Agenda packet — Central Coast Community Energy (3CE) Policy Board, December 11, 2024

Policy Board of Directors
December 11, 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,
Redwood Room
Santa Cruz, CA 95060
Capitola
City Hall
420 Capitola Ave, Conference Room
Capitola, CA 95010
County of San Benito
Veteran’s Memorial Building
649 San Benito St
Hollister, CA 95023
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 San Luis Obispo
Katcho Achadjian Government Center
1055 Monterey Street
San Luis Obispo, CA 93408
County of Santa Barbara
County Administration Building
105 E. Anapamu Street, Suite 108
Santa Barbara, CA 93101
City of Goleta
City Hall
130 Cremona Drive, Suite B
Goleta, CA 93117
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 items:
a. Closed session under Government Code 54956.8 - Conference with Real Property Negotiators PROPERTY: 2601 Porter Street, Soquel, CA
AGENCY NEGOTIATOR: Dewayne Woods and Robert M. Shaw
NEGOTIATING PARTIES: S&H Morgan Living Trust
UNDER NEGOTIATION: Price and Terms
b. Pursuant to Government Code section 54957(b), the Board will confer regarding evaluation of performance for the Chief Executive Officer

CONSENT CALENDAR

2. Approve minutes from the September 19, 2024, meeting of the Policy Board of Directors

3. Update on 3CE's Energy Programs

4. Regulatory and Legislative Quarterly Update

5. Financial report for the period October 1, 2023, through August 31, 2024

REGULAR AGENDA

6. Community Advisory Council Report

7. CEO Report
a. Staffing Update
b. Staff Proposed Review of Rates for Potential Adjustment c. Hourly Flex Pricing Pilots
d. CC Power
e. CAC Community Workshops
f. Santa Barbara County APCD Grant
g. Enrollment

8. a. Consider approving an Electric Vehicle charger capital improvement project at 3CE's offices located at 1026 Palm Street in San Luis Obispo; and
b. Authorize the Chief Executive Officer to execute necessary vendor contracts to implement the improvements with a total budget not to exceed $165,598

9. Status update from the Ad Hoc Governance Committee

10. Consider and appoint candidates for the Policy Board Chair and Vice Chair Board member comments and reports
Adjournment
Policy Board of Directors
September 19, 2024
9:00 AM
Seascape Beach Resort
1 Seascape Beach Resort Dr, Riviera Room
Aptos, CA 95003

MINUTES
The meeting was called to order at 9:04 AM with 15 members attending and a quorum established.

Directors Present: Adams, Baron, Donaldson, Freeman, Guthrie, Hamon, Kosmicki, Marx, McPherson, Ortiz-Legg, Patino, Richards, Rios, Silva, Valenzuela, Vice Chair Brooks, Chair Williams
Directors Absent: Dutra, Keeley
Corrections or Additions
Clerk announced that there were no corrections or additions to the agenda.

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
MOTION: Moved by Director Adams, seconded by Director Patino to approve the consent calendar as submitted.

ACTION: The Motion Carried with a voice vote: 17/0/2
AYES: Adams, Baron, Donaldson, Freeman, Guthrie, Hamon, Kosmicki, Marx, McPherson, Ortiz-Legg, Patino, Richards, Rios, Silva, Valenzuela, Vice Chair Brooks, Chair Williams NOES: None

Absent: Dutra, Keeley

1. Approved minutes from the June 26, 2024, meeting of the Policy Board of Directors

2. Approved minutes from the August 26, 2024 special meeting of the Policy Board of Directors

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3. Adopted Resolution PB-2024-07 Setting the Regular Meeting Schedule of the Policy Board of Directors

4. Approved the 3CE Community Advisory Council FY 2024-25 Work Plan

5. FY 2023-24 Energy Programs Update

6. Quarterly Regulatory and Legislative Update

7. Financial report for the period October 1, 2023, through June 30, 2024

8. Investment Performance Report for the period of October 1, 2023 through June 30, 2024

9. CEO Report
a) Staffing Update
b) Resource Adequacy (RA) Reform
c) CEC Load Management Standards (LMS)
d) Reliable and Clean Power Procurement Program (RCPPP)

10. Community Advisory Council Report

REGULAR AGENDA

11. Updated on status of real property acquisitions and provide direction regarding evaluation principles for future real property transactions
Chair opened public comment period
There were no public comments
Chair closed the public comment period
ACTION: Discussion Item; no action required

12. Adopted Resolution No. PB-2024-08 approving the Fiscal Year 2024-25 Recommended Budget and Calendar Year 2025 cost-based rates
Chair opened public comment period
The following individual(s) addressed the Board
 Gine Johnson
Chair closed the public comment period

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MOTION: Moved by Director Ortiz-Legg seconded by Director McPherson to support the staff recommendation.

Absent: Dutra, Keeley

13. Provided direction regarding proposed 3CE Code of Conduct Chair opened public comment period
There were no public comments
Chair closed the public comment period
ACTION: Discussion Item; no action required

14. Nominating Committee recommendation for Policy Board Chair and Vice Chair Chair Williams deferred this item to the next meeting of the Policy Board Adjourned at 11:17 AM

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Staff Report Item 3
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Inaara Muhammad, Manager of Energy Programs SUBJECT: Update on 3CE’s Energy Programs
DATE: December 11, 2024
RECOMMENDATION:

It is recommended that the Policy Board receive an update on 3CE’s Energy Programs.

BACKGROUND:
3CE’s Energy Programs have been administered since 2019 to support 3CE’s mission by providing the Central Coast community with incentives to engage in electrification initiatives, strengthen the local economy, and reduce greenhouse gas emissions. The Energy Programs portfolio has undergone several iterations to improve community-wide accessibility and achieve parity for priority communities.

Currently, 3CE offers 11 programs and concierge services to support residential, commercial, and public agency electrification efforts in the transportation, building, and agricultural sectors.

DISCUSSION/ANALYSIS:

As part of 3CE’s commitment to customers, 3CE staff continually evaluate Energy Programs’ performance by tracking several key indicators. Attached to this report are detailed status updates on 3CE’s Energy Programs Portfolio (Attachment 1). These status updates share a variety of program performance metrics including equipment incentivized, housing units electrified, dollars spent, and performance on equity (e.g., dollars going to income qualified residents).

In FY 2023-24, 3CE distributed over $10.9 million in incentives across 11 programs and support services, a $1.8 million increase from FY 2022-23. An additional breakdown of the prior year’s energy program participation is shown in the tables below.

