Agenda packet — Central Coast Community Energy (3CE) Policy Board, March 18, 2026

Policy Board of Directors
March 18, 2026
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
Santa Cruz, CA 95060
County Sheriff’s Felton Substation
6062 Graham Hill Road, Suite A
Felton, CA 95018
City of Greenfield
108 El Camino Real
Greenfield, CA 93927
County of San Luis Obispo
Government Building
1055 Monterey Street,
San Luis Obispo, CA 93408
City of Santa Maria
City Hall
110 East Cook Street, Council Chambers
Santa Maria, CA 93454
City of Carpinteria
City Hall
5775 Carpinteria Avenue
Carpinteria, CA 93013
Hyatt Regency
1209 L Street
Sacramento ca 95814
Marriott Marquis Washington, DC
901 Massachusetts Ave NW
Washington, DC, 20001
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://pub-3ce.escribemeetings.com/ 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
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 Matters Not Listed on the Agenda
The public may provide comments on any item within the Board's jurisdiction but not on the Agenda. The Board may not take action at this meeting on any item not listed on the Agenda other than to refer the matter to staff or set if for a future meeting. Speakers are limited to 3 minutes each.

CLOSED SESSION

1. CONFERENCE WITH REAL PROPERTY NEGOTIATORS – Government Code Section 54956.8 Property: 4610 West Walnut Street, Soquel, CA (APN 030-201-78)
a. Agency negotiator: Robert Shaw and DeWayne Woods
b. Negotiating parties: Alan Palmer, Palmer Alan Blair Trust c. Under negotiation: Price and Terms

2. Public Employee Performance Evaluation – Position: Chief Executive Officer-Government Code section 54957

3. CONFERENCE WITH LABOR NEGOTIATORS – Agency Negotiators Jim Lewis and Matt Hufaker - Position: Chief Executive Officer - Government Code section 54957.6

CONSENT CALENDAR

4. Approve minutes from the January 28, 2026, meeting of the Policy Board of Directors

5. Consider and Approve Amendment No. 1 to the Employment Agreement between Robert M. Shaw and Central Coast Community Energy for service as Chief Executive Officer

6. FY 2025-26 Energy Programs Update

7. Quarterly Regulatory and Legislative Update

8. Financial Report for the period of October 1, 2025, through December 31, 2025

9. Investment Performance Report for the period of October 1, 2025, through December 31, 2025

REGULAR AGENDA

10. CEO Report
a. Community Advisory Council Report
b. 3CE Advocacy Supports Long Duration Storage and Flexibility c. State Legislative Update

11. Receive update on over-subscription of the Residential Battery Rebate Program participation and provide direction regarding staff recommendation to modify and monitor program

12. Authorization to Proceed with Second Energy Prepayment Transaction (Estimated $800 Million – $1.2 Billion)

13. Receive a presentation on 3CE’s FY 2024-25 Audited Financial Statements

14. Adopt Resolution PB-2026-02 to establish a temporary residential rate “3CFlex” to support customers impacted by the California Public Utilities Commission’s Power Charge Indifference Adjustment (PCIA) decisions.

And approve 3CFlex effective May 1, 2026, through December 31, 2026, with total residential enrollment capped at no more than 10% of residential load
Adjournment

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Policy Board of Directors
January 28, 2026
Regular Meeting
9:30 AM
County of Santa Cruz
701 Ocean Street,
Fifth Floor Redwood Room
Santa Cruz, CA 95060
City of Watsonville
City Hall
275 Main Street
Watsonville, CA 95076
City of Greenfield
108 El Camino Real
Greenfield, CA 93927
County of San Luis Obispo
Government Building
1055 Monterey Street,
San Luis Obispo, CA 93408
County of Santa Barbara
Third District Solvang Office
1745 Mission Drive
Solvang, CA 93463
County of Santa Barbara
County Administration Building
105 East Anapamu Street, First Floor
Santa Barbara, CA 93101
City of Santa Maria
City Hall
110 East Cook Street, Council Chambers
Santa Maria, CA 93454
City of Carpinteria
City Hall
5775 Carpinteria Avenue
Carpinteria, CA 93013

MINUTES
The meeting was called to order at 9:31 AM with 11 members attending from 7 noticed locations and a quorum established.

