commercial, multifamily, and agricultural customers. Applicants can receive a rebate for 50% of the total purchase and installation costs of a DCFC up to $100,000.00 USD. Eligible chargers must be publicly available; however, agricultural applicants may install DCFCs on a private lot to support electrification of agricultural equipment. Incentives are available on a first come, first served basis until funding has been fully awarded. Higher incentive amounts are given to income-qualified customers and multifamily-unit buildings to promote greater adoption of transportation electrification in disadvantaged and low-income communities.

Since the beginning of FY 2023-24, 3CE has approved 1,390 applications and has distributed over $2 million in incentives. The following figures summarize program performance based on applications received in FY 2023-24:

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Figure 1 (above): Electrify Your Ride funds distributed by County in FY 2023-24.

Figure 2 (above): Electrify Your Ride Program Funds distributed by measure type in FY 2023-24.

Figure 3 (above): Breakdown of funds distributed to income-qualified applicants.

Tier 1 = 201 - 400% FPL; Tier 2 = <200% FPL; N/A = Non-Income Qualified applicants 20%
2%
33%
25%
20%
FY 2023-24 EYR FUNDS DISTRIBUTED BY COUNTY; SUM = $2,272,281 Monterey County
San Benito County
San Luis Obispo County
Santa Barbara County
Santa Cruz County
58% 29%
9% 4%
FY 2023-24 EYR FUNDS DISTRIBUTED BY MEASURE; SUM = $2,272,281 Battery EV
EV Readiness
Level 2 EV Charger
DCFC Charger
13%
24%
63%
FY 2023-24 EYR FUNDS % INCOME-QUALIFIED INCENTIVES DISTRIBUTED Income Qualified - Tier 1
Income Qualified - Tier 2
N/A

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Electric Bus Program
3CE’s Electric Bus Program provides public schools/school districts, farmworker transit organizations, and public transit agencies enrolled in 3CE service, funding to purchase all-electric buses. The FY 2023-24 budget for the Electric Bus program is $2 million.

Applications are accepted on a rolling basis until funds are fully distributed. Applicants are encouraged to apply for rebates following the purchase and delivery of an electric bus. Notices of Qualification (NOQ) may be requested to provide applicants with assurances of their eligibility status. Program recipients may elect for funds to be distributed directly from 3CE to the bus manufacturer upon receipt of the final invoice. Applicants are encouraged to stack/leverage other incentive funds and no matching fund source restrictions apply.

This fiscal year to date, 3CE has received four electric bus applications for schools in Monterey Santa Cruz, and Santa Barbara counties. One of these applications is for a Title 1 school. In addition, an application for a municipal transportation bus as part of a fleet electrification initiative has been received from Monterey County.

Also in this fiscal year, chargers and buses have been delivered and rebates paid for applications made in previous years including an electric school bus charger in Los Olivos and electric school buses in Orcutt and the City of Santa Cruz. Payments for these projects total $366,761.24 USD.

Electrify Your Home Program
3CE’s Electrify Your Home (EYH) program provides incentives to contractors enrolled in the TECH Clean California (TECH) program for installation of all-electric heat pump water heating and HVAC systems in existing single and multi-family buildings. EYH reduces purchase costs for 3CE customers to incentivize the switch to all-electric heat pump technology. The FY 2023- 24 budget for EYH is $1.5 million.

Contractors enrolled in TECH also have access to no-cost education and training on electrification design and specification, heat pump installation, building science, and sales and marketing for electric heat pumps. There are currently 75 licensed contractors enrolled in the TECH program that work in 3CE’s service area.

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In FY 2023-24 the EYH program has provided $210,500 in incentives for 65 Heat Pump HVAC and 26 Heat Pump Water Heater projects in Monterey, San Luis Obispo, Santa Barbara, and Santa Cruz Counties.

New Construction Electrification Program (NCEP)
The New Construction Electrification Program (NCEP) provides housing developers and homeowners building Accessory Dwelling Units (ADUs) with incentives to build all-electric.

Qualifying housing projects must be built to all-electric standards for water heating, space heating, and cooking appliances. Incentives are provided to developers and homeowners on a per-unit basis upon successful completion of the project. The FY 2023-24 budget for NCEP is $1.1 million.

This fiscal year to date, 3CE has distributed $537,500 through NCEP, including $435,500 to support the construction of 174 all-electric, affordable, multifamily housing units across Santa Cruz, San Luis Obispo, and Monterey counties, and $102,000 for nine market-rate, all-electric projects including ADU, Fire Rebuild, and single-family homes.

Agricultural Electrification Program
3CE’s Agricultural (Ag) Electrification program provides rebates for the replacement of fossil fuel powered equipment with electric powered alternatives including farm tools, irrigation pumps, vehicles, and more. Enhanced incentives are available for small businesses and for businesses replacing equipment damaged or destroyed by a declared natural disaster. The program also provides technical assistance for EV infrastructure buildout at agricultural customer sites. The FY 2023-24 budget for Ag Electrification is $1.8 million.

Greater incentive levels are offered for equipment with higher estimated GHG emissions avoidance and those benefiting small to medium sized businesses. 3CE covers up to 50% of the cost for farm equipment, providing up to $15,000 USD for smaller “Tier 1” equipment and up to $75,000 USD for larger “Tier 2” equipment. Program funds are offered as a post-purchase rebate.

This fiscal year to date, 3CE has distributed incentives for 15 projects, totaling $352,937.74 USD. Completed projects by county are shown in Table 1 below.

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County Tier 1
Applications
Tier 2
Applications
Small
Businesses
Total
Monterey County 3 4 57% 7
Santa Cruz County 4 0 50% 4
San Benito County 1 0 0 1
SLO County 0 0 0 0
Santa Barbara
County
0 3 33% 3
Total: 8 6 28% 15
Table 1: Agricultural Electrification projects paid in FY 2023-24.

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FY 2023-24 3CE Member Agency Programs
This report provides an update on FY 2023-24 Member Agency program implementation activities.

Reach Code Program
3CE’s Reach Code program for Member Agencies provides no-cost technical assistance to help local cities and counties adopt and implement reach codes. Services include presentations to key stakeholders, the drafting of customized ordinances, peer review, and the development of enforcement tools. The Reach Code program budget for FY 2023-24 is $100,000.

Member Agencies enrolled in 3CE’s FY 2023-24 Reach Code Program:

Member Agency Reach Code Type
City of San Luis Obispo New Construction (complete) and Existing Buildings (underway) City of Santa Cruz Existing Buildings (complete)
City of Goleta Electric Vehicle Charging Infrastructure (underway) County of Monterey Electric Vehicle Charging Infrastructure (underway) Electrify Your Fleet Program
3CE’s Electrify Your Fleet (EYF) program provides rebates to Member Agencies for the purchase or lease of eligible vehicles. Applications are accepted until program funds are fully reserved or spent. Applicants are eligible to receive up to $150,000 in EYF incentives during a single fiscal year. The FY 2023-24 budget for EYF is $2.1 million. In FY 2023-24 3CE has incentivized 20 Battery Electric Vehicles totaling $166,000.

Member Agencies enrolled in 3CE’s FY 2023-24 EYF Program:

Member Agency Equipment Type Quantity Total Incentive
CITY OF SAN LUIS OBISPO Battery Electric Vehicle (BEV) 2 $10,000.00 CITY OF SANTA MARIA Battery Electric Vehicle (BEV) 12 $114,000.00 COUNTY OF SANTA CRUZ Battery Electric Vehicle (BEV) 6 $42,000.00 Total 20 $166,000.00
Charge Your Fleet Program
3CE’s Charge Your Fleet (CYF) program provides rebates for the purchase and installation of Level 2 or Level 3 (DC Fast Chargers) EV chargers. Member Agencies are eligible for up to $150,000 in CYF each fiscal year. 3CE’s 2023-24 CYF budget totals $1.2 million.

In FY 2023-24, 3CE has incentivized 24 EV chargers totaling $208,698.

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Member Agency Equipment Type Quantity Total Incentive
CITY OF CARPINTERIA Level 2 10 $48,698.25
CITY OF SANTA CRUZ Level 2 4 $20,000.00
CITY OF SANTA MARIA Level 2 8 $40,000.00
CITY OF WATSONVILLE Level 3 2 $100,000.00
Total 24 $208,698.25
Plan Your Fleet Program
3CE’s Plan Your Fleet (PYF) program provides no-cost planning, design, and engineering consulting to Member Agencies to accelerate fleet electrification and EV charging infrastructure deployment across the Central Coast. 3CE’s FY 203-24 budget for PYF is $250,000.

This fiscal year to date, the jurisdictions of Carpinteria, Greenfield, Monterey County, Santa Barbara County, and City of Marina are taking advantage of the program to develop fleet replacement plans and charging infrastructure designs.

To best support 3CE’s Member Agency transportation electrification expansion plans, the Operations Board approved and authorized the CEO to execute an amended agreement with the Plan Your Fleet provider, Optony, Inc. on May 8th, 2024. This agreement increases Member Agency fleet electrification services by $486,375 for a total not-to-exceed amount of $2,502,675 with a term ending on September 30, 2027.

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ENERGY PROGRAMS

PORTFOLIO EVALUATION
2022-2023

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1 CENTRAL COAST COMMUNITY ENERGY

TABLE OF CONTENTS
Executive Summary ........................................................... 2 I. Introduction ............................................................... 3 II. Programs Portfolio Overview ................................... 4 III. Evaluation Approach ................................................ 7 Categories .................................................................. 7 Key Performance Indicators ...................................... 8 Social Impact & Equity Considerations ................... 8 Communications & Outreach approach .............. 11
IV. Methodology ........................................................... 12 Electrify Your Ride ...................................................... 14 EV Charging Concierge Service ................................. 18 Electric Bus ................................................................... 19 New Construction Electrification ............................ 21 Electrify Your Home ................................................... 24 Agricultural Electrification ....................................... 29 Broadband Access Initiative .................................... 32 Demand Response ..................................................... 32 Charge Your Fleet ....................................................... 34 Electrify Your Fleet ..................................................... 35 Plan Your Fleet ............................................................ 37 Reach Codes ................................................................ 38 Findings ............................................................................ 41 Recommendations ........................................................... 43 Conclusion ........................................................................ 45 Appendix 1 ....................................................................... 46

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2022-2023 ENERGY PROGRAMS PORTFOLIO EVALUATION 2
EXECUTIVE SUMMARY:

Central Coast Community Energy (3CE) provides affordable, reliable, and clean electricity while working to catalyze regional climate action. This comprehensive evaluation of the agency’s fiscal year (FY) 2022-23 Energy Programs portfolio supports 3CE’s mission by assessing program effectiveness, informing future programmatic design, and delivering on the agency’s commitment to transparency and continual improvement.

At its September 2022 meeting, the 3CE Policy Board of Directors approved its FY 2022-23 Operating Budget, including nearly $15 million for energy programs incentives. This allocation is divided across nine programs – four of which are offered to Member Agencies, the local city and county governments that make up 3CE, and five of which are offered as community programs to eligible, enrolled customers. 3CE’s Energy Programs portfolio, through its multifaceted electrification efforts, promotes inclusivity and brings measurable greenhouse gas (GHG) reductions. 3CE’s evaluation metrics are structured around three key categories— program access, inclusive investment, and climate impact, which are selected to align with California state energy priorities.

Standardized Key Performance Indicators (KPIs) were developed within each category, with corresponding metrics assigned to gauge performance and provide a measurable basis for analyses.

The use of geographic information systems (GIS), normalized participation rates, and income equity indicators provides further insight into program accessibility, barriers, and opportunities.

Of the $14.9 million budgeted for incentives, $8.3 million, or 56%, was spent. Approximately $3.7 million, or 44% of the incentive funds distributed, were for equity-focused projects, awarded to income-qualified customers, Title 1 schools, and small to medium-sized agricultural businesses.

The electrification projects incentivized by 3CE’s Energy Programs resulted in a reduction of 4,732 metric tons of CO2e in FY 2022-23, equivalent to taking more than one thousand gas-powered passenger vehicles off the road and avoiding nearly 13 million gas-powered miles driven, based on the average mileage for a passenger vehicle in California.1 3CE’s energy programs reach thousands of customers across the five counties within its service territory. By helping customers take personal action to combat climate change through electrification, 3CE’s energy programs have contributed to reducing greenhouse gas emissions and other harmful pollutants in the region, helping to improve air quality. 3CE recognizes the need to continually enhance and refine its programs, and to expand their impact. This report aims to identify areas for improvement, and specifically, to drive better outcomes related to equitable program access.

Future energy program portfolios will seek to further meet customer needs by responding to a changing energy landscape and exploring new directions to address affordability, infrastructure development, and support a renewable grid through customer load shifting. This approach aligns with 3CE’s commitment to its customers to support community resilience in a dynamic energy landscape, while striving toward 100% clean, renewable, and affordable energy. 1https://www.fhwa.dot.gov/policyinformation/statistics/2019/

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3 CENTRAL COAST COMMUNITY ENERGY
I. INTRODUCTION:
3CE is a Joint Powers Authority (JPA) comprised of 35 jurisdictions throughout California’s Central Coast region formed for the purpose of: 1.) reducing greenhouse gas emissions related to the use of power; 2.) providing affordable rates that are competitive to the incumbent utilities; 3.) electrifying transportation, buildings, and public infrastructure; 4.) stimulating the local economy; and 5.) providing stable electric generation rates.

Managing 3CE’s energy programs portfolio – in addition to procuring clean and renewable power, implementing sound financial policies, and engaging the community – is a foundational component of meeting the agency’s core JPA goals. 3CE’s FY 2022-23 energy programs were designed to bring meaningful decarbonization and climate action via building, transportation, and agricultural electrification throughout the counties and cities served by 3CE.

This year’s evaluation focuses on equity in program design, access, and participation to ensure 3CE’s impact reaches each of the agency’s diverse communities. Using normalized data, the analysis examines who participates in programs, using mapping tools to help visualize program reach across the region. Assessing initiatives against KPIs helps quantify their impact and create findings to identify what is working and where gaps in accessibility demand attention.

The recommendations made in this report include short and long-term changes to program design and implementation. Findings also address budgeting, outreach, and future assessment techniques, with the goal of developing standardized metrics for reporting program achievements moving forward.

In summary, this evaluation seeks insights to better align programs with community needs, open access, and drive inclusion by critically examining participation barriers.