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3CE’s Energy Programs’ Incentives & Highlights
Over $10.9 million in incentives across 11 programs
FY 2022-23 FY 2023-24 % Change Highlights
Heat Pump Water
Heater & HVAC Units 243 units 396 units +63%
Increased funding to support
uninterrupted services during
TECH funding uncertainties
All-Electric
New Construction 249 units 460 units +85%
Expanded to include incentives
for all-electric market rate single
and multifamily housing
E-Buses 6 E-buses 18 E-buses +200% Expanded to allow up to five rebates per customer
Electric Vehicles 1,054 EVs 1,108 EVs +5% Avoided emissions equivalent to 709 gas cars off the road
EV Chargers 805 EV Chargers 819 EV Chargers +2%
Helped enable over $2.1 million
in EV Charger purchases and
installation across 3CE service
area
Ag Equipment 32 rebates 18 rebates -44% Increased cap to allow two rebates per customer
Battery Systems 0 kWh 131 kWh NA Launched Residential Battery Rebate program
In FY 2023-24, 3CE supported electrification initiatives for our Member Agencies:

FY 2023-24 Member Agency Program Participation
Plan Your Fleet
City of Carpinteria
City of Greenfield
City of Marina
City of Monterey
City of San Luis Obispo
City of Santa Maria
City of Soledad
County of Monterey
County of Santa Barbara
Charge Your Fleet &
Electrify Your Fleet
City of Capitola
City of Carmel-By-The-Sea
City of Carpinteria
City of Goleta
City of Santa Cruz
City of San Luis Obispo
City of Santa Maria
City of Watsonville
County of Santa Barbara
County of Santa Cruz
1 EV
3 EVs
10 L2 Chargers
1 EV
4 EVs and 7 L2 Chargers
10 EVs
14 EVs and 13 L2 Chargers
3 EVs and 2 L3 Chargers
2 EVs and 28 L2 Chargers
6 EVs
3CE’s Energy Programs empower all customers in our collective renewable energy transition. Below are highlights of ongoing progress and initiatives across Energy Programs’ focus areas:

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 Transportation Electrification
- As a result of the E-Bus Program expansion in August 2024, which now allows eligible customers to receive rebates of up to $400,000 for multiple vehicles, the E-Bus program distributed a total of $1.9M across four counties for 17 buses in FY 2023-24. The expansion was based on customer feedback regarding fleet purchasing and replacement practices.
- 3CE was recently awarded a $200 K grant from the Santa Barbara Air Pollution Control District to support a publicly available charging infrastructure project in Santa Maria.  Building Electrification
- In November, as part of the Community Advisory Council’s annual workplan, 3CE hosted two community listening sessions to gather feedback on its Electrify Your Home program and potential improvements to the program’s design. The listening sessions collected feedback for five program design focus areas: Awareness, Evaluation, Installation, Rebates, and Post-Installation Monitoring. Community feedback from the two events will inform future program improvements for Electrify Your Home.  Agricultural Electrification
- 3CE staff are actively collaborating with PG&E to launch an Hourly Flex Pricing pilot for agricultural customers. The pilot project is expected to provide significant customer savings and grid operational benefits through real-time, dynamic price signals and automated control of ag equipment. The launch and implementation of this pilot is currently in the planning stages.
 Storage Initiative
- The Residential Battery Rebate Program was launched on July 16, 2024. The program has an annual budget of $2M, anticipating 400 participants. The program has received 79 applications since its launch. 3CE staff are reviewing battery tracking data to help inform ongoing demand response pilot project planning.
 Strategic Initiatives
- The new Customer Relationship Management (CRM) tool for program applications and management was successfully launched on October 1st, 2024. Existing program applications were kept open during the transition from FY 2023-24 to the current fiscal year. Additional usability features for 3CE remain under development.

FISCAL IMPACT:

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

CONCLUSION:
3CE’s Energy Programs support local communities by providing funding and services to accelerate regional electrification, reduce greenhouse gas emissions, and benefit local economies.

ATTACHMENT(S):

1. 3CE Energy Programs Portfolio Update

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3CE’s Energy Programs Portfolio Update
This report provides an update on participation in Central Coast Community Energy’s (3CE) Energy Programs Portfolio with data collected through November 2024.

TRANSPORTATION ELECTRIFICATION
Electrify Your Ride Program
3CE’s Electrify Your Ride (EYR) program incentivizes residential and commercial electrification through rebates for the purchase or lease of an electric vehicle (EV), for purchase of Level 2 and Direct Current Fast Chargers, and for electrical work necessary to install chargers. In addition, EYR provides technical assistance for EV infrastructure build-out at publicly accessible commercial sites and at multifamily residential properties. The FY 2024-25 budget for EYR is $4.1 million.

Incentives are available on a first-come, first-served basis until funding is fully awarded. To promote greater adoption of transportation electrification in disadvantaged and low-income communities, higher incentive amounts are available for income-qualified customers and multifamily-unit buildings.

In FY 2023-24, 3CE distributed over $4.2 million in incentives to over 2,450 applications, a 7% increase from $3.9 million in FY 2022-23. The program last fiscal year enabled over $45.6 million in electric vehicle and EV charger purchases and empowered the Central Coast community to avoid an estimated 3,100 MT CO2 emissions in FY 2023-24, equivalent to taking 733 gas-powered vehicles off the road for one year.

In FY 2024-25, EYR has distributed over $179,810 in rebates across four counties, enabling over $2.4 million in electric vehicle and EV charger purchases.

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Figure 1 (above): EYR funds distributed by county in FY 2024-25.

Figure 2 (above): EYR funds distributed by incentive type in FY 2024-25.

Figure 3 (above): EYR funds distributed to income-qualified applicants in FY 2024-25.

Tier 1 = 201 - 400% FPL; Tier 2 = < 200% FPL; Standard = Non-Income Qualified Applicants

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Electric Bus Program
3CE’s Electric Bus (E-Bus) program provides public schools/school districts, farmworker transit organizations, and public transit agencies enrolled in 3CE service the opportunity to receive incentives to support the purchase of up to five all-electric buses. In FY 2024-25, the budget for the E-Bus program is $1.4 million.

Applications are accepted 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 assure applicants 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 restrictions apply.

In FY 2023-24, 3CE distributed over $1,866,761 in post-purchase rebates, a 113% increase from the $875,000 distributed in FY 2022-23. Furthermore, the E-Bus program tripled its impact to incentivize over 18 electric buses and charging stations. 89% of funding for FY 2023-24 school bus rebates were distributed to Title 1 Schools.

The program has not received applications so far in FY 2024-25. 3CE staff are actively engaging with the community to promote the program to interested schools, organizations, and transit authorities.

Plan Your Fleet Program
3CE’s Plan Your Fleet (PYF) program provides planning, design, and engineering consulting to Member Agencies to accelerate fleet electrification and EV charging infrastructure development across the Central Coast. The FY 2024-25 budget for Plan Your Fleet is $650,000.

In FY 2023-24, as a result of key initiatives including expanding of the program and including additional fleet electrification services, participation in Plan Your Fleet increased 80%, from five to nine Member Agencies.

The following jurisdictions have so far engaged with the Plan Your Fleet program this fiscal year:
 City of Salinas
 City of San Luis Obispo
 City of Soledad
 County of Santa Barbara

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Additional jurisdictions are expected to engage in upcoming months and will be included in this report as their engagement scope is finalized.

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 funding support each fiscal year. 3CE’s 2024-25 CYF budget totals $1.0 million.

In FY 2023-24, 3CE incentivized 60 EV chargers totaling $504,544.32, a 65% increase from $138,420 in FY 2022-23.

In FY 2024-25, the program has so far incentivized 60 chargers totaling $150,000.00.

Member Agency Equipment Type Quantity Total Incentive
COUNTY OF SANTA BARBARA Level 2 60 $150,000.00
TOTAL 60 $150,000.00
Table 1: Charge Your Fleet projects awarded in FY 2024-25.