Director’s Present:

HQ: Barajas, Curro (arrived at 9:49am) Daniels, Williamson County of Santa Cruz: Martinez, Timm
City of Watsonville: Dutra (arrived at 9:55am)
County of San Luis Obispo: Bourbeau, Wixom, Vice Chair Ortiz-Legg City of Santa Maria: Patino
County of Santa Barbara 3
rd District: Hartmann
City of Carpinteria: Nomura
Directors Absent: Delgado, McCorry-Driscoll, Morales, Silva, White, Chair Keeley Chair called for Corrections or Additions to the agenda.

Clerk announced that there were no changes.

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PRESENTATION

1. 2025 Annual Impact Report Presentation
Chair opened public comments
No public comments received.

Chair closed public comment period.

REGULAR AGENDA

2. Adopt Resolution No. PB-2026-01 approving the cost-based electric generation rates through April 2027
Chair opened public comments
No public comments received.

Chair closed public comment period.

MOTION: Moved by Director Curro, seconded by Director Barajas to approve ACTION: Motion carried with a roll call vote: 13/0/6
AYES: Barajas, Bourbeau, Curro, Daniels, Dutra, Hartmann, Martinez, Nomura, Patino, Timm, Williamson, Wixom, Vice Chair Ortiz-Legg
NOES: None
ABSENT: Delgado, McCorry-Driscoll, Morales, Silva, White, Chair Keeley Adjourned at 11:05 AM

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Staff Report Item 5
TO: 3CE Policy Board of Directors
FROM: Matt Huffacker, Chair of the Operations Board of Directors Jim Lewis, Vice Chair of the Operations Board of Directors SUBJECT: Consider and Approve Amendment No. 1 to the Employment Agreement between Robert M. Shaw and Central Coast Community Energy for service as Chief Executive Officer
DATE: March 18, 2026
RECOMMENDATION:

This recommends the Policy Board consider and approve Amendment No. 1 to the Employment Agreement between Robert M. Shaw (Shaw) and Central Coast Community Energy (3CE) for service as Chief Executive Officer
BACKGROUND:
3CE and Mr. Shaw entered into an Employment Agreement December 20, 2022 to establish terms for Employee’s service as Chief Executive Officer beginning March 1, 2023 with a five-year term ending March 1, 2028.

DISCUSSION/ANALYSIS:

Mr. Shaw demonstrates a high level of competence managing and leading 3CE through the contracting and delivery of renewable power toward 3CE’s 100% Clean and Renewable goal, managing 3CE’s financial position, innovating energy programs to support customers, and supporting local communities through thoughtful engagement surrounding energy issues. Mr. Shaw’s leadership extends to supporting statewide CCA industry activities, including serving as Chair of Cal-CCA, Chair of CCPower, and Vice Chair of California Community Financing Authority The Proposed Amendment No. 1 provides a five percent (5%) increase to Mr. Shaw’s base salary as a merit adjustment in recognition of performance
The Proposed Amendment No. 1 does not alter any other terms of the Employment Agreement.

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FISCAL IMPACT:

The fiscal impact has been factored into the FY 2025-26 Budget.

CONCLUSION:

The proposed Amendment No. 1 aligns Mr. Shaw’s compensation with his demonstrated experience and skill.

ATTACHMENT(S):

1. Amendment No. 1 to the Employment Agreement between Robert M. Shaw and Central Coast Community Energy for service as Chief Executive Officer

2. Employment Agreement between Robert M. Shaw and Central Coast Community Energy for service as Chief Executive Officer

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AMENDMENT NO. 1 to EMPLOYMENT AGREEMENT Page 1 of 2
ROBERT M. SHAW-CENTRAL COAST COMMUNITY ENERGY
AMENDMENT NO. 1 to the

EMPLOYMENT AGREEMENT BETWEEN
CENTRAL COAST COMMUNITY ENERGY AND ROBERT M. SHAW

FOR SERVICE AS CHIEF EXECUTIVE OFFICER
WHEREAS, Effective December 20, 2022, Central Coast Community Energy, a joint powers authority (“Agency”) and Robert M. Shaw (“Employee”) entered into an Employment Agreement (“Employment Agreement”) to establish the terms of the Employee’s service as Chief Executive Officer.