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2022-2023 ENERGY PROGRAMS PORTFOLIO EVALUATION 4
II. PROGRAMS PORTFOLIO OVERVIEW:
3CE’s Energy Programs provide customer incentives to encourage fuel switching and the adoption of electric technologies. Some initiatives also offer technical assistance, including for contractors transitioning to electric appliance installation.

PROGRAMS FALL INTO THE FOLLOWING KEY FOCUS AREAS:

Transportation Electrification
Incentives for light, medium and heavy-duty electric vehicles (EVs). Includes support for EV charging infrastructure.

Building Electrification
Incentives to switch various end uses
in new and existing residential and
commercial buildings from fossil fuels to
electricity. Covers domestic hot water;
heating, ventilation, and air conditioning
(HVAC); and more.

Agricultural Electrification
Incentives to electrify farm equipment
such as irrigation pumps, tractors, and
forklifts. Aims to transition agriculture
away from fossil fuels.

Member Agency
Incentives to support electrification
projects for 3CE Member Agencies.

General Support
Planning assistance and technical support
for Member Agencies and communities.

Helps address electrification barriers and
training gaps.

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5 CENTRAL COAST COMMUNITY ENERGY
Program Name Approved
Applications
Incentive
Budget
Budget
Spent: % Spent AvoidedMT CO2e
$ Invested/
GHG reduction
Electrify Your Ride 1,718 $ 4.1 M $3.7 M 91% 3,279 $741 Electric Bus 6 $ 2 M $875 K 44% 118 $7415
New Construction
Electrification 16 $1.5 M $616 K 41% 313 $1954
Electrify Your Home 243 $1.4 M $848 K 59% 211 $3191
Ag Electrification 27 $ 2 M $732 K 37% 515 $1825
Charge Your Fleet 12 $ 1.25 M $208 K 17% 0 N/A
Electrify Your Fleet 16 $ 2 M $757 K 38% 296 $3368
Plan Your Fleet 3 $4502 K $450 K 100% N/A N/A
Broadband
Access Initiative 2 $150 K $150 K 100% N/A N/A
TOTAL 2,038 $ 14.85 M $8.3 M 56% 4,732 $3082
Focus Area Program Description
Transportation Electrification
Electrify Your Ride
Post-purchase rebates for electric EVs, EV
supply equipment (EVSE), and EV Charger
installations.

Electric Bus Rebates for electric buses paid post-purchase or directly to the manufacturer.

Building Electrification
New Construction
Electrification
Rebates for all electric residential building
projects.

Electrify Your Home
Rebates to contractors that are passed on
to customers for electric space and water
heating.

Agricultural (“Ag”) Electrification Ag Electrification Electric agricultural equipment rebates.

Member Agencies
Reach Codes
Technical support for Member Agencies’
development and adoption of building or EV
Reach Codes.

Plan Your Fleet EV charging and fleet planning technical assistance.

Charge Your Fleet Direct rebates for fleet EVSE purchase and upgrades.

Electrify Your Fleet Direct rebates for fleet EV purchases and leases.

Table 1: 3CE focus areas and associated Energy Programs Table 2: Energy programs high-level performance summary

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2022-2023 ENERGY PROGRAMS PORTFOLIO EVALUATION 6
Program Name Days to fund
completed projects*3
Vendor
Implementation Costs
% Of eligible
applicants funded
Electrify Your Ride 28 $95,752 100%
Electric Bus* 498 N/A 100%
New Construction
Electrification* 74 N/A 100%
Electrify Your Home 37 $37,420 100%
Ag Electrification* 65 N/A 100%
Charge Your Fleet 186 N/A 100%
Electrify Your Fleet* 191 N/A 100%
Plan Your Fleet* N/A $200,000 100%
Reach Codes N/A $88,682 100%
TOTAL 154 $105,463 100%
Table 2 (continued): Energy programs high-level performance summary 2 The Plan Your Fleet budget covers fees for technical consulting services provided to local governments in 3CE’s jurisdiction. Funding is not distributed as a rebate or incentive payment to participating entities, but rather is offered to entities as a service at no additional cost.
3 Those programs with an asterisk (*) provided reservations of program funds to eligible applicants during FY 2022-23, thereby leading to a longer average time to complete projects.

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7 CENTRAL COAST COMMUNITY ENERGY
Categories:

1. Program Access

2. Inclusive
Investment

3. Climate Impact
Key Performance
Indicators and
Measaurements
Observations Recommendations
III. EVALUATION APPROACH:

CATEGORIES
3CE’s FY 2022-23 Energy Programs Portfolio Evaluation categorizes performance metrics into three key areas – Program Access, Inclusive Investment, and Climate Impact. These indicator categories are adapted from state energy reporting standards to help define program objectives related to serving customers across income levels and geographic areas.

Using statewide standardized metrics brings greater understanding of how well programs reach and benefit customers in the community, including those in historically under-resourced areas. Relying on data-driven state benchmarks enables contextual tracking of how effectively programs distribute access, costs, benefits, and opportunities across diverse populations throughout the region.

The evaluation framework aligns with broader efforts to assess programs’ ability to address potential socioeconomic barriers, while promoting renewable and affordable energy transitions leaving no communities behind.

PROGRAM ACCESS
Facilitate widespread access to electrification programs across all enrolled customer groups, with emphasis on engagement of small businesses and local contractors. Expand program availability measured against total customer accounts per jurisdiction. Assess equitable access through the participation of income-qualified individuals and under-resourced communities.

INCLUSIVE INVESTMENT
Invest strategically across all customer types prioritizing equity, technology development, electrification infrastructure, and technical assistance in underserved communities.

Support local capacity building through training, outreach, and education to advance clean energy. Evaluate the proportion of funds directed towards equity-centered groups, and funds invested per metric ton of CO2 avoided.

CLIMATE IMPACT
Promote initiatives aimed at reducing greenhouse gas emissions to address climate change and support the advancement of a renewable grid. Make electrification more affordable, prioritize public health, and reduce greenhouse gas emissions (GHGs). 01 02
03

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2022-2023 ENERGY PROGRAMS PORTFOLIO EVALUATION 8

KEY PERFORMANCE INDICATORS
Within the three defined categories, a set of Key Performance Indicators (KPIs) is used to evaluate program reach, impact, and overall effectiveness. Table 3 lists KPIs by category and describes the standard of measurement applied to each performance indicator.

CATEGORY KPIS
01 Program Access
Customer participation: Measured by each 3CE jurisdiction.

Normalized by number of customers in each county.

Inclusivity: Portion of applications and funding benefitting income-qualified individuals and under-resourced
communities.
02 Inclusive Investment
Incentives paid: Total funds allocated by program and
equity indicator.

Cost per GHG avoided: Funds invested per metric ton of
CO22 avoided.
03 Climate Impact GHG Reductions: Metric tons of CO22 avoided as a result of program participation.

Table 3: Evaluation Categories and Key Performance Indicators

SOCIAL IMPACT & EQUITY CONSIDERATIONS
For the FY 2022-23 Energy Programs Portfolio Evaluation, 3CE defines equity as a commitment to ensuring fair access to energy programs for all customers. The goal in assessing equity-based metrics is to better understand Energy Programs access within its service territory. 3CE tracks energy program participation by the following groups to measure progress in program design, implementation, and accessibility. Table 4 provides a summary of equity-based outcomes resulting from 3CE’s portfolio of energy programs.

Staff observations and near and long-term recommendations are also included for each program.

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9 CENTRAL COAST COMMUNITY ENERGY
4 California Code, Government Code - GOV § 14837 - last updated January 01, 2023 | https://codes.findlaw.com/ca/government-code/gov-sect-14837/ 5 CalEPA Office of Environmental Health Hazard Assessment (OEHHA), https://oehha.ca.gov/calenviroscreen/sb535 6 CalEnviroScreen 4.0. (2021).
https://oehha.ca.gov/media/downloads/calenviroscreen/report/calenviroscreen40reportf2021.pdf

INCOME-QUALIFIED APPLICANTS
3CE customers whose self-reported household income falls within 400-201% (Tier 1) or 200% and below (Tier 2) of the Federal Poverty Level, verified through income tax documentation. Customers who are enrolled in the rate assistance programs California Alternate Rates for Energy (CARE) or Family Electric Rate Assistance Program (FERA), which utilize 200% or below of the federal poverty level as their eligibility guideline, are included in this category.

SMALL BUSINESSES
3CE relies on the definition set forth in Government Code Section 14837(d)(1) which identifies independently owned and operated businesses that are not dominant in their field of operation, the principal office of which is located in California, the officers of which are domiciled in California, and which, together with affiliates, has 100 or fewer employees, and average annual gross receipts of fifteen million dollars ($15,000,000) or less over the previous three years, or is a manufacturer, as defined in subdivision (c), with 100 or fewer employees.

AFFORDABLE HOUSING PROJECTS
Housing units designated as affordable housing according to the applicable authority having jurisdiction. This may also include farmworker housing units.

TITLE 1 SCHOOLS
Federal designation used to identify schools in communities considered to be underserved, based on the level of poverty in a school’s attendance area.

CALENVIROSCREEN 4.0 DESIGNATED COMMUNITIES
CalEnviroScreen identifies disadvantaged communities (DACs), based on geographic, socioeconomic, public health, and environmental hazard criteria. A CalEnviroScreen 4.0 DAC-designated community is in the top 25 percentile of a weighted average of 21 indicators across pollution burden (average exposures and environmental effects) and population characteristics.

CALIFORNIA POVERTY PERCENTILE
One of the 21 indicators used in the CalEnviroScreen 4.0 percentile calculator. The US Census Bureau’s American Community Survey maintains information on the rate of poverty in different areas in California.

This indicator looks at the percent of the population with incomes less than two times the federal poverty level.

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2022-2023 ENERGY PROGRAMS PORTFOLIO EVALUATION 10

SOCIAL IMPACT & EQUITY CONSIDERATIONS CONTINUED
3CE’s 2021-22 Underserved Communities Outreach and Engagement Plan defined communities as underserved if they face limited access to public investments, energy-related resources, and information.

The report considered factors such as geographic location, cultural differences, socioeconomic status, health risks, the digital divide, and exposure to environmental hazards.

Closely examining program efficiency, effectiveness, and accessibility assists in better defining success and ensuring robust and equitable participation in electrification programs. Moreover, achieving equitable program performance is more likely when we incorporate equity objectives and clearly defined metrics into the design and implementation of energy programs and policies, which is an ongoing effort at 3CE.

Understanding that equity should be evident not only in the distribution of program benefits but also in the entire process from design to implementation, 3CE has introduced clear metrics for evaluating all electrification programs.

Program Equity Design
Criteria
Equity-Centered
Projects Equity Project $ % of ProgramBudget
Electrify Your Ride Income-qualified 508 $1.5 M 36%
Electric School Bus Title 1 School 6 $875 K 44%
New Construction
Electrification Affordable Housing 6 $536 K 36%
Electrify Your Home Income-qualified 3 $47 K 3%
Agriculture
Electrification Small Business 21 $570 K 29%
Broadband
Access Initiative
Income-qualified
Small Business 2 $150 K 100%
TOTAL 546 $3.7 M 24%
Table 4: Overview of equity-centered program outcomes
7 CalEPA (2015, December 15). Poverty [Text]. OEHHA. https://oehha.ca.gov/calenviroscreen/indicator/poverty 8 3CE Underserved Communities Outreach and Engagement Plan 2021/2022

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11 CENTRAL COAST COMMUNITY ENERGY
COMMUNICATIONS & OUTREACH APPROACH:

Focused outreach, marketing, and communications are critical to driving participation in Energy Programs. 3CE works to raise awareness about its programs in the community, provide ongoing customer service and education, and promote the agency’s Energy Program offerings. 3CE employs six full-time outreach and customer accounts-focused staff, and three full-time staff dedicated to marketing and communications.
3CE’s strategy to build agency awareness and promote Energy Programs includes:

I. Community Engagement
a. Community engagement, or social-network marketing, is critical for raising awareness, building trust, and driving participation in Energy Programs through relationships and word of mouth. 3CE is an active member of 44 local and diverse organizations throughout its service territory, and in 2023, 3CE participated in more than 200 community events. Activities include engaging one-on-one with customers by tabling at events, presenting to Chambers of Commerce and other business associations, and sponsoring community-based organizations. Sharing information about Energy Program offerings and the increased rebates available to income-qualified customers.

II. Customer Service and Education
a. 3CE conducts regular webinars and roundtable working groups directly focused on Energy Programs offerings. In 2023, the agency held webinars on rates, billing, and a variety of electrification topics, as well as quarterly focus groups with Member Agencies. 3CE’s service area is diverse, as are the needs of each customer. Developing content to meet customers where they are is a tactic for growing interest in Energy Programs. These forums also allow for dialogue that is helpful to tailoring programs to community needs. Six webinars, six working groups, three Member Agency conference calls, and 32 presentations to Member Agencies were delivered to our communities in FY 2022-23. Greater emphasis was placed on serving our Spanish-speaking customers in FY 2022-23 by hosting a series of bilingual educational webinars and sponsoring information booths at community events with bilingual 3CE representatives, as well as providing more bilingual printed material.

III. Marketing and Communications
a. Targeted online, print, and radio promotions are the final key elements of our coordinated strategy. 3CE allocates approximately $1.6 million to our communications and marketing efforts annually, with $360,000 of the annual budget is dedicated to paid advertising aimed at raising awareness of the agency and marketing energy programs to the more than 1 million people it serves. Of When we ask program participants how they hear about 3CE, the vast majority hear about our programs through word of mouth. In addition to word of mouth, 31% of participants report that they hear about us on social media, 23% in our Digital Newsletter, Online & Radio Advertising, and 22% through Local Government. This data speaks to the importance of our coordinated approach to community engagement and customer education, coupled with traditional marketing and advertising. Across all programs, an average annual click-through rate increase of 1.41% was observed on social media platforms. There were no net increases observed for 3CE’s website click-through rates.

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2022-2023 ENERGY PROGRAMS PORTFOLIO EVALUATION 12
IV. METHODOLOGY
To calculate program participation for FY 2022-23, 3CE collected data on the total number of applicants, approved applications, and the number of incentivized electrification projects completed. To provide a more accurate representation of participation rates across 3CE’s service areas, we adjusted the raw participation rates for unique applicants based on the number of active service agreements in each county.