Electrify Your Fleet Program
3CE’s Electrify Your Fleet (EYF) program provides Member Agencies with financial incentives to purchase or lease electric fleet vehicles. Applications are accepted until program funds are spent. 3CE Member Agency applicants are eligible to be awarded up to $150,000 in EYF incentives in a single program year. In FY 2024-25, 3CE has budgeted $1.1 million for EYF.

In FY 2023-24, 3CE incentivized 44 Battery Electric Vehicles totaling $798,000.

The program has not yet received applications in FY 2024-25 but is actively engaging with Member Agencies who are in the process of purchasing electric fleet vehicles including the City of Carpinteria, City of Goleta, City of San Luis Obispo, City of Santa Cruz, City of San Juan Batista, City of Watsonville, and the County of Monterey. 3CE expects increased participation later in the fiscal year as Member Agencies who participated in FY 2023-24's Plan Your Fleet program implement their plans.

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BUILDING ELECTRIFICATION
Electrify Your Home Program
The 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 to 3CE customers, incentivizing making the switch to all-electric heat pump technology. The FY 2024-25 budget for EYH is $720,000.

Contractors enrolled in TECH are provided education and training on electrification design specifications, heat pump installation, building science, and sales and marketing for electric heat pumps at no cost. There are currently seventy-five (75) licensed contractors enrolled in the TECH program that work in 3CE’s service area.

On November 13, 2024, the Operations Board approved an amendment to 3CE’s contract with Energy Solutions, 3CE’s program administrator for Electrify Your Home. The amendment increased the not-to-exceed amount listed in the contract by $990,000 and extended the term of the agreement by eight months to allow for continued and uninterrupted services to support Electrify Your Home through the end of FY 2024-25.

In FY 2024-25, the EYH program distributed $54,700 in rebates to promote the installation of 15 Heat Pump HVAC units and 4 Heat Pump Water Heater Units.

County Heat Pump HVAC
Units Installed
Heat Pump Water
Heater Units Installed
SANTA CRUZ COUNTY 14 4
MONTEREY COUNTY 1 0
Table 2: Electrify Your Home installations by county
New Construction Electrification Program
The New Construction Electrification Program (NCEP) provides housing developers and homeowners with incentives to build all-electric single and multifamily housing, including market- rate, affordable, farmworker, and disaster -rebuild housing types, as well as Accessory Dwelling Units (ADUs). Qualifying projects must be fully electric, including appliances for space heating, water heating, and cooking. The FY 2024-25 budget for NCEP is $1.0 million.

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In FY 2023-24, 3CE's New Construction Electrification Program distributed a total of $1,103,250, a 36% increase from FY 2022-23. The program incentivized over 460 housing units in FY 2023-24 – 85% more than the 249 units incentivized in FY 2022-23.

So far in FY 2024-25, the program has distributed over $30,000 across four counties to support construction of over six units.

County Market-Rate
Housing
Affordable
Housing
Accessory
Dwelling
Units (ADUs)
Disaster
Rebuilds
Total Units
Incentivized

SAN BENITO - - - - -
SAN LUIS OBISPO - - 1 - 1
SANTA BARBARA - - 2 - 2
SANTA CRUZ - - 2 - 2
MONTEREY - - 1 - 1
Table 3: All-electric construction supported via NCEP in FY 2024-25 Reach Code Program
3CE’s Reach Code program launched October 1, 2022, to help local cities and counties adopt and implement reach codes by providing no-cost technical assistance including stakeholder outreach support.

Services include providing technical expertise, presenting to key stakeholders, developing customized ordinances, reviewing staff presentations and reports, and developing implementation tools to help Member Agencies enforce reach codes. For FY 2024-25, 3CE has budgeted $150,000 for its Reach Code program.

In FY 2023-24, 3CE engaged four Member Agencies in the Reach Code Program, doubling engagement from the two Member Agencies that participated in FY 2022-23. This increased participation increased 3CE’s investment in the Reach Code program by 33% to $133,288 last fiscal year. In FY 2024-25, the following Member Agencies are participating in 3CE’s Reach Code program:

Member Agency Reach Code Type
City of Goleta New Construction
City of San Luis Obispo Existing Buildings Update (underway) City of Santa Cruz Existing Buildings (underway)
County of Monterey Electric Vehicle Charging Infrastructure (underway) Table 4: Reach Codes participation in FY 2024-25

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AGRICULTURAL ELECTRIFICATION
Agricultural Electrification Program
3CE’s Agricultural (Ag) Electrification program provides rebates to ag customers for replacing 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 offers technical assistance for EV infrastructure buildout at agricultural customer sites. The FY 2024-25 budget for Ag Electrification is $800,000.

Rebates for equipment with higher estimated GHG emissions avoidance and those benefiting small to medium sized agricultural businesses are supported with greater incentive levels. 3CE covers up to 50% of the cost for ag 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, with up to two rebates per customer per fiscal year.

In FY 2023-24, 3CE distributed $414,058.04 in incentives to support 18 equipment purchases. So far in FY 2024-25, 3CE has distributed $101,129 in rebates to support three equipment purchases:

Electric Ag Equipment Qty Incentivized Recipients
Excavator 2
 Bee Farm in Santa Barbara County
 Winery in Santa Cruz County
Forklift 1  Farm in County of San Benito
Table 5: Agricultural Electrification projects awarded in FY 2024-25 100% of Agricultural Electrification Program incentives distributed so far in FY 2024-25 have been to small businesses.

County % of incentives distributed to small businesses
SAN BENITO 100%
SAN LUIS OBISPO 0%
SANTA BARBARA 100%
SANTA CRUZ 100%
MONTEREY 0%
TOTAL 100%
Table 6: Agricultural Electrification projects awarded to small businesses in FY 2024-25

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DEMAND RESPONSE / LOAD SHIFTING
Residential Battery Rebate Program
3CE’s Residential Battery Rebate program launched on July 16, 2024, to incentivize use of residential behind-the-meter battery storage systems. Rebates are provided for purchase of eligible batteries, qualifying installation hardware, and labor directly related to the battery system's installation. 3CE has set a goal of issuing four hundred (400)rebates per fiscal year, which equates to approximately 2.6 megawatts (MW) of new energy storage, and an annual expenditure of $2M.

The program offers a $300 per kilowatt hour (kWh) base rebate for customers. A $500 per kilowatt hour (kWh) rebate is offered to Net Energy Metering (NEM) 1.0 and NEM 2.0 tariff customers who elect to transition to Net Billing Tariff (NBT) early. Additionally, the program offers a $500 per kilowatt hour (kWh) rebate for customers who are enrolled in the Medical Baseline program and are reliant on electricity to power medical devices. To promote adoption in disadvantaged and low-income communities, the program also offers a $500 per kilowatt hour (kWh) rebate for customers enrolled in CARE or FERA payment assistance programs.

As of November 2024, 3CE has received 79 applicationsfor the program. Since launch, 3CE has distributed $84,400 in rebates, with approximately 131 kWh of load shifted daily during the peak period of 4:00 pm to 9:00 pm.

Staff will present a report on the program’s first six months’ performance to the Operations and Policy Boards in 2025.

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Staff Report Item 4
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Jerri Strickland, Manager of Energy Policy Sophia Schwirzke, Customer Accounts Manager
SUBJECT: Regulatory and Legislative Quarterly Update
DATE: December 11, 2024
RECOMMENDATION:

This memorandum provides the Policy Board with a quarterly 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.

FISCAL IMPACT:

No financial impact by receiving this report.