WHEREAS, by its terms, the Employment Agreement included a 5-year term as CEO from March 1, 2023 to March 1, 2028;
WHEREAS, by its terms, the Employment Agreement included Cost of Living Adjustments and a compensation adjustment following the “demonstration of a successful first-year performance review.”
WHEREAS, Employee and Agency now desire to amend the Employment Agreement to provide a 5% merit increase to the CEO’s salary.

NOW, THEREFORE, in consideration of the mutual promises and conditions acknowledged by the parties, the Employment Agreement is amended as follows:

1. 3.b Merit Adjustment as added to the Agreement as follows:

3.b Merit Adjustment: Effective as of April 01, 2026, Employee’s base salary, as adjusted from time to time under this Agreement, shall be increased by five percent (5%) as a merit adjustment in recognition of performance.

This Amendment No. 1 to the Employment Agreement Between Central Coast Community Energy and Robert M. Shaw as Chief Executive Officer shall not alter any other terms of the Employment

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AMENDMENT NO. 1 to EMPLOYMENT AGREEMENT Page 2 of 2
ROBERT M. SHAW-CENTRAL COAST COMMUNITY ENERGY
Agreement, each of which remain in full force and effect.

I hereby accept all terms and conditions of the above Agreement, and I hereby affirm that I have not obtained employment through any false representation, or knowingly withheld any facts or circumstances that would, if disclosed, affect my employment. I understand that all agreements, rights and/or benefits will be invalid if obtained by or through misrepresentation of any material fact.
________________________________________ Dated: ______________________________ Robert M. Shaw
________________________________________ Dated: ______________________________ Fred Keely, 3CE Policy Board Chair
Central Coast Community Energy
________________________________________ Dated:______________________________ Charles J. McKee, General Counsel
Central Coast Community Energy
Approved as to Form

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Staff Report Item 6
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Inaara Muhammad, Manager of Energy Programs SUBJECT: FY 2025-26 Energy Programs Update
DATE: March 18, 2026
RECOMMENDATION:

Receive an update on 3CE’s FY 2025-26 Energy Programs.

BACKGROUND:
3CE’s Energy Programs support 3CE’s mission by serving 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 strengthen participation for priority communities. Currently, 3CE offers 10 programs and two pilots 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 and using this analysis to improve the impact of 3CE’s Energy Programs.

The first quarter of FY 2025-26 showed increased participation in 3CE's Energy Programs, largely due to federal funding decisions, and new member agencies engaging in electrification planning. To maximize programs’ accessibility to all customers, and to continue program administration through the end of the fiscal year, rebates have been adjusted for 3CE’s Electrify Your Ride and E-bus programs effective January 1. Furthermore, 3CE has introduced a new rebate type for bidirectional chargers, which allows 3CE to collect data relevant to the design of future energy optimization programs. Now, staff are

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implementing steps to adjust 3CE’s Residential Battery Rebate Program rebate and capacity amounts to help address the significant increase in applications.

The table below highlights the agency’s programs’ fiscal impact so far through February 2026.

IMPACT FY 2025-26 (to date)
GHG reductions1 Over 2,766 MT CO2e
Load Shifted Over 6.2 MWh daily
Heat Pump Water Heater & HVAC Units 108 units
Induction Cooktops 2 units
All-Electric New Construction 93 units
E-Buses 7 E-buses
Electric Vehicles 604 EVs
EV Chargers 968 EV Chargers
Ag Equipment 7 rebates
Total Incentives Distributed2 $5.2 million
Table 1: Energy Programs Impact in FY 2025-26 (to date) 3CE’s Energy Programs Portfolio Analysis Update (Attachment 1) provides a detailed look at individual Energy Programs in FY 2025-26. The update shares a variety of program performance metrics, including customer participation, all-electric purchases and installations, reduced greenhouse gas emissions, and performance on equity (e.g., incentives and support for income-qualified customers). The update also describes strategic initiatives currently underway to enhance 3CE’s Energy Programs portfolio through pilots and new program offerings.

Below are several ongoing strategic initiatives across Energy Programs’ focus areas.

Transportation Electrification
Technical Assistance: On January 12th, 3CE published a Request for Proposals seeking a vendor to provide technical assistance for electric vehicle planning and EV charger development. The improved technical assistance service is planned to launch at the beginning of FY 2025-26 to support commercial, multifamily, and member agency customers in EV and EV charger planning and procurement.