Unique applicants were counted over total measures (in other words if an individual purchased two EVs, they were counted once, not twice) to avoid regional misrepresentation and used active service agreements instead of total enrolled customers to prevent potential duplication or counting of closed accounts.

A similar approach was applied to normalize the count of income-qualified residents enrolled in CARE/ FERA programs, where again the total number of enrolled, active service agreements within each county was considered. This method was used for all mass-market community programs, while member agency programs and other specialized community programs had unique reporting methodologies, which are explained further in subsequent sections of this report. For the FY 2022-23 Energy Programs Evaluation, only projects that were paid out during the fiscal year were included for analyses9 GHG Accounting
To assess avoided greenhouse gas (GHG) emissions reductions resulting from incentive programs, emissions from conventional fuel-based systems were compared with the electric-based alternatives and a set of conversion and criteria pollutant factors were applied with the 100-year Global Warming Potential (GWP) to calculate a weighted CO2 equivalent value. In accordance with best-in-class GHG accounting methods, all values are displayed using metric tons of carbon dioxide equivalent (CO2e) as the unit of measurement.

For buildings transitioning from natural gas to electric heat pump systems, the annual energy consumption in terms of kilowatt-hours (KWh) was calculated for both conventional and electric systems. The emissions associated with natural gas were then converted to their CO2 equivalent based on emissions factors and the carbon intensity of the local grid. See Appendix 1 for more information.

Transportation and agricultural electrification initiatives underwent a similar treatment, comparing the lifetime emissions associated with traditional fuel consumption and emissions associated with the generation and use of electricity to power electric vehicles and other equipment. The overall approach used emissions factors specific to the region and employed standard protocols for emissions calculations to ensure robust and transparent reporting. In all cases, GHG emissions were only calculated for projects paid for during FY 2022-23 and do not include any reserved projects not yet complete.

Geographic Information System (GIS) Mapping
To better understand program participation for the mass-market community programs offered in FY2022-23, 3CE conducted a geospatial analysis using QGIS, an open-source geographic information system. Program participation was layered over CalEnviroScreen percentiles and poverty levels, indicators that have been previously identified as a potential barrier to electrification program participation. 10Program participation was normalized by the number of active customer accounts in each census tract within the five counties served by 3CE. An overlay with CalEnviroScreen 4.0 indicator data was performed to build a 9-square bivariate map displaying the variables of interest. This approach helps identify locations where program participation is disproportionate relative to the indicator of concern. While these maps allow for an exploratory analysis of potential disparities in program participation, they do not assume causation. They serve mainly to highlight areas that could benefit from further analysis or tailored program design efforts to enhance local engagement. 9 Projects that reserved funds in a previous fiscal year and completed their work in FY 2022-23 are included in the budgetary and participatory metrics. Projects that reserved funds in FY 2022-23 but were not completed or paid during the same period, are not counted in tallies of investment or impact. 10 Guo, S., & Kontou, E. (2021). Disparities and equity issues in electric vehicles rebate allocation. Energy Policy, 154, 112291. https://doi.org/10.1016/j.enpol.2021.112291

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13 CENTRAL COAST COMMUNITY ENERGY
V. COMMUNITY

PROGRAMS

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2022-2023 ENERGY PROGRAMS PORTFOLIO EVALUATION 14

ELECTRIFY YOUR RIDE
Program Goals
• Facilitate the transition to zero emission vehicles.
• Reduce GHG emissions from transportation.
• Distribute 40% of incentives to incomequalified customers. • Incentivize a minimum of 600 EVs and 450 EV Chargers.

The Electrify Your Ride program
provides rebates to residential,
commercial/agricultural, and public
agency customers for transportation
electrification projects. This includes
the purchase/lease of EVs, Level 2
EVSE, and Readiness (installation
costs for EV chargers).

The total incentive budget for FY
2022-23 was $4.1 million.

Applications
Received:
1,961
Applications
Approved:
1,718
Incentives
Approved:
2,385
Battery EV: 996
EV Chargers: 747
EV Readiness: 615
Plug-In Hybrid: 27
Enhanced incentives are available to
income qualified residential customers
that fall under two tiers:

Tier 1 – customers whose income is
between 400-201% of the federal
poverty level (FPL); and Tier 2 –
customers whose income is under
200% of the FPL.

Table 6: 3CE jurisdictions with the highest FY 2022-23 EYR participation rates.

County Total Participants Per 1,000 Customers Per 10,000 Customers San Luis Obispo County 394 6 62
Santa Cruz County 296 3 29
Monterey County 331 2 23
Santa Barbara County 256 2 23
San Benito County 41 2 18
Jurisdiction EYR Participants 3CE Customers % Participation Santa Cruz County 188 53,447 12%
Santa Barbara County 170 50,678 11%
Monterey County 186 45,184 10%
City of Salinas 40 42,533 10%
City of Santa Maria 29 31,511 7%
City of Santa Cruz 68 22,821 5%
City of San Luis Obispo 208 23,978 5%
02 PROGRAM ACCESS
Table 5: EYR Program participation normalized by number of 3CE customers in each county.

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15 CENTRAL COAST COMMUNITY ENERGY
Table 7: 3CE jurisdictions with the lowest FY 2022-23 EYR participation rates.

Jurisdiction EYR Participants 3CE Customers % Participation Gonzales 5 1991 < 0%
Buellton 2 2165 < 0%
San Juan Bautista 2 874 < 0%
Del Rey Oaks 2 801 < 0%
Sand City 0 389 0%
Table 8: Top 10 zip codes for Tier 1 (201-400% FPL) EYR vehicle applications.

Zip Applications Median Income City County

1. 95060 12 $101,962 Santa Cruz Santa Cruz County

2. 93401 10 $89,962 San Luis Obispo San Luis Obispo County

3. 93940 10 $103,946 Del Rey Oaks Monterey County

4. 93446 9 $89,889 Adelaida San Luis Obispo County

5. 93442 8 $88,309 Morro Bay San Luis Obispo County

6. 93455 7 $105,838 Guadalupe Santa Barbara

7. 93405 6 $48,388 San Luis Obispo San Luis Obispo

8. 95062 6 $101,291 Capitola Santa Cruz

9. 93950 5 $102,553 Carmel Monterey

10. 95003 5 $136,506 Scotts Valley Santa Cruz
Table 9: Top 10 zip codes for Tier 2 (below 200% FPL) EYR vehicle applications.

Zip Applications Median Income City County

1. 93401 14 $89,962.00 San Luis Obispo San Luis Obispo County

2. 95023 11 $103,238.00 Hollister Monterey County

3. 95076 11 $86,062.00 Carmel Monterey County

4. 93458 10 $75,519.00 Santa Maria Santa Barbara County

5. 93455 10 $105,838.00 Guadalupe Santa Barbara County

6. 93454 8 $80,438.00 Guadalupe Santa Barbara County

7. 93905 8 $68,795.00 Salinas Monterey County

8. 93906 8 $93,626.00 Carmel Monterey County

9. 93940 8 $103,946.00 Del Rey Oaks Monterey County

10. 93117 7 $79,553.00 Gaviota Santa Barbara County

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2022-2023 ENERGY PROGRAMS PORTFOLIO EVALUATION 16
County CARE/FERA % CARE/FERA Per 1,000 CARE/FERA
Monterey 111 0.30% 3
San Benito 18 0.38% 4
San Luis Obispo 100 0.63% 6
Santa Barbara 74 0.39% 4
Santa Cruz 88 0.55% 5
TOTAL 391 0.44% 4
ELECTRIFY YOUR RIDE 2022-2023 PARTICIPATION

VS POVERTY PERCENTILE
The Electrify Your
Ride Participation
Participation in the
program divided
by the number of
accounts within each
census tract.

Poverty Percentile
Each census tract’s
poverty ranking
compared to the rest
of California.

Figure 1: Bivariate map of normalized EYR Participation percentiles in 3CE service area Table 11: Income qualified EYR participation normalized by 3C CARE/FERA customers in each county Table 10: EYR median purchase price by vehicle type
Battery EV:
$51,490
Electric Motorcycle:
$22,670
Plug-in Hybrid EV:
$42,979

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17 CENTRAL COAST COMMUNITY ENERGY
EV Charging Concierge Service
3CE provides technical support to multifamily, commercial, and agricultural property owners to install charging stations for residential, workplace or public use. Technical assistance includes remote or in-person property assessments, feasibility findings and charging installation designs, facilitation of bids, guidance through construction, and 3CE incentive application assistance.

In FY 2022-23, outreach for these services included two live events, five webinars, a press release to 88 media outlets, five brochures, and information materials for 3CE website. The technical assistance program engaged with 10 multifamily property sites, nine commercial/public agency sites, and six agricultural sites.

While no engagements in FY 2022-23 led to charger installations/upgrades, 20 of these projects are in the planning stages. 96 Level 2 Chargers and seven DCFCs are anticipated to be installed because of the ongoing, active engagements across all customer types.
02 INCLUSIVE INVESTMENT
Total incentives paid:
$3,717,03
Income-qualified
applications:
508
% of total approved
applications:
30%
Income-qualified
incentives paid:
$1,469,336
% of total budget
36%
03 CLIMATE IMPACT
Annual estimated
GHG emissions reduction:
3279 metric tons CO22e
GHGs for each measure:

3.24 metric tons CO22e
$/GHG avoided investment:
$741 per metric ton CO22e

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2022-2023 ENERGY PROGRAMS PORTFOLIO EVALUATION 18

EV CHARGING CONCIERGE SERVICE

OBSERVATIONS
• Census tracts with low participation and high poverty rates are located in Santa Cruz, Castroville, Watsonville, Interlaken, Hollister, Prunedale, Marina, Sand City, Seaside, Salinas, Gonzales, Greenfield, parts of unincorporated Monterey County, Paso Robles, Santa Maria, Isla Vista, and parts of unincorporated Santa Barbara County.
• While participation rates indicated in Table 6 appear low in Monterey and San Benito Counties at only 2 applicants for every 1,000 customers, data from the California Energy Commission and DMV show EYR incentives helped fund 11-12% of all new EV purchases in Monterey, San Luis Obispo, and Santa Cruz Counties. In San Benito and Santa Barbara Counties the impact share was 7% and 6%, respectively. • Commercial customer participation in charging infrastructure lags behind single family home residential participation.

RECOMMENDATIONS
• Continue targeted marketing and outreach.
– Develop culturally sensitive, multilingual materials for underserved areas with low participation. – Use community centers, libraries, local media, and social networks to raise awareness about program benefits.
– Enhance tracking of marketing and advertising analytics across programs. – Broaden partnerships with local community-based organizations in hard-to-reach areas. – Engage with dealers, contractors, and installers to leverage their outreach efforts. • Deepen data analysis to better understand participation barriers. Gather feedback from residents and stakeholders in low participation census tracts to adapt and refine program strategies based on their needs.
– Use our internal data warehouse, customer information, visualization tools, and census tract data to pinpoint charging deserts:

1. Identify areas suitable for commercial and office park charging to support mid-day (solar charging hours) charging.

2. Identify areas suitable for neighborhood charging solutions to support multifamily residential charging opportunities.

3. Identify commuter and transit charging opportunities. • Identify gaps in fast charger infrastructure based on local and regional EV readiness plans. Focus on Federal Highway Administration Alternative Fuel Corridors in the Central Coast region to align with upcoming federal and state funding opportunities.
• Utilize DMV data sets and other, comprehensive vehicle data available within our service territory to explore the impact of our rebate program across total number of new EVs purchased/lease in one fiscal year.

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19 CENTRAL COAST COMMUNITY ENERGY

ELECTRIC BUS
FY 2022-23 saw the 4th iteration of 3CE’s Electric Bus Program. This year was the first to expand bus rebates beyond public schools & school districts to include agriculture worker transportation. FY 2022-23 had a $1.4 million USD budget, with a target allocation of $800,000 USD for Schools/School Districts and $600,000 USD for Ag Transport businesses.

County Name Number of Buses Total funds distributed FY 2022-23 Monterey County 5 $675,000.00 USD
San Luis Obispo County 1 $200,000.00 USD
Program Goals
• Increase electric bus and transportation electrification adoption across 3CE service area.
• Expand distributed storage and distributed energy resource penetration with potential resource participation in future load management programs. • Reduce GHG emissions from buses, as well as eliminate harmful pollutants emitted by traditional diesel buses near vulnerable populations, including children and farmworkers.
01 PROGRAM ACCESS
Total applications approved:
2 Participation by County:

See Table 12
02 INCLUSIVE INVESTMENT
Total incentives paid:
6 Total funds distributed:
$875,000
Participation by County:

See Table 12
Table 12: FY 2022-23 Electric Bus incentives distributed by county.

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2022-2023 ENERGY PROGRAMS PORTFOLIO EVALUATION 20

OBSERVATIONS
• While the allocated $800,000 USD for school districts was distributed in FY 2022-23, there were no applicants for agricultural worker transport buses. Significant interest from transit agencies reflects state policies requiring fleet electrification and the need for research. • Funding for the six projects funded in FY 2022-23 was reserved in previous fiscal years – five applied during FY 2021-22 and one during FY 2020-21. The delay in bus delivery signifies ongoing supply chain issues with bus manufacturers.
• FY 2022-23 saw only two new applications for electric school buses, in comparison to nine applications during FY 2021-22. This decrease can be addressed through additional outreach to school districts who have yet to apply for electric bus rebates through 3CE. • Uncertainty with future state funding allocations for electric buses may deter potential applicants.

RECOMMENDATIONS
• Expand program to include transit agencies. Conduct direct outreach to fleet managers. • Continue to foster relationships with CBOs that support agricultural and farmworker agencies. • Where appropriate, require 3CE logo on newly delivered electric buses to spread awareness of the program.
• Solicit information from applicants regarding their existing electric bus fleet and charging infrastructure.

This data can serve to foster knowledge sharing between districts and help identify opportunities for load management opportunities, including Vehicle to Grid (V2G) charging stations. • Develop metrics to gauge the number of people using electric buses, considering factors such as ridership and route improvements. Work with transit agencies and local air districts to better measure public health benefits of electric buses and connect them to our mission. 03 CLIMATE IMPACT
Annual estimated
GHG emissions reduction:
118 metric tons CO2e
$/GHG avoided investment:
$7415 per metric ton CO2e
Equity Incentives Delivered:
100%
Title 1 School Designation:
6 Projects

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21 CENTRAL COAST COMMUNITY ENERGY
01 NEW CONSTRUCTION ELECTRIFICATION
The New Construction Electrification Program incentivizes developers to construct all-electric multi-family and single-family housing projects across the 3CE service area. In 2022-23 the program also provided, for the first time, incentives for private homeowners to build all-electric ADUs and to rebuild homes after a governor-declared natural disaster. This program provides funding reservations on a first come-first-served basis. The program budget was $1.5 million.