ATTACHMENT(S):

1. Quarterly Regulatory and Legislative Update

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1 Quarterly Regulatory & Legislative Update
December 11, 2024

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2 Table of Contents
Table of Contents
REGULATORY UPDATE......................................................................................................................................................... 3 Resource Adequacy (RA) - .............................................................................................................................................. 3 Provider of Last Resort (POLR) and Emergency Transition Planning - R.21-03-011................................... 3 Load Management Standards (LMS) and Real-Time Pricing................................................................................. 4 Preventing Disconnections -.......................................................................................................................................... 4 Integrated Resource Planning (IRP) -........................................................................................................................ 5 Renewables Portfolio Standard –................................................................................................................................. 6 Interconnections –.............................................................................................................................................................. 6 Power Source Disclosure (PSD) and Power Content Label (PCL) – .................................................................. 7 Integrated Energy Policy Report Update 2024 –....................................................................................................... 7 Aliso Canyon Investigation – I.17-02-002....................................................................................................................... 8 Diablo Canyon Power Plant Extension –........................................................................................................................ 8 Distribution Planning –......................................................................................................................................................... 9 Energy Resources Recovery Account (ERRA) Forecast –....................................................................................... 9 General Rate Cases —..........................................................................................................................................................10 LEGISLATIVE UPDATE........................................................................................................................................................12 Governor’s Action.............................................................................................................................................................12 Special Session Redux.....................................................................................................................................................12 Energy Affordability Executive Order......................................................................................................................13

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3 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
On October 29, the CPUC issued a Track 2 Proposed Decision (PD) that adopts 3CE’s recommendation to delay adoption of the 2026 Planning Reserve Margin (PRM) to allow for further analysis and stakeholder review due to uncertainty in the study results. The PD indicates that the CPUC will publish a revised PRM in December. The PD also adopts CalCCA’s proposal to amend the Central Procurement Entity (CPE) timeline to provide LSEs with certainty regarding their procurement obligations by receiving the CPE allocations at least one year prior to year-ahead RA filings. 3CE worked with CalCCA to submit opening comments on November 18 to support the PD and emphasize the impact that changes to the PRM can have on reliability and affordability. The CPUC separately issued a Scoping Memo for Track 3 of the proceeding, which will consider necessary modifications to the Slice-of-Day framework and proposals for an unforced capacity (UCAP) methodology to account for historical forced outage rates in RA capacity values for certain resources.

Next Steps
The CPUC will vote on the Track 2 PD at its December 5 Business Meeting. 3CE staff will review the revised PRM once available and continue to advocate for an approach that strikes a balance between ensuring reliability and minimizing costs to customers. Proposals on Track 3 scoping items, including SOD refinements and resource counting methodologies, are due by January 17. 3CE will work with CalCCA to draft proposals that address ongoing deficiencies with the SOD 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. 3CE does not aim to be the POLR but wants to ensure the process is fair for all LSEs and avoids competitive issues. 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).

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4 Status
On August 8, the CPUC initiated Phase 2 of the proceeding to establish the requirements and process for non-IOU entities to become a POLR. This phase will consist of two tracks: the first will address primary threshold questions regarding the authority of the CPUC and non-IOU POLRs, while the second will focus on the regulatory framework and application process for non-IOU entities to become POLR. Separately, on August 12, the IOUs submitted Advice Letters (ALs) to establish CCA FSR requirements as they are required to do annually in May and November. Because the new FSR methodologies resulting from Phase 1 have not yet been approved by the CPUC, the IOUs used previously established methodologies and thus produced FSR calculations consistent with 3CE’s previous posting requirements.

Next Steps
3CE will work with CalCCA to develop positions supportive of CCA interests and help shape its responses to the Phase 2 threshold questions, due by January 10, 2025.

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, staff submitted 3CE’s current demand flexibility programs, including a partnership with OhmConnect and ongoing collaboration with PG&E for the Hourly Flexible Pricing (HFP) Ag Pilot, to the CEC on October 1. 3CE also worked with the IOUs, Publicly Owned Utilities, and other CCAs to submit an initial proposed Single Statewide Tool framework to house all customer rate information. On November 19, 3CE’s CEO and other CalCCA Board Members met with Commissioner McAllister to encourage practical implementation of the LMS standards.

Next Steps
The CEC has issued a request for stakeholder comments on the Joint proposal for the Single Statewide tool by January 17. 3CE staff will continue to advocate for CEC or other non-ratepayer funding for LMS costs related to the development of the single statewide tool and to ensure that any necessary cost recovery processes are equitable and transparent. In the upcoming months, the CEC will issue a review of all CCA LMS Plan and issue an official determination letter on 3CE’s compliance approach. In the meantime, staff continue to assess the requirements for participating in additional CPUC-approved HFP Pilots for residential and commercial customers.

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-Page 21 of 71 5 rata method temporarily replaced the current IOU tariff “waterfall” methodology whereby 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.

Status
On November 7, the CPUC directed the IOUs to extend the current residential disconnection rate caps on an interim basis while it conducts further analysis to inform a final decision on the matter by July 1, 2025. The CPUC also issued a Scoping Memo for Phase 2 of the proceeding, which will consider disconnection protections under extreme weather conditions and the implementation of recent legislation requiring electric and gas companies to restore service when a disconnected customer agrees to certain payment plans.

Outside of the proceeding, 3CE, in partnership with fellow CCAs Clean Power Alliance, California Choice Energy Authority, and Desert Community Energy (Joint CCAs), filed a complaint with the Commission against SCE on November 15. Since the suspension of the waterfall repayment methodology, SCE has been attempting to re-establish this methodology by changing its billing return policy with the CCAs without Commission approval. The complaint aims to alert the Commission to SCE’s disregard for their decision on the waterfall methodology, safeguard against the risk of uncollected arrearages being shifted to CCAs prematurely and ensure that CCAs receive accurate arrearage data from SCE.

Next Steps
3CE will work with CalCCA to develop comments on the Phase 2 Scoping Memo to emphasize the importance of informing customers about their options to prevent disconnections and to recommend that extreme weather protections remain flexible enough to accommodate California’s diverse climate zones. The CPUC will hold a workshop on Phase 2 issues on December 12.

The Joint CCAs are awaiting a response to the filed complaint.

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 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 (LLT) 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 September 12, the CPUC issued a Ruling proposing resource portfolios for the 2025-2026 Transmission Planning Process (TPP). Once adopted, these portfolios will be used by CAISO to assess the need for upgrades or additions to the transmission system. 3CE worked with CalCCA to propose

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6 improvements to the CPUC’s methodology for planning for gas retirements and developing an optimal base portfolio to produce more beneficial and cost-effective transmission build. The CPUC held a workshop on November 4 presenting their initial mapping results of the proposed portfolios and indicated that in response to stakeholder feedback, they will refine assumptions for gas plant retirements. Separately, on October 9 the CPUC issued a report summarizing LSE compliance with IRP procurement orders based on filings submitted in December of 2023. The report demonstrates that LSEs collectively exceeded the procurement obligations for 2023 and Diablo Canyon replacement resources and are in the process of procuring to meet other Mid-Term Reliability requirements. The CPUC will issue an updated report in December based on documentation submitted by LSEs in June of this year.