Multi-family
Single-family
ADUs
213
24 12
Program Goals
• Reduce greenhouse gas emissions associated with new housing. • Reduce cost of electrification retrofits for existing housing. • Stimulate the local economy by incentivizing construction and increasing housing stock.
• Incentivize:
– 25 all-electric Accessory Dwelling Units
– 200 all-electric Farmworker Housing Units
– 350 all-electric Affordable Housing Units

PROGRAM ACCESS
Total number of
applications approved:
16 Total measures paid:
249 units
Participation by county
see Table 13
02 INCLUSIVE INVESTMENT
FY 2022-23
Total funds distributed:
$615,750
Participation by County:

See Table 13

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2022-2023 ENERGY PROGRAMS PORTFOLIO EVALUATION 22
County Units Built Funds Distributed
Monterey 97 $245,000 USD
San Benito 24 $6,000 USD
San Luis Obispo 68 $155,750 USD
Santa Barbara 60 $155,000 USD
TOTAL 249 $615,750 USD
Table 13: FY 2022-23 NCEP incentive funding by county

OBSERVATIONS
• 88% of FY 2022-23 goal was met to incentivize new ADUs. Twenty-two units were incentivized, totaling $110,000 USD.
• 54% (188 units) of the set goal to incentivize 350 all-electric affordable housing units was met, totaling $522,500.00 USD. 49 market rate units were funded as well, totaling $105,750. Additional outreach to affordable housing developers is needed to increase affordable and farm worker housing units incentivized and tailor our program offerings accordingly. 02 CLIMATE IMPACT
313 metric tons CO2e
Multi-family Units:
50 metric tons CO2e
Single-family Units:
239 metric tons CO2e
Accessory Dwelling Units:
25 metric tons CO2e
Multi-family Units:
$2,227 per metric ton CO2e
Single-family Units:
$1,212 per metric ton CO2e
Accessory Dwelling Units:
$2,423 per metric ton CO2e

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23 CENTRAL COAST COMMUNITY ENERGY

RECOMMENDATIONS
• Increase engagement with housing authorities, developers, financers, lenders, contractors, and member agencies to increase awareness of the program.
• Implement expansion of the NCEP to all development to accelerate the construction of all electric housing units within our service territory and thereby reduce associated GHG emissions. Stratify rebate amounts based on type of development, with additional funds going to support all-electric low-income, transitional housing, and farmworker housing construction. • Explore expansion of the NCEP program to target remodel and retrofit of existing affordable housing facilities.
• Set normalized housing development targets for our service territory based on the Regional Housing Needs Allocation Study (RHNA). Periodically review these targets to set annual goals for program participation.
11 https://abag.ca.gov/our-work/housing/rhna-regional-housing-needs-allocation

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2022-2023 ENERGY PROGRAMS PORTFOLIO EVALUATION 24

ELECTRIFY YOUR HOME
The Electrify Your Home (EYH) program aims to address decarbonization in existing residential buildings by providing midstream incentives to contractors for the replacement of fossil fuel appliances (HVAC and domestic hot water heaters) with all-electric appliances using heat pump technology. Program incentives reduce the overall project cost to the customer and help contractors generate more business. 3CE partnered with the statewide TECH Clean California Initiative to leverage state funding resources and workforce education and training opportunities.

Program Goals
• Increase electric heat pump adoption within 3CE service area. • Increase contractor and customer awareness of heat pump technology and its economic and environmental benefits.
• Reduce GHG emissions from homes and improve indoor air quality related to fossil fuel appliances.
• Stimulate local economy through TECH Clean California training and project opportunities.
01 PROGRAM ACCESS
Total number of
applications approved:
243
Total measures approved:
285
Single-family heat pump HVAC
221
Single-family heat pump
water heaters
32 Multi-family heat pump
water heaters
32 Participation
by Jurisdiction:
see Table 14

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25 CENTRAL COAST COMMUNITY ENERGY
Jurisdiction Applications 3CE Residential Accounts

1. Santa Cruz County 84 48,169

2. Santa Cruz 41 20,163

3. Monterey County 27 36,005

4. Pacific Grove 19 7,529

5. Santa Barbara County 19 43,283

6. San Luis Obispo 15 20,064

7. Monterey 9 12,052

8. Scotts Valley 6 4,241

9. Morro Bay 5 5,725

10. Salinas 5 37,876

11. Seaside 3 9,732

12. Marina 2 7,627

13. Paso Robles 2 11,568

14. Arroyo Grande 1 7,106

15. Capitola 1 4,940

16. Carmel 1 3,039

17. Goleta 1 11,352

18. Soledad 1 4,013

19. Watsonville 1 11,964
TOTAL 243
Table 14: FY 2022-23 Electrify Your Home Participation by Member Agency Jurisdiction

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2022-2023 ENERGY PROGRAMS PORTFOLIO EVALUATION 26
Figure 2: Heat Map of Electrify Your Home Applications across the 3CE Service Area

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27 CENTRAL COAST COMMUNITY ENERGY
Budget:
$1.6 M
FY 2022-23
Total incentives paid:
$848,000
Income-qualified
applications approved:
3 % of total applications
approved:
1%
Income-qualified
incentives paid:
$46,700
% of total budget:
3%
Equipment Type Median Cost
HP HVAC Mini/Multi Split $15,633
Packaged Unitary Equipment $29,747
Split Unitary Equipment $18,851
HP HVAC Median $16,706
HPWH 45 gal. $7,523
46 gal. $6,625
59 gal. $7,926
64 gal. $6,200
67 gal. $16,229
72 gal. $5,500
75 gal. $8,969
82 gal. $14,950
HPWH Median $7,750
Table 15: FY 2022-23 Electrify Your Home median project cost by equipment. 02 INCLUSIVE INVESTMENT

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2022-2023 ENERGY PROGRAMS PORTFOLIO EVALUATION 28

OBSERVATIONS
• Contractor endorsement and education generates program participation. Areas in which individual contractors champion the program and technology selection saw greater participation. • Availability of qualified contractors impacts program participation. Many 3CE customers have been unable to find local contractors willing to install Heat Pump Water Heaters. Some customers opted to engage non-network contractors and assist them in joining the TECH Clean California program. • Most single-family heat pump projects were HVAC, not water heater projects. • The launch of 3CE’s EYH program generated a 500% increase in TECH Clean California applications within 3CE’s service territory.
• The marked increase in applications for 3CE’s EYH program during Summer 2023 ($1.17 million over a five-month period) coincided with TECH’s statewide relaunch and 3CE’s EYH outreach campaign. • Increasing the project cap from $100,000 to $200,000 helped many multifamily projects become economically viable.
• Additional state and local policies may serve to promote electrification as a business case that is mandatory. 3CE will follow these regulations closely and continue to prioritize affordability for all customers.

RECOMMENDATIONS
• Monitor adoption of Grid-Connected Heat Pump Water Heaters and explore potential for demand management programs.
• Given the significant median cost of home electrification projects indicated, and relatively low program participation from income-qualified customers, develop a Direct Install Program that would complete electrification and energy efficiency measures for low-income households at little or no cost to the customer.
• Seek partnerships with local trade and workforce development programs specializing in HVAC or Heat Pump Water Heater installation. Development of a trained workforce capable of promoting and installing these units is critical to their widespread adoption. • Recommend establishing an electrification trades program at high school/junior college level to spark interest and provide essential skills for careers in EV and electric home technologies. 03 CLIMATE IMPACT
Annual estimated
GHG emissions reduction:
211 metric tons CO2e
GHGs for each measure
Single-family heat pump HVAC:
150 metric tons CO2e
Single-family heat pump
water heaters:
40 metric tons CO2e
Multi-family heat pump
water heaters:
22 metric tons CO2e
$/GHG avoided investment
Single-family heat pump HVAC:
$1,786 per metric ton CO2e
Single-family
heat pump water heaters:
$4,535 per metric ton CO2e
Multi-family
heat pump water heaters:
$3,254 per metric ton CO2e

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29 CENTRAL COAST COMMUNITY ENERGY

AGRICULTURAL ELECTRIFICATION
The Agricultural Electrification Program encourages the agricultural sector to switch from fossil fuel-powered to electric-powered industrial equipment. Incentives are stratified by size and GHG avoidance potential and have helped to purchase electric irrigation pumps, tractors, and forklifts.

Qualifying projects fall into two groups: Group 1 consists of smaller equipment, while Group 2 offers higher incentives for large equipment that significantly reduces greenhouse gas emissions. Group 2 incentives are also available to small businesses and cover up to 90% of the project cost. 3CE’s Agricultural Electrification program reduces GHG emissions and supports the local economy. Projects also improve air quality for agricultural workers. In the FY 2022-23 program, there was a total incentive budget of $2 million USD.

Program Goals
• Reduce GHG emissions in the agricultural sector.
• Encourage consideration of new technologies and applications of existing technologies to the agricultural sector
Total number of
applications approved:
28 Total measures
approved:
32 Group 1 equipment
measures approved:
26 Group 2 equipment
measures approved:
6 FY 2022-23
Total incentives paid:
$732,555
Participation by
number of active
customers:
see Table 16
Equity Incentives delivered:

77.8% of total
Small business designation:
21 applicants
03 03

PROGRAM ACCESS

INCLUSIVE INVESTMENT

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2022-2023 ENERGY PROGRAMS PORTFOLIO EVALUATION 30
County Electric Ag Applications Incentives
Monterey County 8 $197,692
San Benito County 2 $25,000
San Luis Obispo County 2 $23,543
Santa Barbara County 4 $237,500
Santa Cruz County 12 $248,819
TOTAL 28 $732,554
Table 16: Incentives distributed for electric ag applications in FY 2022-23 shown by county.

OBSERVATIONS
• Staff anticipated greater participation in proportion to the density of agricultural operations within our communities.
• $700,000 (35%) of the $2 million budget was expended. • Small Business applicants accounted for nearly 80% of all incentives paid out in FY 2022-23; however, only four of the incentives were for Group 2 equipment. • During FY 2022-23, 67% of all applications were approved compared to a 64% approval rate in FY 2021-22. In some cases, delays surrounding supply chain issues and utility upgrades have led to extended timelines and project cancellations.
03 CLIMATE IMPACT
515 metric tons CO2e
Group 1 applicants
15 metric tons CO2e
Group 2 applicants
31 metric tons CO2e
Group 1 applicants
$1,673 per metric ton CO2e
Group 2 applicants
$1,978 per metric ton CO2e
Annual estimated
GHG emissions reduction:

Annual estimated
GHG emissions reduction:

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31 CENTRAL COAST COMMUNITY ENERGY

RECOMMENDATIONS
• Meet with past rebate recipients, agricultural customers, Resource Conservation Districts, California Air
Resource Board staff, and CBOs to identify needs and
participation barriers for small agricultural businesses. • Further tailor programs to customer needs. Test
assumption that Group 2 investments are appropriate
for our customers and whether outside economic drivers
may delay capital investments.
• Evaluate feasibility of electrification and current
infrastructure conditions for remote field operations,
including DCFC charging potential required for Level 2
equipment.
• Require large equipment to have load management
capabilities to support future demand response
programs offered by 3CE.
• Set participation goals based on density of
agricultural operations in each county and strategically direct outreach activities, including fully integrated
Spanish application options.

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2022-2023 ENERGY PROGRAMS PORTFOLIO EVALUATION 32

BROADBAND ACCESS INITIATIVE
During Fiscal Year 2022-23, 3CE funded two broadband grant programs for the City of Watsonville and the City of Goleta to support digital equity initiatives. As recognized in 3CE’s Underserved Communities Outreach and Engagement Plan, buildout and access to broadband infrastructure is critical to 3CE’s core mission of reducing GHG emissions, promoting the adoption of fuel switching technologies through electrification programs, and stimulating the local economy.

Broadband is not only important for education, business activities, employment opportunities, and economic development, it is increasingly recognized as critical to the energy utility sector and its need to provide access to metering data, enable customer participation in energy programs, and increase customer communication and engagement. This is particularly true for programs that require access to and/or communication with customer-sited “smart devices”, such as thermostats, EV charging infrastructure, water heaters, and batteries to support demand response and load modification activities. As 3CE continues to explore load management program offerings, broadband access remains an essential component of these programs’ success.

Each awardee received a one-time, up-front grant of $75,000.00 USD to fund digital equity-related initiatives. The City of Goleta is funding six cohorts of digital basics courses and distributing 75-100 laptops free of charge to those who successfully complete the courses. The City of Watsonville is funding 25 seniors and small group digital fluency trainings, as well as three cohorts of digital fluency courses offered to immigrant families and small business owners through the 3CE broadband grant.

DEMAND RESPONSE
In FY 2022-23 3CE partnered with OhmConnect, a software platform that helps customers monitor their energy consumption and manage home appliances connected to the internet to achieve load shifting in support of a reliable, renewable grid. Participating customers can lower their electricity bill by reducing their energy use when the grid is facing high demand and energy is most expensive.

OhmConnect issues email and SMS alerts prior to and during peak energy hours, which are typically on weekdays between 4 p.m. and 9 p.m. The company offers customers rewards for voluntarily reducing consumption during these periods. OhmConnect aggregates the energy savings from all participants and sells it into various energy markets. The proceeds enable OhmConnect to pay its users for their contribution to balancing the state’s energy demand.
3CE works with OhmConnect to create marketing materials and a tracking dashboard. 3CE informs its customers about OhmConnect through quarterly email outreach, social media, community groups, monthly e-newsletters, content shares to Member Agencies, and a website landing page.

Since launching the partnership in August 2023, 3CE has run two OhmConnect email campaigns. The first achieved a 90.22% open rate and 52.68% unique open rate from 3CE’s shared Pacific Gas and Electric (PG&E) customers. Emails sent to 3CE’s shared Southern California Edison (SCE) customers achieved a 108.99% open rate and 61.12% unique open rate. The second email campaign, launched in November 2023, achieved a 94.2% open rate and 54.75% unique open rate from PG&E customers, and a 118.35% open rate and 64.81% unique open rate from SCE customers.