Next Steps
3CE will work with CalCCA to submit comments on the initial mapping results in the 2025-2026 transmission planning process, encouraging the CPUC to consider updated LSE procurement information and CAISO’s interconnection reform into their planning process. The CPUC will issue a PD in December or January with their final 2025-2026 TPP for adoption in early 2025. A staff proposal on the RCPPP design is expected by the end of the year. 3CE will evaluate the proposed framework once available to assess impacts to 3CE’s procurement processes and advocate for improved coordination between the RA and IRP programs. 3CE’s next IRP filing will be due by 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
On November 15, the CPUC issued a Proposed Decision (PD) on LSE 2024 Procurement Plans. The PD directs 3CE to re-file its Draft 2024 RPS Procurement Plan to amend a minor discrepancy within the Executive Summary of its over procurement values, which represent 3CE’s exceedance of annual RPS requirements. No other errors were found within the Plan.

Next Steps
The CPUC will vote on the PD on December 19. Pursuant to CPUC adoption of the PD, 3CE will re-file its 2024 RPS Procurement Plan to correct the discrepancy and identify the most accurate over procurement values.

Interconnections – IPE 2023
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

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7 Interconnection Process Enhancements (IPE) initiative, focused on enhancing coordination of resource procurement, interconnection, and transmission planning to achieve state reliability and policy needs.

Status
On September 27, 3CE confirmed its participation in CAISO’s new Commercial Interest Scoring system.

Staff will evaluate projects applying for Cluster 15 according to our Board’s adopted Project Selection Criteria and 3CE’s scoring process and will allocate points to projects which meet these standards. On November 11, CAISO issued a Straw Proposal for Track 3 of its IPE initiative, which proposes modifications to simplify its process for awarding projects with Transmission Plan Deliverability (TPD). A generation resource must have TPD to provide resource adequacy, so 3CE will monitor the initiative and work with CalCCA to advocate for beneficial changes to the TPD allocation process.

Next Steps
Comments on the Track 3 Straw Proposal are due December 2. Following stakeholder feedback, the CAISO will issue a final proposal in early 2025.

Power Source Disclosure (PSD) and Power Content Label (PCL) – 21-OIR-01 Issue
The CEC’s Power Source Disclosure (PSD) program requires LSEs to provide annual disclosures of the energy sources and greenhouse gas (GHG) emissions associated with their electricity portfolio from the prior year. LSEs disclose this information to their consumers along with California’s total system power mix on an annual Power Content Label (PCL). 3CE’s annual PCL reflects the GHG intensity and energy resources associated with its two energy products, 3Cchoice and 3Cprime.

Status
The CEC is amending its PSD regulations in accordance with recent legislation requiring LSEs to report transmission and distribution losses associated with retail sales and hourly data on load, sources of electricity, and associated GHG emissions. On October 4, the CEC issued proposed revisions to PSD program rules that adopt CalCCA’s recommendation to delay reporting of loss-adjusted load until January 1, 2026. Hourly accounting requirements will go into effect beginning in 2028.

Next Steps
3CE will work with CalCCA to submit comments on the proposed amendments, due November 19, to seek clarification on the CEC’s methodology for calculating losses and how the regulations will translate into reporting. 3CE will continue to monitor changes to the program to ensure ongoing compliance with PSD and PCL reporting requirements.

Integrated Energy Policy Report Update 2024 – 24-IEPR-01 Issue
The Integrated Energy Policy Report (IEPR) is the CEC’s biannual report produced every two years, with an update every other year, to provide an assessment of California’s energy system, identify major energy trends and issues, and provide policy recommendations to advance state goals. The CEC is currently developing its 2024 IEPR Update, which will include an updated 15-year electricity demand forecast. The IEPR forecast is a key input in electric system planning conducted by the CPUC, CAISO, and IOUs.

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8 Status
On November 7, the CEC held a workshop to present its draft inputs, assumptions, and forecasts for electricity rates, distributed generation, fuel substitution, transportation electrification, and data centers, which it will use in developing the 2024 IEPR Demand Forecast. This forecast will inform future resource adequacy requirements, reliability assessments, integrated resource planning, and transmission and distribution system upgrades. 3CE staff attended the workshop and helped CalCCA draft comments recommending the CEC take measures to decrease volatility and improve accuracy in the annual IEPR demand forecasts to prevent negative impacts to procurement requirements.

Next Steps
The CEC will hold a workshop on December 12 to present overall forecast results. Following this workshop, the final 2024 IEPR Demand Forecast will be released and adopted in early 2025.

Aliso Canyon Investigation – I.17-02-002
Issue
Pursuant to SB 380, the CPUC opened an investigation in 2017 to determine the feasibility of minimizing or eliminating use of the Aliso Canyon Natural Gas Storage Facility (Aliso Canyon) while maintaining reliability in the Los Angeles region. To reduce or eliminate the need for Aliso Canyon, CPUC staff has considered strategies including procurement of non-gas generation and storage, improvements in energy efficiency, and increased building electrification. CalCCA’s advocacy in the proceeding has focused on ensuring that procurement and planning decisions are considered within the state’s long-term greenhouse gas reduction planning program, the IRP.

Status
On November 13, the CPUC issued a PD finding that Aliso Canyon is necessary for natural gas and electric reliability and cost containment until the peak day natural gas demand forecast drops below 4,121 million metric cubic feet per day. The CPUC will monitor natural gas demand levels and issue biennial assessments beginning in June 2025 to inform incremental reductions in Aliso Canyon inventory. The PD adopts a proposed portfolio mix of carbon neutral resources including renewable generation and storage, building electrification, and energy efficiency, that can replace Aliso Canyon. However, the PD agrees with CalCCA that the CPUC should make procurement decisions related to the replacement portfolio in IRP and other relevant proceedings.

Next Steps
The CPUC will vote on the PD at its December 19 meeting, which will close the Aliso Canyon investigation proceeding if approved. Once the CPUC determines that Aliso Canyon is no longer necessary for California’s energy infrastructure, the CPUC will open a future proceeding to address its permanent closure and decommissioning.

Diablo Canyon Power Plant Extension – R.23-01-007; A.24-03-018 Issue
SB 846 required the CPUC to consider the potential expansion of operations at the Diablo Canyon Power Plant (DCPP) for an additional five years beyond its retirement dates to improve system reliability while additional renewable energy and zero-carbon resources come online. DCPP is owned and operated by PG&E and was licensed by the Nuclear Regulatory Commission (NRC) to operate until November 2, 2024 (Unit 1) and August 26, 2025 (Unit 2). In 2023, the CPUC opened a new proceeding related to the

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9 potential extension of DCPP. Phase 1 of the proceeding concluded with a Decision that authorized extended operations of DCPP and allocated the costs and benefits to LSEs.

Status
On November 14, the CPUC issued a PD in the DCPP Forecast Application. The PD approves a revenue requirement of $723 million for extended operations of DCPP, $38 million lower than PG&E’s request, to be allocated across all 3 IOUs. The PD supports several of CalCCA’s positions, including that PG&E’s proposal to modify the RA benefit allocation methodology is improper and that its proposal for VPF spending does not provide sufficient information to ensure that it would optimize benefits to all customers and not increase shareholder profits.

Next Steps
Comments on the PD are due by December 4, 2022. CalCCA will attend the oral argument, scheduled for December 12, to further support the arguments it has raised throughout the proceeding.