The OhmConnect webpage on 3CE’s website has reached 5,503-page viewers, leading to a 49% page-viewer-to-signup rate. “Signups” occur when customers take the initial step of providing their name and information to OhmConnect. Since launching the partnership, 2,034 3CE customers have fully enrolled in the service by registering their utility accounts with OhmConnect. 3CE continues to encourage customers to participate in OhmConnect’s service by including information on 3CE’s website, social media channels, content share, and e-newsletter. The next OhmConnect enrollment campaign will be launched in March of 2024.

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33 CENTRAL COAST COMMUNITY ENERGY
VI. MEMBER AGENCY

PROGRAMS

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2022-2023 ENERGY PROGRAMS PORTFOLIO EVALUATION 34

CHARGE YOUR FLEET
The Charge Your Fleet program provides 3CE Member Agencies with incentives for the purchase and construction/installation of electric vehicle service equipment (EVSE) including the EV readiness work, such as panel upgrades, required to install chargers at Member Agency sites.

County Jurisdiction EV Charging Ports Incentives
Monterey County of Monterey 8 $ 20,000.00
San Luis Obispo City of San Luis Obispo 9 $ 24,048.75
Santa Cruz
City of Santa Cruz
City of Capitola
City of Watsonville
41 $ 164,105.14
TOTAL 58 $ 208,153.89
Program Goals
• Reduce GHG emissions.
• Increase EVSE in 3CE’s service area.
• Accelerative EV adoption for municipal fleets by incentivizing purchase and installation of EVSE.
• Provide demonstration project/educational opportunities for agency staff and communities about transportation electrification by increasing EVSE adoption, awareness, and visibility.
02 PROGRAM ACCESS
Total number of
applications approved:
12 Total measures approved:
58 Level 2 EV charging ports:
56 Direct current fast charging ports:
2 Total Incentives Paid
$208,154
02 INCLUSIVE INVESTMENT
Table 17: Charge Your Fleet FY 2022-23 applicant and incentive amounts by county/jurisdiction.

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35 CENTRAL COAST COMMUNITY ENERGY

OBSERVATIONS
• 58 of 153 planned charging ports were completed in FY 2022-23. 38 are publicly available. • The number of Member Agencies applying for funds in FY 2022-23 increased significantly from the previous fiscal year, which is attributed to increased outreach. In 2023, 88 meetings were conducted with member agency staff members to encourage participation. 3CE promoted Charge Your Fleet through the Quarterly Updates, Transportation Electrification Working Group, and individual meetings.

All active participants applied to the program after a 3CE representative informed them about the program.
• All five Member Agencies who applied for funds in FY 2022-22 reapplied in FY 2022-23. • Large-scale EVSE applicants are encountering substantial delays due to essential civil and electrical upgrades on both the customer and utility side of the meter. Because of high demand, utility work can take two years or longer to complete.

RECOMMENDATIONS
• Facilitate introductions between Member Agencies experienced with procuring EVSE and those seeking guidance. Facilitate valuable knowledge-sharing opportunities to create awareness and understanding of important considerations in procuring EVSE. • Explore enrollment of eligible charging devices in future 3CE load management and demand response programs. By enrolling eligible charging devices in such programs, Member Agencies can actively participate in balancing the electricity grid while potentially gaining financial benefits through energy credits or incentives.
• Consider alternative economic models including potential 3CE asset ownership to further assist in deploying charging stations at Member Agency sites.

ELECTRIFY YOUR FLEET
The Electrify Your Fleet Program provides 3CE Member Agencies with incentives for the purchase or lease of light duty, medium duty, and heavy-duty battery electric vehicles (EV).

Program Goals
• Reduce GHG emissions.
• Accelerate EV adoption for municipal fleets.
• Provide demonstration project/educational opportunities for agency staff and communities about transportation electrification by increasing EV adoption, awareness, and visibility.

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2022-2023 ENERGY PROGRAMS PORTFOLIO EVALUATION 36

PROGRAM ACCESS

CLIMATE IMPACT
01 03
Total number of applications
approved:
16 Total measures approved:
58 Light-duty EV:
56 Medium-duty EV:
1 Heavy-duty EV:
1 Participation
by number of
active customers:
see Table 18
County EVs Incentives
Monterey 2 $228,177
San Benito 0 0
San Luis Obispo 8 $40,000
Santa Barbara 36 $429,000
Santa Cruz 12 $60,000
TOTAL 58 $757,177
02 INCLUSIVE INVESTMENT
Table 18: EYF incentives by county, FY 2022-23
296 metric tons CO2e
12 metric tons CO2e
Medium Duty EV
41 metric tons CO2e
Heavy Duty EV:
85 metric tons CO2e
Light Duty EV:
$1,672 per metric ton CO2e
Medium Duty EV:
$5,505 per metric ton CO2e
Heavy Duty EV:
$2,929 per metric ton CO2e
Annual estimated
GHG emissions reduction Average GHGs avoided $/GHG avoided

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37 CENTRAL COAST COMMUNITY ENERGY

OBSERVATIONS
• California’s Advanced Clean Fleets Rule, which requires 50% of new vehicle purchases to be Zero Emission Vehicles (ZEV) in 2024 and 100% by 2027 has encouraged member agencies to take advantage of available incentives.
• Light-duty EVs significantly outpace the adoption of medium and heavy-duty electric vehicles.

RECOMMENDATIONS
• Continue targeted one-on-one outreach with Member Agencies to encourage program participation and understanding of CARB’s Advanced Clean Fleet regulation. • Consult with member agency staff members to better evaluate adoption barriers and municipal use cases for medium and heavy-duty fleet EVs.

PLAN YOUR FLEET
Plan Your Fleet (PYF) Program helps Member Agencies plan for fleet-wide zero-emission vehicles and charging infrastructure. Member Agencies are eligible to receive a range of services tailored to their specific goals and needs, including EV Fleet planning, funding, and financial guidance, and/or recommendations, designs, and engineering for EV charging.

City of Monterey City of Santa Maria City of Capitola
Anticipated EVs 188 320 46
Anticipated EVSE 87 146 24
Est. Fuel Savings 95,000 gallons/year Unknown 12,720 gallons/year Est. GHG Reduction 795 MTCO2e Unknown 113 MTCO2e
Program Goals
• Enable deployment of Member Agency fleet electrification and associated EV charging infrastructure projects.
• Facilitate maximum operational cost savings to fleet managers with guidance, analysis, and trial use of charging management solutions.

Applications
Approved:
3 Fleets Receiving
Support:
3 Fleet Replacement
Plans:
1 Charging Infrastructure
Plans:
3 IMPACT SUMMARY

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2022-2023 ENERGY PROGRAMS PORTFOLIO EVALUATION 38

OBSERVATIONS
• 3CE had not anticipated that many applicants would need site plans, as-builts, and electrical single-line diagrams, which are a prerequisite to creating electrical engineering designs for EV charging infrastructure. Completing these tasks added time and expense to services provided by engineering sub-consultants.

RECOMMENDATIONS
• Structure program funding to accommodate multi-year projects. • Explore expanding to cover technical support for projects in their earliest stages. • Recommend and prioritize smaller scale EV charging projects and charging management software where feasible to avoid facilities exceeding electrical service limitations and offset lengthy delays associated with upgrades.

REACH CODES
3CE’s Reach Code Program provides technical support to Member Agencies for the development and adoption of Building Electrification and Electric Vehicle (EV) Infrastructure “reach” codes, which are building codes that go beyond current California standards to require electrification.

Program Goals
• Assist municipalities and authorities having jurisdiction in the adoption and implementation of Reach Codes to advance building and transportation electrification in 3CE member agency jurisdictions.
• Reduce GHG emissions related to the construction and operation of buildings and transportation in 3CE service area.

IMPACT SUMMARY
• The City of Santa Cruz readopted their new reach code on November 28th of 2022 and the City of San Luis Obispo readopted their new construction reach code on October 3rd of 2023. • Preliminary discussions were held with the cities of San Luis Obispo, Santa Cruz, Watsonville, and San Juan Bautista.

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39 CENTRAL COAST COMMUNITY ENERGY

OBSERVATIONS
• Pending legal challenges to reach code adoption has stalled participation in 3CE’s program. • Concerns regarding grid reliability are routinely raised in opposition to reach codes standards.

RECOMMENDATIONS
• Expand metrics for program evaluation to include GHG emissions reductions for buildings permitted post-reach code adoption as compared to non-reach code buildings of similar size and scale. • Explore the development of Building Performance Standards codes and enhanced support for Member Agencies’ evaluation and outcomes reporting.
• Explore increasing education and public awareness, especially in underserved areas, regarding electrification.

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2022-2023 ENERGY PROGRAMS PORTFOLIO EVALUATION 40
VII. FINDINGS &

RECOMMENDATIONS

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41 CENTRAL COAST COMMUNITY ENERGY

FINDINGS
Electrify Your Ride
The Electrify Your Ride (EYR) program has demonstrated remarkable success across various metrics, achieving its goals, adhering to budgetary constraints, and garnering significant participation, particularly from income-qualified individuals. Nearly 10% of all electric vehicle purchases in 3CE’s service territory were influenced by EYR. Furthermore, the program stands out in terms of its cost-effectiveness, boasting a favorable ratio of dollars invested to greenhouse gas avoidance relative to other more costly, longer lead time programs. These achievements underscore the need to not only sustain but also expand upon the success of the EYR program.

However, a nuanced analysis reveals areas for improvement, notably, disparities in participation rates showing lower engagement levels within CalEnviroScreen 4.0 designated underserved communities.

Vehicle availability and higher costs associated with purchasing an EV pose a barrier to wider adoption in underserved communities. The discrepancy in costs, evidenced by an average EV cost of $53,469 in July 2023 in California, compared to $48,300 for all cars indicates a need for targeted work in communities that have historically lower participation in EV rebate programs.11 The combination of the high initial cost of EVs and insufficient charging infrastructure in certain communities impacts EV adoption. Policies offering additional incentives for lower-income households and capping rebates for different income groups have led to a positive shift, increasing the share of rebates distributed to low-income groups and disadvantaged communities.

Enhanced Geographic Information System (GIS) analysis, specifically focusing on identifying clusters of rebate applicants, may assist in understanding and addressing these challenges. Understanding how these clusters influence neighboring communities, particularly those with lower incomes, is essential to increase equitable participation and provide targeted outreach opportunities.

Previous research on electrification rebate programs has revealed a substantial negative relationship between the proportion of Hispanic and African American residents and the number of rebates received per household, even when controlling for income.12 The identified disparities emphasize the need for a more comprehensive examination of equity metrics, such as those outlined in CES 4.0 factors and Justice 40 designations, to better capture participation rates and the barriers that certain communities continue to face.
3CE’s strategic focus will be in removing the charging infrastructure barrier, which will include finalization of the Planning for Action Regional Transportation Electrification and Zero Emissions Blueprint work. The objective is to explore the expansion of charging infrastructure while ensuring widespread accessibility.

Furthermore, our strategy aligns with the California Energy Commission’s (CEC) commitment to investing $28 million in a project dedicated to installing charging stations in low-income communities.13 Leveraging the CEC tools and approach can maximize 3CE’s impact within our service territory.

Electrify Your Home
Participation in the EYH program experienced a significant boost when state TECH rebates became available, leading to a substantial increase in applications. Most applicants, however, resided in more affluent areas, indicating a potential disparity in accessibility. The program appears to be appealing to homeowners, while multi-family residences present a more challenging demographic to attract, contact, and convince of the necessity for investment in electrification.

To address this challenge, staff proposes to evaluate the feasibility of implementing direct install programs tailored specifically for income-qualified customers. Furthermore, collaboration with engaged Community-Based Organizations already engaged in this work can potentially accelerate deployment of electrification to a greater diverse demographic while considering energy burden impacts. The focus on income-qualified customers aligns with 3CE’s Boards’ commitment to equitable access and inclusivity.

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2022-2023 ENERGY PROGRAMS PORTFOLIO EVALUATION 42
Furthermore, 3CE recognizes the need for outreach, education, and training to support the installation of all-electric appliances. Identifying high school, community college, and labor training programs can help support the future electrification workforce needed and promote local economic development through job creation and skill enhancement.

Agricultural Electrification
Addressing agricultural electrification requires a tailored approach and direct customer communication within the farming community. Understanding the specific equipment needs of farming operations is paramount to the success of the program. This involves engaging in conversations with farmers to identify the equipment that is most crucial for their operations and ensuring that 3CE’s electrification programs align with their practical needs.

Additional meaningful engagement can facilitate a better understanding of operational needs and barriers to adoption. This engagement should be available in multiple languages, provide education regarding opportunities, and evaluate the level of electrification investment appropriate for Central Coast agricultural businesses.

An additional evaluation area is the lack of charging and transmission/connection capacity in rural areas.

Assessing the extent to which this factor influences the adoption of agricultural electrification is essential for developing effective solutions. This may involve collaborating with Investor-Owned Utilities (IOUs) and Community Based Organizations (CBOs) in the region to advocate for and enhance charging infrastructure in rural agricultural areas.

Insights on Demand Response & Technical Assistance Programs Evaluating 3CE-program-supported-equipment’s future participation in demand response and load management programs can help ready agency programs for providing customers with greater control of their energy use and cost.

Evaluating the potential for vehicle-to-grid (V2G) technology, for example, requires an understanding of the barriers to participation and assessing the readiness of our electric buses that have already been funded.

Many buses are already equipped with Wi-Fi capabilities, making them potentially suitable for load shifting activities. Supporting regulatory efforts at the California Public Utilities Commission and the California Energy Commission (CEC) will be essential shaping future opportunities for V2G technologies to provide a positive impact for customers and California’s grid.

In the realm of technical assistance programs, adjusting programs to allow customers and member agencies to hire their own consultants provides flexibility and empowers applicants to initiate projects on their terms. This approach can streamline the process, letting projects commence when applicants are ready and facilitating preferred vendor relationships.

Outreach, Education, and Equitable Investment
To deepen our understanding of community needs and identify potential gaps, the project to update the agency’s Underserved Communities Outreach and Engagement Plan currently underway, serves as a valuable avenue for listening to communities and integrating their insights into program design and goals. Staff are currently gathering additional feedback in support of new operational recommendations to achieve greater engagement with underserved communities.