Distribution Planning – R.21-06-017
Issue
In anticipation of extensive increases in Distributed Energy Resources (DER) due to California’s transportation electrification (TE) and climate goals, the CPUC initiated a Rulemaking to determine how to optimize DER integration within the distribution grid. This Rulemaking seeks to improve the transparency, accuracy, and efficacy of IOU distribution planning processes to better accommodate DER growth and mitigate the need for costly grid upgrades.

Status
To inform Track 2 of the proceeding, the CPUC directed a Future Grid Study of distribution system operational needs, barriers, and solutions to efficiently operate a high DER grid. On October 17, the CPUC issued the results of the study and requested party input on which operational needs should be prioritized.

Next Steps
3CE is working with CalCCA to draft comments on the study, due December 6, that advocate for the prioritization of CAISO’s visibility into DERs. CAISO currently lacks the data and information necessary for scheduling and dispatching behind-the-meter resources in the wholesale market. This visibility is a crucial foundational need to fully realize the value DERs can provide to both the distribution and transmission systems.

Energy Resources Recovery Account (ERRA) Forecast – A.23-05-012; A.23-06-001;A.24-05-009 Issue
ERRA forecast applications are filed annually by IOUs to look ahead at energy procurement-related revenue requirements, including the allocation of costs across Power Charge Indifference Adjustment (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.

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10 Status
PG&E:

Despite the August 1 Scoping Memo, which found PG&E's proposal to cap the RA Market Price Benchmarks (MPBs) inappropriate for an ERRA proceeding, PG&E continued to advocate for MPB mitigation measures in its Fall Update Testimony and again in comments to its own Fall Update. In addition to being procedurally improper, these mitigation measures would violate the principle of customer indifference and introduce unnecessary complexities. CalCCA has actively opposed PG&E's proposed measures, including filing a motion to strike portions of PG&E’s testimony and its response to the Fall Update from the record. In response, PG&E submitted its own motion to strike portions of CalCCA’s Fall Update reply.

On November 15, CalCCA met with the CPUC to support its recommendation that the CPUC use the current ERRA Forecast methodologies, rather than adopting any new PCIA policy proposed by PG&E. On the same day, PG&E submitted its preliminary Annual Electric True-up (AET) Advice Letter (AL) to establish electric rates for 2025 based on data from its October ERRA Forecast update. PG&E will submit a final AET AL in late December to reflect updated forecasts and any changes adopted by the CPUC in the ERRA Forecast proceeding.

SCE:

SCE submitted its 2025 ERRA Forecast Supplemental Testimony on August 16, 2024, which included two new proposals that would impact the Power Charge Indifference Amount; one proposal to re-categorize RA in its portfolio so that it can apply a lower MPB, and one proposal to change the methodology for forecasting RA values. CalCCA has continued to advocate that these proposals constitute new policy, which is improper for an expedited ERRA proceeding, and further supported this argument at an ex parte meeting with the CPUC. On November 15, SCE issued its preliminary AET AL to present its revenue requirement forecast based on October data. SCE will submit a final AET AL in late December to update the revenue requirement and rate change estimates based on any changes adopted by the CPUC.

Next Steps
3CE awaits delayed Proposed Decisions (PDs) in both the PG&E and SCE ERRA Forecast proceedings, expected November 15.

General Rate Cases — A.24-09-014; A.23-05-010; A.24-03-019 Issue
In four-year cycles, the IOUs submit General Rate Case (GRC) applications for authority to adjust rates and charges for electric and gas service. The CPUC conducts GRCs in two phases, using Phase I to set the total amount each IOU is authorized to collect and Phase 2 to determine the cost allocation and rate schedules for each customer class. All CCAs participate jointly in GRCs through CalCCA to advocate for just and reasonable IOU rate design and transparent customer bill presentment.

PG&E Status
On September 30, PG&E submitted its GRC Phase 2 Application which proposes to increase its fees for services provided for CCAs and requests the ability to update these fees more frequently through Tier 2

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11 Advice Letters rather than within the four-year GRC cycle. On November 4, eight parties submitted protests to PG&E’s application.

SCE Status
A PD for Phase I of SCE’s GRC is anticipated for Q4 of 2024. On November 4, the CPUC issued a Ruling to set the scope and schedule for Phase 2 of SCE’s GRC application. Intervenor testimony is due January 8, 2024.

Next Steps
3CE is working with CalCCA to develop its approach to engagement in the second phases of the GRC proceedings.

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12 LEGISLATIVE UPDATE
Governor’s Action
This year, the legislature sent Governor Newsom a suite of energy bills covering a range of topics, including affordability, energy sector decarbonization, reliability, wildfire mitigation, and permit streamlining, among others. In particular, the Governor acted on a number of 3CE priority bills including:
● SB 1177 (Bradford, 2024) - SIGNED INTO LAW
○ Requires CCAs to annually submit a plan for increasing procurement from small, local and diverse businesses, and requires CCAs to annually report to the CPUC on their procurement from women, minority, disabled veteran, and LGBT business enterprises. ● SB 1221 (Min) - SIGNED INTO LAW
○ Authorizes pilot projects throughout the state to implement neighborhood-scale decarbonization projects.
● AB 2368 (Petrie-Norris) - SIGNED INTO LAW
○ Modifies several aspects of the resources adequacy (RA) program and integrated resources planning (IRP) process at the CPUC in order to address challenges with electricity supply reliability.

At the end of session, the Senate, Assembly, and the Governor each pursued a policy package related to utility affordability. The Governor prioritized a policy that would have given the California Energy Commission more authority to reign in gas prices, but the Assembly declined to pass that policy in the last two weeks of session and instead explored the measure in a special session. Since the fate of the Governor’s proposal was still unclear by the bill signing deadline, very few end of session package bills were signed into law. SB 1420 (Caballero) which streamlines certain hydrogen projects and AB 3264 (Petrie-Norris) which will study the ratepayer impacts of demand side programs- were both signed into law.

Special Session Redux
Gas Prices
As the legislative session was drawing to a close, Governor Newsom tried to force a last-minute bill on gas prices through the legislature. This is not the first (or likely last) time that Newsom has “jammed” the legislature, but it was the first time that the legislature declined to pass his policy. In particular, Speaker Rivas and the Assembly Democratic Caucus wanted to further vet the gas price issue and the Governor’s bill in a special session. Ultimately, the Governor’s gas price policy - which authorizes the CEC to regulate refinery turnarounds and maintenance events, and require minimum fuel inventory reserves - was passed and signed into law. The oil industry under the auspices of its trade association, the Western States Petroleum Association, and the California Chamber of Commerce were vehemently opposed to Newsom’s proposal, and posed stiff opposition to the measure. As such, many moderate-leaning Democrats and members who represent the oil and gas industry in their districts opposed the measure, along with Republicans members. The measure was supported by consumer groups,

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13 prominent scholars on price control policies, and some environmental groups, who ultimately provided Democratic members with enough cover to pass the measure.