In FY 2022-2023, increases in Energy Programs applications were correlated with coordinated outreach efforts and advertising dollars. While this relationship can be demonstrated with Electrify Your Ride, Electrify Your Home, and Ag Electrification programs, more sophisticated advertising tracking and website and program application analytics are needed to tie advertising dollars more precisely to program applications.

Equitable investment requires a broader and more inclusive approach than reflected by traditional participation metrics. Multifaceted equity metrics can play a central role in ensuring that the impact is

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43 CENTRAL COAST COMMUNITY ENERGY
comprehensive and inclusive. 3CE’s diverse region and high cost of living create a potential for significant energy burden on customers and a concerning potential for hidden energy poverty in seemingly affluent regions. Leveraging energy equity metrics across new categories may provide additional perspectives that can be valuable in program development.

The tracking of regulations, legal challenges, and technological advancements is integral to informed communication with customers and continuous improvement of program design. This proactive approach helps in adapting programs to a changing external environment, fostering transparency, and building trust among participants.

Additional Considerations
Addressing the underspending in the budget requires proactive measures, highlighted for example in the New Construction Electrification Program. As member agencies achieve their housing goals, there is an opportunity to support them in transitioning to all-electric solutions for affordable housing, market-rate housing, and Accessory Dwelling Units (ADUs). Expanding eligibility criteria is a strategic move to ensure that investments align with community needs. Furthermore, exploring ways to make these investments equitable and accessible to vulnerable communities within our service territory is crucial for fostering a broader impact.

In general, there is a need for improved metrics and measurable goals. Establishing a robust tracking mechanism between outreach activities and the application process is essential for understanding the efficacy of engagement efforts. Investing in better data collection and analysis tools, such as a data warehouse, CRM vendor, and external datasets like DMV records, can significantly enhance the ability to measure program impact, identify participation gaps, and explore new avenues to better serve customer needs. Leveraging technology and external data sources ensures a comprehensive and data-driven approach to program assessment.

Considering the dynamic landscape and technological advancements, it is crucial to analyze where to direct efforts to maximize community impact through our energy programs. Seeking innovative ways to reach underserved communities, critically evaluating past performance, and embracing flexibility in response to changes are essential components of staying ahead in the evolving energy landscape.

RECOMMENDATIONS
Equity Initiatives
• Further examine operationalizing energy equity initiatives through programs, as well as seek to understand participation barriers through focus groups and surveys as part of the Underserved Communities Outreach and Engagement Update in mid-2024. • Conduct a comprehensive analysis of energy burden and energy poverty within 3CE service territory to help shape future program metrics, design initiatives, and offerings. • Prioritize multilingual accessibility, invest strategically in disadvantaged regions, actively seeking to address unique community needs.
• Explore the implication of a fuel-switching scrap program to better track emission reductions from electrification projects that replace gas-powered technologies.

Program Design, Implementation, and Administration
• Explore additional and expanded program offerings to equitably accelerate electrification (especially in underserved communities), power customers to manage their energy usage, and prepare our electrification workforce of the future.

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• Explore the opportunity to partner with planning departments within our service territory to further promote programs and better track the number of permits for electrification projects compared to gas-powered projects to understand the impact of our rebate programs in total electrification initiatives. • Consider integrating a formal feedback mechanism to gather customer input regularly, ensuring program design and implementation strategies align with community needs. Prioritize relationship building through engagement with local community-based organizations, leaders, and residents for tailored and sustainable program implementation.
• Proactively manage vendors, expand staffing capabilities, and explore opportunities to maximize program automation, reduce repetitive, manual, and administrative staff inputs.

Goal-setting Initiatives
• Continue collaboration with state agencies on energy access and equity initiatives to align program participation goals with broader electrification objectives. – Collaborate regularly with other CCAs to share insights and learn more about program metrics and successful implementation strategies.
• Develop clear, measurable SMART goals for each program aspect, considering normalization of participation data and additional, multifaceted indicators of access to enhance accuracy. – Measure the avoidance of additional criteria pollutants as a result of of fuel-switching rebate programs.
• Consider implementing a flexible system for periodic monitoring and evaluation of progress, accounting for feedback, regulatory changes, and evolving community needs.

Program Outreach
• Strengthening collaboration with the 3CE Outreach team to align messaging and explore outreach and marketing strategies in line with energy equity goals, fostering a unified approach through shared insights.
• Explore the possibility of partnering with external organizations to consider stackable rebate programs for various electrification initiatives, identifying opportunities for co-branding and advertising to enhance program visibility. Leverage existing networks and channels to further promote programs. • Conduct targeted outreach efforts to explore and understand the specific needs of underserved communities, aiming to enhance program effectiveness through a more nuanced understanding. • Apply more robust performance measures and tracking initiatives to all 3CE communications and outreach tactics, including unpaid channels such as website, social media, newsletters, events, and direct-to-consumer conversations. This will help to inform cost-effective and impactful promotional strategies in the regions that will most marginally benefit from it.

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CONCLUSION:

The review of 3CE’s 2022-23 Energy Programs portfolio reveals both important observations and opportunities for growth.

Future iterations of the design, implementation, and evaluation of the agency’s energy programs will explore new strategies to increase accessibility while furthering understanding of sociodemographic barriers to participation. Increased focus on workforce development opportunities and targeted outreach and engagement partnerships with community stakeholders will guide these efforts. 3CE is pursuing new initiatives in its program portfolio such as innovative demand response programs for all customer types, reducing transportation electrification barriers through charger asset ownership strategies, and direct install programs for low-income home electrification.

Engagement in regulatory decisions and legislative policies that impact energy programs will be paramount, as well as continued knowledge sharing with other CCAs, state and local agencies, and community-based organizations to ensure best practices are being utilized across all program offerings.

While many nuances exist throughout the programs and technical assistance offerings, the need to prioritize equity and adaptability in an ever-evolving energy landscape remains constant.

Looking ahead, 3CE must not only enhance quantitative measures in future Programs Portfolio Evaluations, but also elevate its understanding of how these programs resonate within the community. 3CE’s ongoing commitment is to ensure that its energy programs are not only effective in reducing greenhouse gas emissions but are also responsive to the diverse needs of the communities we serve.

As such, feedback from customers, community members, Member Agencies, and Board and Council members will inform future program design, implementation, outreach, budgeting, evaluation, and reporting. Each of these areas will evolve over time to reflect the agency’s learning and priorities.

Please direct comments and feedback to: [email protected]

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2022-2023 ENERGY PROGRAMS PORTFOLIO EVALUATION 46
APPENDIX 1:

GHG Reporting Methodology
For this evaluation, GHG reductions were estimated based on various fuel carbon intensity values12, as well as a 10-year average 3CE Carbon Emissions Factor13 for electricity supply related emissions. When accounting for electricity related emissions, average values were used for passenger vehicles14 as well as buses to determine added kWh Load on a kWh/mile basis. Transportation related emissions reductions were estimated based on California average annual miles driven for both passenger cars as well as buses.

Emissions reductions related to Agriculture Electrification measures were based on customer-stated fuel usage and the associated carbon intensity value. To improve the accuracy of GHG accounting, both N2O and CH4 were included in the carbon intensity to calculate CO2e. Additionally, residential natural gas/ propane was modeled using average residential gas and propane usage data for California.

Passenger Vehicle value unit Source
avg fuel economy-passenger 25 MPG CA DMV, EPA
Miles driven per year 10000 Miles/yr CA DMV, EPA
Tons CO2 per yr (passenger) 4.60 MT/yr CA DMV, EPA
gallons gasoline per year 400 Gal/yr CA DMV, EPA
passenger EV kWh per year 3460 kWh/yr Conversion
School bus value unit Source
avg fuel economy-School bus 6.2 MPG CARB
Avg school bus route 75 Miles CARB
School bus annual miles 13687.5 Miles/yr CARB
gallons gasoline per year 2207.7 Gal/yr CARB
EV annual added kWh 38872.5 kWh/yr Conversion

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47 CENTRAL COAST COMMUNITY ENERGY
Residential NG usage value unit Source
Single family total 44.3 MMBTU/yr 2019 RASS
Water heating 26.137 MMBTU/yr 2019 RASS
Space Conditioning 14.176 MMBTU/yr 2019 RASS
Cooking 2.215 MMBTU/yr 2019 RASS
HPWH eq. 6.35 MMBTU/yr 2019 RASS
HP HVAC eq. 3.44 MMBTU/yr 2019 RASS
added kWh
(whole home) 3,518.41 kWh/yr Conversion
added kWh (HPWH) 1,860.29 kWh/yr Conversion
added kWh (HP HVAC) 1,008.97 kWh/yr Conversion
Multifamily total 24.1 MMBTU/yr 2019 RASS
Water heating 14.219 MMBTU/yr 2019 RASS
Space Conditioning 7.712 MMBTU/yr 2019 RASS
Cooking 1.205 MMBTU/yr 2019 RASS
HPWH equivalent 3.45 MMBTU/yr 2019 RASS
HP HVAC equivalent 1.87 MMBTU/yr 2019 RASS
added kWh
(whole home) 1,914.08 kWh/yr Conversion
added kWh (HPWH) 1,012.03 kWh/yr Conversion
added kWh (HP HVAC) 548.90 kWh/yr Conversion
Residential Propane Usage
Space Conditioning 21.80 MMBTU/yr
U.S. Energy Information
Administration - EIA -
Independent Statistics
and Analysis
Table CE4.10 Annual
household site end-use
consumption by fuel
in the West—averages,
2020
HP HVAC eq. Propane 5.61 MMBTU/yr U.S. Energy Information Administration - EIA
added kWh (HP
HVAC) Propane 1,642.87 kWh/yr Conversion
Gas WH/HVAC efficiency 0.85 % Assumed
Propane HVAC efficiency 0.9 % Assumed
HP WH/HVAC COP 3.5 UEF (COP) Assumed

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Emission factors value unit Source
CCCE EF 0.082300 kg/kWh EPA
Gasoline 8.81 kg CO2e/gal EPA
Diesel 10.39 kg CO2e/gal EPA
Propane - Mobile 5.72 kg CO2e/gal EPA
Natural Gas 53.1148 kg CO2e/MMBTU EPA
Propane - Stationary 63.1238 kg CO2e/MMBTU EPA
12 EPA, 2022
13 3CE IRP, 2020 https://3cenergy.org/wp-content/uploads/2020/09/MBCPA_IRP_2020_v1_PUBLIC.pdf 14 https://www.fueleconomy.gov
15 California Residential Appliance Saturation Survey (RASS), 2019 16 U.S. Energy Information Administration - EIA - Independent Statistics and Analysis Table CE4.10 Annual household site end-use consumption by fuel in the West—averages, 2020

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49 CENTRAL COAST COMMUNITY ENERGY
CONTACT:
3CE NORTHERN OFFICE
70 Garden Court suite 300
Monterey, CA 93940
For all PG&E customers
Email: [email protected]
3CE SOUTHERN OFFICE
71 Zaca Lane suite 140
San Luis Obispo, CA 93401
For all SCE customers
Email: [email protected]

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Staff Report Item 10
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Jenna Espinosa, Manager of Customer Accounts & Services SUBJECT: Approve FY 2024-25 Underserved Communities Outreach and Engagement Action Plan DATE: June 26, 2024
RECOMMENDATION:

This memorandum recommends the Policy Board approve the FY 2024-25 Underserved Communities Outreach and Engagement Plan.

BACKGROUND:

In June 2022, the Policy Board approved the Underserved Communities Outreach & Engagement Plan (the Plan), which was developed to ensure that 3CE services and programs are accessible to all members of the community, including those who have historically been underserved and hard to reach.

The Plan’s express intention is that it be reviewed periodically to ensure it remains up-to-date and reflective of the needs of our communities.

In April 2024, staff provided an update on the implementation of the Plan to the CAC and received input on the development of a prioritized Action Plan for FY 2024-25. On June 5, 2024, the CAC voted to support staff’s proposed FY 2024-25 Action Plan and recommended staff present it to the Policy Board.

DISCUSSION/ANALYSIS:

The Plan's objectives are categorized into four focus areas: (1) Customer Financial Resources; (2) Energy Programs; (3) Customer Feedback loops; and (4) Re-enrollment and Customer Awareness Outreach.

Between November 2023 and May 2024, staff conducted community outreach, collected feedback on accomplishments, and identified key opportunities to improve 3CE’s efforts. Staff held meetings with a cross-departmental team, four community choice aggregators, and nine community-based organizations.

Since the adoption of the Plan, 3CE’s outreach indicates our key accomplishments in the plans four focus areas include:

Customer Financial Resources:
 Launched a farmworker outreach program in partnership with Spanish-language radio. The program reached at least 937 farmworkers with in-person presentations on electricity financial assistance services and 3CE program opportunities.

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 Developed a contact database of social service agencies and community-based organizations who provide bill payment assistance. Staff launched the first integrated financial assistance awareness and cost savings campaign across all in-house communication media, including direct email and social media platforms.
 3CE staff facilitated nine Spanish webinars and maintains a commitment to offer all webinars in both languages.

Energy Programs:
 To promote energy programs to all customers, 3CE’s practices include translation of program flyers, specialized translation of the 3CE website, and focused paid advertising for Spanish speakers.
 In addition to ongoing program-specific information, 3CE translates the Annual Impact Report and other key annual publications.

Customer Feedback:
 A customer survey was conducted in 2023 in Spanish and English. A total of 1,503 interviews were completed.
 Annual evaluations were conducted of the Energy Programs portfolio to modify and enhance energy programs for underserved customers.
 In 2024, staff launched meetings with community-based organizations to gain feedback on the needs of the community and how programs and outreach efforts could be tailored accordingly.

Re-enrollment and Customer Awareness Outreach

1. Reconnecting with customers who chose to opt out of 3CE remains a high priority. To do so, and promote overall agency awareness, staff launched the first bilingual awareness campaign. Staff has also focused on growing the agency’s Spanish-speaking social media presence. Since June 2022, 3CE has received 190,000 impressions on the Spanish Facebook page.