Energy Affordability Executive Order
In October of this year, Governor Newsom issued an executive order (EO N-5-24) to address rising energy rates, which requires:
● The California Energy Commission (CEC) and CPUC to evaluate ratepayer funded programs that they oversee and determine if they are “unduly adding to rates”. These reports will be delivered to the Governor by January 1, 2025.
● The CPUC to immediately modify or sunset any underperforming or underutilized programs, and return any unused funds to ratepayers.
● The CPUC and California Air Resources Board (CARB) work together to maximize the effectiveness of California’s Climate Credit.
● The Office of Energy Infrastructure Safety and CPUC to work together on adjustments to utility wildfire safety oversight processes that would yield greater administrative efficiencies and encourage cost-effective wildfire mitigation measures.
● The CPUC and regulated utilities pursue all federal funding opportunities that can help reduce or avoid electric service costs that would otherwise flow into rates.

Many of the above proposals are derived from a failed end-of-session policy package pursued by Newsom, but ultimately rejected by the legislature. This Executive Order underscores Newsom’s sensitivity towards rising rates, and signals his policy preferences for reducing them, including encouraging cost-effective wildfire mitigations, eliminating rate based programs, and pursuing federal funding.

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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: Financial report for the period October 1, 2023, through August 31, 2024 DATE: December 11, 2024
RECOMMENDATION:

Receive a financial report for the period October 1, 2023, through August 31, 2024.

SUMMARY:

Over the eleven months ending August 31, 2024, operating revenues amounted to $487.9 million, and operating expenses totaled $481.5 million for a net operating income of $6.3 million. Non-operating revenue of $10.6 million, driven by interest and investment returns, netted the month with a net position increase of $17.0 million.

Year-to-date operating revenue is $17.9 million lower than budget, primarily due to lower-than-budgeted sales volume primarily in the first half of the fiscal year and seasonal fluctuations in revenues and expenditures. Non-operating revenue from investment returns from internal reserves and interest on collateral exceeded the budget with a favorable variance of $5.9 million. This results from a favorable short-term interest rate environment. Year-to-date total revenue is $13.0 million lower than budget, a

2.5% variance.

Year-to-date operating expenditures are lower than the budget by $124,000, a variance of 0%. The cost of energy was $11.5 million higher than the budget. The variance is from higher-than-expected resource adequacy (RA) capacity costs. Non-energy operating costs were $11.7 million lower than budget due to less-than-planned costs for contracted services, energy programs, and staff vacancies.

Net position at the end of August 31, 2024, totaled $258.8 million, a $17.0 million increase from the start of the fiscal year. The increase is attributed to growth in prepaid expenses to suppliers, accrued

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revenue, collateral posted with the CAISO and suppliers, and the increased long-term asset purchase (San Luis Obispo satellite office). Cash, cash equivalents, and short-term investments totaled $195.9 million. This decrease is primarily due to the prepayment and incurred costs of RA purchases.

FISCAL IMPACT:

There is no financial impact associated with receiving this report.

ATTACHMENT(S):

1. August 31, 2024 Financial Report

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FINANCIAL REPORT
Fiscal Year to Date
As of August 31, 2024

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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 August 31, 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
October 8, 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 $ 140,676,537
Accounts receivable, net of allowance 37,198,919
Accrued revenue 32,626,700
Other receivables 6,757,306
Loan receivable 190,718
Prepaid expenses 38,546,871
Deposits 17,146,652
Investments 47,706,501
Total current assets 320,850,204
Noncurrent assets
Investments 7,489,288
Deposits 23,182
Loan receivable 1,330,079
Capital assets, net of depreciation and amortization 3,862,117 Total noncurrent assets 12,704,666
Total assets 333,554,870
Current liabilities
Accrued cost of electricity 49,487,104
Accounts payable 1,235,125
Other accrued liabilities 9,522,775
User taxes and energy surcharges due to other governments 1,840,548 Lease liability 323,140
Security deposits - energy suppliers 1,149,299
Total current liabilities 63,557,991
Noncurrent liabilities
Security deposits - energy suppliers 10,303,125
Lease liability 869,588
Total noncurrent liabilities 11,172,713
Total liabilities 74,730,704
Net investment in capital assets 2,669,389
Unrestricted 256,154,777
Total net position $ 258,824,166

NET POSITION
As of August 31, 2024

STATEMENT OF NET POSITION

CENTRAL COAST COMMUNITY ENERGY
ASSETS

LIABILITIES

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OPERATING REVENUES
Electricity sales, net 487,788,613$
Other income 92,537
Total operating revenues 487,881,150

OPERATING EXPENSES
Cost of electricity 453,130,808
Contract services 11,976,914
Staff compensation 7,060,915
Other operating expenses 1,541,907
Program incentives 7,288,456
Depreciation and amortization 535,752
Total operating expenses 481,534,752
Operating income (loss) 6,346,398

NONOPERATING REVENUES (EXPENSES)
Investment income 10,667,847
Interest and financing costs (61,404)
Nonoperating revenues (expenses) 10,606,443
CHANGE IN NET POSITION 16,952,841
Net position at beginning of period 241,871,325
Net position at end of period $ 258,824,166
Eleven Months Ended August 31, 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 484,156,635$
Other operating receipts 95,100
Receipts of deposits and collateral 41,215,860
Payments to suppliers for electricity (493,400,961)
Payments of deposits and collateral (70,673,273)
Payments for other goods and services (13,907,880)
Payments for program incentives (7,975,264)
Payments of staff compensation (6,962,372)
Payments of taxes and energy surcharges to other governments (8,479,437) Net cash provided by operating activities (75,931,592)

CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES
Payments of financing costs (5,944)
Net cash provided by non-capital financing activities (5,944)

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Payments of lease liability (330,104)
Payments to acquire capital assets (2,399,528)
Net cash provided (used) by capital and related financing activities (2,729,632)

CASH FLOWS FROM INVESTING ACTIVITIES
Investment income received 7,485,132
Proceeds from investment sales 124,932,461
Principal payments received of loan receivable 187,201
Purchase of investments (109,294,958)
Net cash provided (used) by investing activities 23,309,836 Net change in cash and cash equivalents (55,357,332)
Cash and cash equivalents at beginning of year 196,033,869 Cash and cash equivalents at end of period $ 140,676,537 Eleven Months Ended August 31, 2024

STATEMENT OF CASH FLOWS

CENTRAL COAST COMMUNITY ENERGY

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Operating income (loss) $ 6,346,398
Adjustments to reconcile operating income (loss) to net cash provided by operating activities
Depreciation and amortization expense 535,752
(Increase) decrease in:

Accounts receivable, net of allowance (4,439,644)
Accrued revenue (7,761,595)
Other receivables (2,823,424)
Prepaid expenses (38,166,660)
Deposits (10,652,558)
Increase (decrease) in:

Accrued cost of electricity 564,628
Accounts payable (1,532,099)
Other accrued liabilities 715,645
User taxes and energy surcharges due to other governments 86,821 Security deposits - energy suppliers (18,804,856)
Net cash provided by operating activities (75,931,592)$

CENTRAL COAST COMMUNITY ENERGY
STATEMENT OF CASH FLOWS (continued)
Eleven Months Ended August 31, 2024

RECONCILIATION OF OPERATING INCOME (LOSS) TO NET

CASH PROVIDED BY OPERATING ACTIVITIES

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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 for the periods ended August 31, 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
October 8, 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 $ 54,914,397 $ 50,793,000 $ 4,121,397 8% $ 494,363,650 $ 512,547,000 $ (18,183,350) 96% $ 563,933,447 $ 69,569,797 Uncollectible accounts (730,186) (625,000) (105,186) 17% (6,575,037) (6,875,000) 299,963 96% (7,500,000) (924,963) Electricity sales, net 54,184,211 50,168,000 4,016,211 8% 487,788,613 505,672,000 (17,883,387) 96% 556,433,447 68,644,834 Investment and miscellaneous income 910,317 533,000 377,317 71% 10,760,384 5,867,000 4,893,384 183% 6,400,000 (4,360,384) Total revenues and other sources 55,094,528 50,701,000 4,393,528 9% 498,548,997 511,539,000 (12,990,003) 97% 562,833,447 64,284,450 EXPENDITURES AND OTHER USESCurrent Expenditures Cost of energy 61,402,103 69,869,000 8,466,897 12% 454,536,885 443,004,000 (11,532,885) 103% 520,297,514 65,760,629 Salaries and benefits 707,877 795,000 87,123 11% 7,060,915 8,742,000 1,681,085 81% 9,537,076 2,476,161 Services and supplies 2,918,202 2,750,000 (168,202) -6% 20,273,003 30,249,000 9,975,997 67% 32,998,857 12,725,854 Total current expenditures 65,028,182 73,414,000 8,385,818 11% 481,870,803 481,995,000 124,197 100% 562,833,447 80,962,644 Surplus (deficit) (9,933,654)$ (22,713,000)$ 12,779,346$ -56% 16,678,194$ 29,544,000$ (12,865,806)$ -44% -$ (16,678,194)$ Annual

CENTRAL COAST COMMUNITY ENERGY

BUDGETARY COMPARISON SCHEDULE
Current Month and Eleven Months Ended August 31, 2024
Current Month
Variance fav. (unfav.)
Year-To-Date
Variance fav. (unfav.)

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Budget Item YTD Variance Comment
Electric Sales Revenue (3.5%) Sales revenue includes revenues actually billed to customers as well as estimated customer usage during the reporting period that is not yet billed.

Cost of Energy 2.6% 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 (19.2%) Staffing expenses are under budget due to the timing of new hires.

Professional Services (56.4%) This category includes accounting, IT, technical and other consultants.

Legal Costs (21.7%) This category includes outside legal costs for regulatory and energy procurement needs.

Marketing and customer enrollment 13.3% Variance is mostly due to the lower than anticipated costs of recent customer enrollments.

Data Management Services 3.1% These fees non-discretionary and are charged on a per customer basis.

Utility Service Fees (3.3%) These are PG&E and SCE fees charged on a per customer basis.

Other General & Administrative (45.6%) This category includes occupancy costs, industry membership dues, and other general and administrative costs.

Energy and Related Programs (41.4%) Programs expenses have generally been delayed until future periods Budget Commentary for significant items

CENTRAL COAST COMMUNITY ENERGY
October 1, 2023 through August 31, 2024

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-13.3%
-39.3%
Act
Bud
$33.3
$62.7
$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
$487.8
$505.7
$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) 422 393 409 399 358 367 360 388 389 424 427 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
427 GWh

STD MARGIN
-$7.2M (-13%)
Δ in NET ASSETS
-$9.9M
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: August 2024

CUSTOMERS
460,000
ACTIVE
August revenue of $55.1M accounts for 427
GWh in net retail consumption, 4 GWh
above budget.

YTD Electricity revenue is $488M compared
to budget of $506M. YTD Direct Margin
(defined as Electricity Sales less Cost of
Energy) of $33M is below budget by $29M.

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

The charts below display cumulative
revenue and margin $ vs budget.
30%
48%
23%
36%
47%
16%
Res
Com
Ag
YTD Month
Revenue $55.1
C.O.E. $61.4
OpEx $3.6
Net Income -$9.9
-$7.2
-$19.7
Act
Bud
Margin $
10 32%
47%
21%
40%
45%
15%
Res
Com
Ag
YTD Month

REVENUE
$55.1M
Margin %

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Return of Investments YTD Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep CASH AND CASH EQUIVALENTSRiver City Bank/ Chase - Money Market and other Interest Earning AccountsFunds Invested - Average Balance 132,319,400$ 114,651,102$ $ 105,356,390 $ 104,396,252 $ 103,895,294 $ 136,670,988 $ 89,128,674 $ 103,094,923 $ 99,733,192 $ 89,388,999 $ 83,847,645 Gains/Losses/Interest $ 3,877,287 $ 406,536 345,045.39 356,733.82 348,153.12 328,669.77 467,310.22 292,100.83 359,957.02 342,604.48 323,544.31 306,632.12 Average APY 3.69% 3.61% 4.06% 4.00% 3.80% 4.10% 3.93% 4.19% 4.12% 4.34% 4.39%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 $ 6,700,000 $ - $ - $ - Gains/Losses/Interest $ 1,277,633 178,385.54 213,485.85 236,035.13 205,868.28 193,103.80 116,602.81 103,270.38 30,881.04 - - - Average APY 5.35% 5.12% 7.08% 6.18% 7.72% 4.66% 6.20% 5.53%RBC GAM / Principal Financal/ Schwab/FidelityFunds Invested - Average Balance $ 84,038,064 $ 89,456,032 $ 104,918,181 $ 110,378,734 $ 109,851,410 $ 85,196,666 $ 102,094,893 $ 116,668,316 $ 123,250,987 $ 123,914,223 $ 124,555,241 Gains/Losses/Interest $ 5,039,693 351,852.83 417,968.37 462,148.76 463,382.88 411,214.03 409,319.23 398,176.83 488,291.25 481,788.55 572,560.60 582,989.80 Average APY 5.02% 5.61% 5.29% 5.04% 4.49% 5.77% 4.68% 5.02% 4.69% 5.54% 5.62%

CENTRAL COAST COMMUNITY ENERGY
Investment Summary
October 1, 2023 through August 31, 2024

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Current 0 - 30 Days 31 - 60 Days 61 - 90 Days > 91 Days A/R Balance $ 24,408,154 $ 11,323,030 $ 985,887 $ 320,114 $ 161,734 $ 37,198,919

CENTRAL COAST COMMUNITY ENERGY
Summary of Accounts Receivable, Net of Bad Debt Allowance As of August 31, 2024

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Community Advisory Council
Wednesday, October 2, 2024
4:00 PM
Central Coast Community Energy
70 Garden Court, Suite 300
Monterey, CA 93940

MINUTES
The meeting was called to order at 4:12PM with 7 members attending and a quorum established.

Members Present: 3CE Headquarters: Bauman, Damhorst, Osmer, Sedano, Stedman, Stotler, Chair Johnson Members Absent: Allen, Best, McClish, Soto, Vice Chair Tuitavuki The chair opened the public comment period on the consent calendar and items not listed on the agenda.

There were no public comments.

The Chair closed public comment.

REGULAR AGENDA
MOTION: Moved by Member Bauman, seconded by Member Osmer to approve the minutes as submitted.

ACTION: The motion carried with a roll call vote: 7/0/5 AYES: Bauman, Damhorst, Hughes, Osmer, Sedano, Stotler, Chair Johnson NOES: None
ABSENT: Allen, Best, McClish, Soto, Stedman

1. Approved minutes from the August 7, 2024, meeting of the Community Advisory Council

2. CEO Report
a. Staffing Update
b. Resource Adequacy (RA) Reform
c. CEC Load Management Standards (LMS)
The Chair opened public comment period.

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