Following the review of accomplishments to date, staff held meetings throughout 3CE service territory with community-based organizations to gain insights on emerging needs and communication tools to elevate our service to the community. Several common themes and recommendations emerged, including:

2. Simplify communications in all languages

3. Ensure material is culturally relevant and linguistically appropriate for all reading levels

4. Cost of living is a top concern

5. Critical need for a climate ready workforce with education and training in all aspects of the environmental and clean energy sectors

6. Consider developing direct install programs, and programs for renters

7. Rely on existing social service agencies and existing community-based organizations with established networks and relationships
Based on these community engagement learnings and two meetings of the CAC, staff compiled an Action Plan to guide 3CE priorities in FY 2024-25. The Action Plan is attached to this staff report and briefly summarized below.

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Proposed FY 2024-25 Action Plan:

1. Increase awareness about customer financial resources by partnering with community-based organizations and five social service agencies, and by hosting sixteen farmworker outreach events.
 Build awareness of 3CE’s competitive rates among community-based organizations, including those providing services to income qualified individuals  Establish relationships and coordinated outreach with one social service agency in each county
 Develop simplified bilingual resources
 Continue to host farmworker outreach program

2. Increases awareness and access to energy programs through processes simplification and partnership with community-based organizations.
 Create a simplified online program inquiry process
 Develop at least one bilingual instructional video
 Partner with community-based organizations to advance awareness and applications  Explore the pilot of direct install program for heat pumps

3. Collect customer feedback and implement changes to remove barriers and improve customer experience
 In partnership with community-based organizations, present 3CE information to focus groups in underserved communities
 Explore opportunities to support career pathways for climate ready professions  Incorporate Spanish-language outreach into the annual customer survey

4. Launch customer awareness outreach and re-enrollment campaigns  Boost social media presence on Spanish and English platforms by increasing the number of posts year-over-year by at least 10%, increasing engagement by at least 10%, and increasing followers by 20%.
 Develop simplified messaging and materials
 Focus on CARE and FERA customers for re-enrollment
 Feature Spanish-speakers in a minimum of two paid promotional campaigns The proposed Action Plan represents staff’s recommended priorities, based on community feedback, for conducting outreach and engagement within underserved communities in the coming fiscal year.

FISCAL IMPACT:

There is no fiscal impact to this report for this fiscal year. Outreach and engagement activities outlined in the Action Plan will be considered as part of next fiscal year’s budget process.

CONCLUSION:

The Action Plan represents a collaborative approach to continued and enhanced operationalization of the Plan based on feedback and input from 3CE customers and community stakeholders.

ATTACHMENT(S):

1. 2022 Underserved Communities Outreach and Engagement Plan

2. Underserved Communities Outreach and Engagement FY 2024-25 Action Plan

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UNDERSERVED

COMMUNITIES

OUTREACH AND

ENGAGEMENT PLAN
2022

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CITY OF

PIS M O BEACH

CITY OF

SOLVANG
CITY
O F

C A L I F O R N I A

THE COMMUNITIES WE SERVE

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INTRODUCTION
This document provides a roadmap for Central Coast Community Energy’s (CCCE) efforts to productively engage with underserved communities.

CCCE staff collaborated with an ad hoc committee of the Community Advisory Council (CAC) to develop a plan addressing (1) how CCCE defines underserved communities; (2) how CCCE engages and supports underserved communities; and (3) what strategies and tactics can improve CCCE’s engagement with underserved communities.

This Plan also acknowledges opportunities to further identify underserved communities and address the unique challenges affecting different target segments. Understanding the complex issues underserved communities face, CCCE anticipates amendments to this plan as our learning develops around best practices.

DEFINING UNDERSERVED COMMUNITIES
Who constitutes an “underserved community?” A clear and inclusive definition of these communities is critical to determining both where to focus engagement efforts, as well as the barriers those efforts seek to overcome.

The following definition was developed through the work of the Community Advisory Council ad-hoc committee (“Committee”) created to assist in the formation of this plan. The Committee reviewed existing statutory definitions, as well as publications by the California Public Utilities Commission, California Environmental Protection Agency, and the California Health and Human Services Agency. In addition, the Committee received input from various stakeholders, local community-based organizations, and neighboring community choice agencies.

DEFINITION
CCCE considers communities to be underserved if they are under-represented in matters discussed by the agency and if their access to public investments, resources, education, and information about energy service is limited. As a rule, these communities face greater barriers to access because of their:
1) Geographic location
2) Cultural and language differences
3) Socioeconomic status
4) Health risks
5) Position within the digital divide
6) Exposure to environmental hazards
This list, while not exhaustive, represents the key barriers CCCE will seek to address in designing its outreach and programs.

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IDENTIFYING UNDERSERVED COMMUNITIES
Where are the underserved communities in CCCE’s service area? Knowing which of our communities meet the definition of underserved will help CCCE target its engagement efforts.

Using the six barriers listed above as its criteria, CCCE examined existing designations, data, and local knowledge to locate vulnerable populations geographically. It is important to note that a spatial analysis alone is inadequate, as communities can also be made up of individuals who share characteristics, but do not inhabit the same locality.

US CENSUS BUREAU, US DEPARTMENT OF AGRICULTURE,
AND THE FEDERAL OFFICE OF RURAL HEALTH POLICY: RURAL COMMUNITIES The Census Bureau offers online tools to locate communities with the highest concentrations of rural populations, as seen in the Census Bureau’s map below based on the 2010 Census. The United States Census Bureau defines “rural” as an area that encompasses all population, housing, and territory not included within an urban area. For reference, “urban areas” consist of two types of geographies:
• “Urbanized Areas” have a population of 50,000 or more. • “Urban Clusters” have a population of at least 2,500 and less than 50,000.

By this standard, however, much of the service area is characterized as rural. Supplementing this data with the Rural-Urban Commuting Area (RUCA) system provides an opportunity to narrow the identification of rural communities.

USDA-Economic Research Service and the Federal Office of Rural Health Policy collaborated to develop the RUCA system. This instrument uses the Census Bureau’s 2010 Urbanized Areas and Urban Clusters in combination with commuting information to characterize the rural and urban status of every census tract nationwide and their relationships. This analysis allows CCCE to locate geographically isolated rural communities burdened by long commutes to urban areas.

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Within the CCCE service area, the following communities, organized by County, are classified as rural:

AB 1550 CALIFORNIA CLIMATE INVESTMENTS PRIORITY POPULATIONS 3.0 BY CENSUS TRACTS Designed by the California Air Resources Board, the California Climate Investments Priority Populations 3.0 by Census Tract Map identifies low-income communities, which are defined in State Assembly Bill 1550 as the following:

“Low-income communities” are census tracts with median household incomes at or below 80 percent of the statewide median income or with median household incomes at or below the threshold designated as low income by the Department of Housing and Community Development’s list of state income limits adopted under Section 50093.

Low-income communities identified by the California Climate Investments Priority Populations

3.0 Census Tract Map that fall within CCCE’s service area may include, but are not limited to the following incorporated and unincorporated communities:

Monterey San Ardo, Big Sur, Greenfield, King City, Jolon, Lockwood, San Lucas, Soledad
San Benito Hollister, Paicines, San Juan Bautista, Tres Pinos San Luis Obispo Paso Robles
Santa Barbara New Cuyama, Buellton, Casmalia, Lompoc, Los Alamos, Los Olivos, Santa Ynez
Santa Cruz Santa Cruz, Live Oak, Aptos, Capitola, Twin Lakes, Pleasure Point, Capitola, Watsonville
San Benito Hollister
Monterey Interlaken, Pajaro, Forest Park, Moss Landing, Prunedale, Castroville, Santa Rita, Salinas, Marina, Sand City, Seaside, Gonzales, Greenfield, Soledad, Bradley San Ardo, Lockwood, San Lucas, Jolon, Chualar Santa Barbara Guadalupe, Santa Maria, Isla Vista, New Cuyama, Carpinteria San Luis Obispo Paso Robles, Morro Bay, San Luis Obispo Santa Barbara

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THE INDICATORS OF BROADBAND NEED
Buildout and access to broadband infrastructure is a critical to the inclusion of underserved communities in CCCE’s core mission of reducing GHG emissions, promoting the adoption of fuel shifting technologies through electrification programs, and stimulating the local economy.

Broadband facilitates customer communications and is a prerequisite for demand response technologies designed to help consumers reduce their energy use.

CCCE programs like Electrify Your Ride reimburse customers for most of the cost to purchase and install EV chargers, including Wi-Fi enabled Level 2 EV Chargers that can reduce charging output in response to signals transmitted during peak load hours. Broadband dependent technologies can provide CCCE, and its customers, access to real time energy use data that supports the transformation of the energy sector to zero-carbon and provides savings to customers, reducing their energy burden.

Communities in need of broadband are also excluded from the recent growth in remote work opportunities. Remote work can serve as an equalizer for caretakers and others who may be priced out of “tech-hubs,” such as Silicon Valley, where 90% of low-income renters are “cost burdened,” meaning they spend more than 30% of their income on housing.

The United States Department of Commerce, National Telecommunications and Information Administration (NTIA) created the Indicators of Broadband Need map to show broadband availability within the United States. Communities in the CCCE service area with 25% or more of households who reported not having access to the internet or a computer, tablet, or smartphone may include, but are not limited to:
• Santa Cruz: Watsonville, Freedom
• Monterey: Salinas, Gonzales, Soledad, Greenfield and its surrounding unincorporated communities, such as Chualar and Harlem.

In addition, this data instrument includes indicators for viewing communities at the census tract level with median fixed broadband speeds below 25/3 (25 Megabits/sec (download) and 3 Megabits/sec (upload), the standard speeds set by the Federal Communications Commission). An approximation of communities with who match this description may include, but are not limited to:
• San Juan Bautista
• Prunedale
• Castroville
• Interlaken
• Logan
• Communities in Big Sur
• South Monterey County
• Communities the Gaviota coast
• New Cuyama
• Unincorporated Santa Barbara County between Santa Maria and the Cuyama Valley.

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U.S. CENSUS BUREAU AND CALENVIROSCREEN 4.0: LINGUISTICALLY ISOLATED COMMUNITIES CalEnviroScreen 4.0 maps linguistic isolation, a term used by the US Census Bureau for limited English-speaking households. More than 40 percent of Californians speak a language other than English at home. About half of those do not speak English well or at all. Linguistic isolation can limit job opportunities and the ability to engage in civic life, navigate health and social services, and law enforcement protections. Lack of proficiency in English may also indicate a community’s ease in providing community input on matters discussed by CCCE.

Within the CCCE service area, the following communities, organized by County, are classified as communities that scored in the 50th percentile or higher in linguistic isolation:

Santa Cruz Watsonville, Interlaken, Unincorporated Santa Cruz County area (zip code 95076), Santa Cruz, Twin Lakes, Live Oak
San Benito Hollister, Unincorporated San Benito County area (zip code 95023) Monterey Salinas, Gonzales, Castroville, Greenfield, Marina, Prunedale, Seaside, Monterey, Unincorporated Monterey County area (zip code 95039) Santa Barbara Guadalupe, Santa Maria, Carpinteria, Isla Vista, Goleta, Unincorporated Santa Barbara County (zip code 93455).

San Luis Obispo San Luis Obispo, Paso Robles

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LOCAL KNOWLEDGE
Conversations with local stakeholders, including member agency staff, community-based organizations, public agencies, and experts demonstrated the need for culturally relevant communication in areas that may not be captured through state and federal indices, but which nevertheless face significant barriers. Examples of such communities include:
• The growing indigenous migrant population on the Central Coast that is widely believed to be underestimated in size. Public agencies and service providers have had limited success counting this population, possibly due to the unique language barrier or a long history of systemic discrimination from non-indigenous populations. The Indigenous Farmworker Study, authored by farmworker researchers--Richard Mines, Sandra Nichols, Anna Garcia and David Runsten and supported by cultural facilitators at the California Rural Legal Assistance Fund, estimates that roughly 27,330 – 41,670 of the Mixteco-speaking farmworker population lives on the Central Coast region, with higher concentrations of this population in Santa Barbara and Monterey Counties.
• Neighborhoods and unincorporated towns too small or informal to be recognized by state and federal identification criteria should not be overlooked. Through discussions with stakeholders to identify other communities who fit the description of underserved, the committee identified the San Jerardo Cooperative, an affordable housing cooperative located south of Salinas, and the town of New Cuyama, located in Santa Barbara County near the intersection of San Luis Obispo, Ventura, and Kern Counties. In addition, Santa Rita is a neighborhood in northern Salinas where many non-federally recognized tribal residents have lived.
• Tribal communities in our service area with which CCCE has yet to establish relationships and regular channels of communication also represent important populations not captured by established census-based tools. CCCE must improve our understanding of these communities’ energy needs. Developing relationships with tribal leaders, identifying opportunities for collaboration, disseminating resources and information, and gathering input from these groups was identified as important components of CCCE’s future engagement efforts.

UNDERSTANDING BARRIERS
Each of the six barriers listed in the CCCE definition of underserved communities deserves a great-er explanation, particularly of how barriers impact populations served by CCCE and stand in the way of effective engagement. This section also discusses communication strategies that can be employed to overcome each barrier.

GEOGRAPHIC LOCATION
Isolated rural communities lack proximity to essential resources, which reduces opportunities for conventional outreach. Lack of proximity to cities and resource hubs can prevent rural residents and businesses from participating in programs that aid with utility bills, home retrofits, and electrification projects. People living in these communities may be discouraged by obstacles that make applying to agency programs more difficult. Obstacles can include lack of broadband access and the amount of travel required to submit applications in person. Lack of proximity also discourages contractors from working on low-income homes in critical need of upgrades that are a prerequisite for some residential energy programs.

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Customers in rural communities may have vastly different energy needs and priorities than customers located closer to urban centers. CCCE service, educational webinars, and energy programs are less of a priority for customers with other pressing concerns, such as the availability of healthy food, safe drinking water, and low-cost housing.

Yet increased awareness of CCCE services in rural communities is vitally important. Rural customers can obtain significant environmental and economic benefits from CCCE programs as well as from energy-focused programs offered by partner agencies.

Awareness of CCCE and its programs also varies according to location. CCCE has provided service to northern communities (Santa Cruz, Monterey, and San Benito Counties) since 2018 and southern communities (San Luis Obispo and Santa Barbara Counties) since 2020 - 2022. Unfamiliarity with CCCE remains high in the recently enrolled communities of San Luis Obispo and Santa Barbara Counties, which creates additional challenges in conducting outreach to underserved populations in these areas.

Strategies:

For rural communities in Santa Cruz, San Benito, and Monterey Counties that enrolled before 2020, the agency’s recent name change to Central Coast Community Energy provides an opportunity to renew education efforts concerning CCCE’s mission and purpose. • Re-enrollment communications for individuals in northern rural communities that may have opted out of CCCE service provide additional opportunities to emphasize the benefits of renewable energy programs offered with CCCE service.
• Relationships with member agencies and community-based organizations play a pivotal role in reaching rural communities for education and re-enrollment efforts. • In the southern rural communities of San Luis Obispo and Santa Barbara counties, recent enrollments in 2020-2022 create a need to establish greater familiarity and understanding of CCCE services and resources.
• CCCE must form new relationships with community organizations, improve customer awareness and solicit feedback from partners to understand issues around engagement and program participation within southern area rural communities. • CCCE must support broadband deployment in rural areas and the development of regional energy networks to provide cohesion around the topic of energy and inclusivity for the diversity of voices and interests not frequently heard in mainstream discourse.

CULTURAL AND LANGUAGE DIFFERENCES
According to the Census Bureau’s American Community Survey (ACS) 5-year estimates, approximately 8% of households in the CCCE service area are limited English-speaking households. Among people aged five and older, approximately 19% profess some difficulty with spoken English. Some customers may speak English as their second language, while others may not speak English at all.

Translation of information into the non-English languages spoken by our customers is essential as CCCE communicates new programs, rates, and bill assistance or payment plan options.

Effective translations require an understanding not only of words but of meaning. In many cases, a literal translation without attention paid to conventional language conveys a confusing message.

Translations should resonate with the target audience while maintaining a clear and simple message.

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2022 UNDERSERVED COMMUNITIES
OUTREACH AND ENGAGEMENT PLAN 10

CENTRAL COAST COMMUNITY ENERGY
In CCCE’s service area, Spanish is the most common non-English language, next to Tagalog. Also significant are the languages of migrant indigenous communities, namely Mixtec, Zapotec, and Trique dialects, among others, which are only spoken.

Members of indigenous communities who are neither fluent in Spanish nor English face additional barriers in accessing services. Conversations with leaders in these communities reveal that some migrant indigenous residents only speak their native language and rely on oral translations to receive information. To engage with this community, leaders recommended ongoing outreach at community meetings supported by translators or cultural intermediaries, in addition to an audio-only marketing approach through radio, Facebook or WhatsApp.

Engaging linguistically isolated communities across the service area requires a multi-faceted approach comprised of effective marketing, event, and stakeholder outreach. CCCE has leveraged successful partnerships with community organizations and media outlets such as the Monterey County Immigrant Services Network of Empowerment (CISNE), Promotores, Mixteco Indigena Community Organizing Project, Entravision, and La Ley to conduct the Farmworker Field Promotion, and promote the Arrearage Management Plan and CCCE’s Electrify Your Ride electric vehicle incentive program. Additionally, the agency continues to improve its translation of outreach materials, such as videos, brochures, web content, information sheets, and program applications.

Strategies:
• Leverage popular social media platforms and build new media relationships with radio and cable television stations in recently enrolled communities to promote CCCE service, energy programs, and resources in Spanish.
• Investigate outreach opportunities with regional advocates, such as the Mixteco Indigena Community Organizing Project, Lideres Campesinas, Promotores, and radio stations. • Support and attend cultural events, such as church festivals, soccer tournaments, resource fairs, swap meets, and farmworker field promotions to increase direct engagement with multilingual communities.

SOCIOECONOMIC STATUS
Low-income households are found in a variety of demographic groups and locations within our service area. Targeted groups include working-class and rural families, immigrants, farmworkers, the housing burdened, the food insecure, the unemployed, residents of mobile home parks, renters, and senior citizens living on fixed incomes. These groups are more likely to be disproportionately impacted by “the energy burden”, which is defined by the U.S. Department of Energy (DOE) as the portion of a customer’s household income that is spent on energy. According to DOE’s Low-Income Energy Affordability Data (LEAD) tool, the national average energy burden for low-income households is 8.6%, three times higher than for average and medium-income households which are estimated at 3%. It is assumed that the pandemic amplified existing challenges around utility bill payments for low-income households.

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2022 UNDERSERVED COMMUNITIES
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CENTRAL COAST COMMUNITY ENERGY
Working-class families, including farmworkers, often work long hours and lack the time and energy to engage with utilities, public agencies, schools, and other essential service providers.

Their non-working hours may be dedicated to caring for family members or other critical matters unrelated to seeking information from utilities and agencies such as CCCE. While these families are not excluded from energy programs, they are less likely to participate in them. CCCE considers it particularly important to identify new areas of engagement with these communities by understanding where they spend their time and what sources of information they trust.

Renters may live in single-family homes, multi-family homes, and mobile home parks. Residents in rental housing often lack control over their energy bills. Some renters may pay for utilities as part of their rent. Lack of direct management for energy service may exclude renters from having the choice to participate in community choice energy and other helpful programs. CCCE sees an opportunity to improve relationships with property managers and nonprofits that aid renters, especially in affordable housing communities.

Senior citizens living on fixed incomes may face affordability issues, especially around paying their monthly bills. CCCE considers it particularly important for individuals with low and/or fixed incomes to understand their electricity options, including knowing that discounts like the California Alternative Rates for Energy (CARE) and Family Electric Rate Assistance (FERA) are unaffected by CCCE service. These customers likely receive information through traditional sources, such as print newspapers, network television, mail, and word of mouth. Their concerns related to energy deal with the increasing energy burden as a portion of their income. Some customers from this demographic opt-out of CCCE under the assumption that CCCE service is an additional cost.

Low-income households across the service area stand to gain the greatest benefit from a combination of resources that include utility bill assistance, arrearage payment plans and forgiveness, weatherization, energy efficiency, and rebates for transportation and housing electrification. CCCE engages in a variety of efforts to support rate assistance programs through its targeted emails, newsletter, customer financial resources webpage, social media platforms, chambers of commerce, member agencies, community organizations, farmworker outreach program, monthly educational webinars, and in-person events. Continuing these efforts is critical to the aim of bringing relevant and impactful information to underserved communities. To date, customers on discount programs, such as CARE, FERA, and Medical Baseline represent 31% of all residential customers in CCCE’s service area.

Strategies:
• CCCE is positioned to be a resource and collaborator in ensuring eligible customers have the necessary information to enroll in available rate assistance programs, such as CARE and FERA that apply to CCCE generation charges as well as investor-owned utility transmission and distribution charges.
• CCCE considers it particularly important to play a supportive role in keeping low-income customers up to date on state and local assistance programs to avoid disconnections expected after the shutoff moratorium ordered by the CPUC on June 24, 2021, terminates in March 2022.
• CCCE will prioritize eligible customers and communities with the highest CARE and FERA enrollment rates to promote critical resources such as the Arrearage Management Plan (AMP)and California Arrearage Payment Program (CAPP).
• CCCE will consider equity and access issues in designing its energy programs, which invest CCCE revenue into the communities we serve through financial incentives to electrify transportation and buildings.

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OUTREACH AND ENGAGEMENT PLAN 12

CENTRAL COAST COMMUNITY ENERGY

HEALTH RISKS
Communities with high levels of chronic illnesses are at greater risk of poor health outcomes and face additional financial burdens associated with treating medical conditions. Low-income, immigrant, senior, minority and rural households are more likely to have chronic illnesses yet lack access to adequate health care. Energy costs can be a source of financial stress and erode the ability to pay for health care. Financially burdened customers with chronic illnesses often require payment assistance to keep their medical devices powered during power shutoffs or simply to keep the lights on.

Strategies:
• Provide regular updates on energy programs and bill assistance to health advocates such as the Independent Living Resource Center, Latino Elders Outreach Network, Mi Vida Mi Voz, Latinx and Indigenous Migrant Task Force, and Promotores. These agencies play a role in public health and can help CCCE to identify additional communities disproportionately burdened by poor health outcomes on an ongoing basis.
• Encourage health advocates and agencies to promote resources such as Medical Baseline and the Low-Income Home Energy Assistance Program (LIHEAP). • Leverage existing outreach networks through CCCE’s member agency’s health departments and housing agencies. Explore opportunities for collaboration and information sharing with these agencies.

THE DIGITAL DIVIDE
The digital divide refers to the gap between customers that have access to computers and the internet and those that don’t. Although rural customers are more likely to be affected by the digital divide, urban communities can also be impacted. Beginning in March of 2020, response to the COVID-19 pandemic required CCCE to move to digital communication as its primary method of engagement with customers. Outreach conducted at in-person events shifted largely to virtual platforms such as Zoom or Facebook Live. Energy program applications are now exclusively online. Customers without access to reliable broadband or necessary devices may have increased difficulty receiving current information on CCCE’s resources and applying for energy programs.

Strategies:
• Work with member agency staff and other stakeholders to identify additional community groups and organizations such as senior centers, food banks, resource centers, farmworker action networks, rural development organizations, business organizations, educational institutions, environmental organizations, special districts, neighborhood groups, service clubs, and social service providers that can help spread the word to customers without access to the internet.
• Continue to rely on traditional forms of media such as cable television and radio, newspapers, and magazines to conduct outreach.
• Distribute print collateral, make presentations, and attend in-person events to increase access to CCCE programs and information.

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OUTREACH AND ENGAGEMENT PLAN 13

CENTRAL COAST COMMUNITY ENERGY

ENVIRONMENTAL BURDENS
Every community encounters its own set of environmental, health, and socioeconomic stressors.

Environmental burdens often overlap with and amplify existing health and income disparities. As a result, CCCE will target customers impacted by more than one barrier.

Environmental burdens may include communities frequently exposed to one or more sources of pollution. Some communities are disproportionately affected by climate change and are more vulnerable to health stressors such as heatwaves, particulate matter, drinking water contaminants, pesticides, toxic waste, traffic density, wildfires, smoke, sea-level rise, flooding, and landslides.

While it is not CCCE’s role to resolve all environmental burdens or their subsequent impacts, we can provide resources when appropriate to reduce direct and indirect impacts to our customers.

Strategies:
• Collaborate with member agencies to ensure resources provided by CCCE and awareness of CCCE service and benefits are included in programs to assist and protect environmentally burdened communities.
• Regional air quality districts that regulate and work to address health and community impacts related to pollution are natural collaborators in helping CCCE to reach customers in areas with disproportionate exposure to environmental risks.

RECOMMENDATIONS
CCCE must strengthen existing relationships, build new ones, and use best practices to engage with customers and promote available resources. In developing recommendations to address and reduce the barriers facing underserved communities, CCCE considered the following questions:
• How can CCCE successfully educate and build awareness in underserved communities? • Where are potential new areas for media engagement?
• How can CCCE circulate information and resources equitably in a non-digital landscape? • How can CCCE successfully deploy energy programs in underserved communities? • How can CCCE successfully promote other relevant resources including partner agency resources for energy customers?
• How does CCCE effectively solicit input for current and future CCCE efforts from underserved communities?

ADAPTING ENERGY PROGRAMS
Engaging underserved communities deals not only with communication methods but the substance of the community reinvestment and energy programs CCCE provides. Do our programs address the unique needs of the underserved communities identified in this report and are they offered in such a way that these communities can easily take advantage of them? Energy programs are designed to achieve a more equitable, clean energy future for the Central Coast. CCCE’s energy programs have the potential to significantly reduce greenhouse gas emissions through the electrification of building, agricultural, residential, and transportation sectors. Supporting widespread electrification or “fuel-switching” also brings the potential to spur green job opportunities and stimulate the local economy.

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CENTRAL COAST COMMUNITY ENERGY
In addition to several well-established health and safety benefits, electrification can reduce costs for residents and businesses and improve the overall quality of life. It is important CCCE take steps to ensure underserved communities have access to these programs, including seeking public input on effective ways to ensure access.

Virtual workshops were conducted in late 2020 to Mid-2021 to collect feedback on energy programs. Over 550 participants took the FY 20-21 CCCE Energy Programs Priorities Survey. In addition, the Energy Programs Ad Hoc Committee of the Community Advisory Council assessed and ranked programs according to the needs of CCCE customers As a result of such input, CCCE has modified energy programs to broaden eligibility and provide incentives for low-income residential customers, small and medium businesses, and institutions serving underserved communities. Marketing materials for programs are currently made available in English and Spanish.

Electrify Your Ride (EYR) Program
In 2021, The Electrify Your Ride (EYR) Program was modified to provide additional incentives and expand eligibility for low-income customers with household incomes between 200-400% of the federal poverty line. As an alternative to demonstrating active enrollment in CARE, FERA, or HEAP assistance programs, applicants can verify eligibility through household paystubs, participation in other government programs with comparable income requirements, or by working directly with CCCE staff to ascertain another verification method.

New Construction Electrification Program
CCCE recently launched the third iteration of its New Construction Electrification Program (NCEP).

This program supported both market-rate and affordable-all electric housing developments in previous years. Beginning in 2022, NCEP will only provide incentives to developers for affordable, all-electric housing. The program requires new housing projects to accommodate all-electric appliances including water heating, space heating, and stoves.

ADAPTING COMMUNICATIONS & OUTREACH
CCCE has used advertising, direct mail, and social media to support successful customer enrollments and promote energy programs. CCCE’s “all hands on deck” approach to outreach focuses on individual customer engagement, sponsorship and attendance of community events and workshops, and support for local and regional membership organizations. As CCCE increased in staff, including bilingual employees, it expanded opportunities to regularly engage Spanish-speaking communities and identify opportunities for targeted outreach.

Initiatives include:
• Engagement with a wide variety of stakeholders and community groups to solicit input on CCCE matters and to promote resources. CCCE has held meetings with local community organizations and businesses to build relationships with more than 100 community-based partners across the service area.
• Identification of strategic sponsorships, memberships, and events where CCCE can interact with hard-to-reach audiences. CCCE has sponsored, attended, and presented at more than 250 events. Events include the Community Immigrant Services Network of Empowerment and Promotores roundtables, NASA STEM Cafes, Vision y Compromiso’s Summer Resource Fair, “Stuff the bus” with United Way of Monterey County, Second Harvest Food Bank Santa Cruz County, and sponsorships of the Boys and Girls Clubs of Monterey, San Luis Obispo, and Santa Barbara Counties.

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Central Coast Community Energy (3CE) Policy BoardJune 26, 2024

Central Coast Community Energy (3CE) Policy Board
June 26, 2024