Building Electrification
Electrify Your Home: 3CE is developing options for a virtual home assessment to enhance the Electrify Your Home program. The assessment will provide residential

1 Does not currently include estimated GHG reductions through 3CE’s Residential Battery Rebate Program. 2 Does not include applications actively being processed

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customers with personalized reports on home energy use, electrification opportunities, and available rebates. A recommendation is expected to be provided to the Operations Board in the third quarter of FY 2025-26.

Agricultural Electrification
Ag Electrification Program: 3CE is actively reviewing its Ag Electrification Program in collaboration with the Community Advisory Council (CAC). At the February CAC meeting, 3CE staff presented findings from nine focus groups held in November and December, along with preliminary new program concepts, including additional rebates, technical assistance, and equipment demonstration events. These concepts will continue to be developed through a second round of focus groups to be held in March and April across 3CE’s service area.

Energy Optimization
Residential Battery Rebate Program (RBRP) / Virtual Power Plant (VPP): In February 2026, 3CE’s Residential Battery Rebate program supported over 6.2MWh of load shifting daily between peak hours 4pm-9pm, a 68% increase from January. This is partly due to an increase in applications in Q1 as customers pursued installation projects before federal incentives sunset on 12/31. Staff are actively developing a Virtual Power Plant (VPP) pilot that will scale the impact of the residential battery rebate program through active load shifting of various Distributed Energy Resources (DERs) including batteries, thermostats, and EVs.
3CE’s customer relationship management system, which was implemented last fiscal year, has enabled energy programs to remain open as 3CE transitions between fiscal years. 3CE’s website has been updated to communicate any changes to programs effective at the start of the fiscal year and calendar year.

FISCAL IMPACT:

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

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

ATTACHMENT(S):

1. 3CE Energy Programs Analysis Update

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3CE’s Energy Programs Update
This report provides updates on Central Coast Community Energy’s (3CE) Energy Programs and Pilots. 3CE continually tracks energy programs’ growing participation and impact in reducing greenhouse gas emissions and supporting the local economies in which 3CE customers live and work.

The table below highlights the agency’s programs’ impact through February 2026.

IMPACT FY 2025-26 (to date)
GHG reductions1 Over 2,766 MT CO2e
Load Shifted Over 6.2 MWh daily
Heat Pump Water Heater & HVAC Units 108 units
Induction Cooktops 2 units
All-Electric New Construction 93 units
E-Buses 7 E-buses
Electric Vehicles 604 EVs
EV Chargers 968 EV Chargers
Ag Equipment 7 rebates
Total Incentives Distributed2 $5.2 million
3CE’s energy programs’ impact continues to increase, serving 3CE’s mission to support all customers in their transition to renewable resources, to drive GHG emissions reductions, and to promote local economic growth across the Central Coast. 1 Does not currently include estimated GHG reductions through 3CE’s Residential Battery Rebate Program. 2 Does not include applications actively being processed

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Transportation Electrification

1.Electrify Your Ride
Over 2,585 MTCO2e avoided thus far
Equal to 603 gas cars off the road for one year
Program Purpose & Overview
Electrify Your Ride (EYR) is 3CE’s flagship transportation program, intended to reduce GHG emissions and increase EV adoption by providing residential and commercial customers with rebates for EV purchases and EV charger installations. Program funds are available first come, first served. Enhanced incentives are available for CARE/FERA customers, or income-qualified participants. Technical assistance is available for multifamily and commercial customers planning EV charging projects.

Program Design Updates
Jan. 1st, 2026: To maximize programs’ accessibility for all customers and to continue program administration through the end of the fiscal year, rebates have been adjusted. 3CE has introduced a new rebate type for bidirectional chargers, which can help customers power their homes and shift energy use to less expensive times of the day by drawing power from their electric vehicle’s battery.

Over $32M in all-electric purchases
supported
Over 1041 applications approved
across all 5 counties
Figure 1.1: % of applications across counties
1,570 EV, EV Charger, and Electrical
Upgrades supported this fiscal year
Figure 1.3: Rebates approved by incentive type
5 commercial and multi-family customers
receiving technical assistance
27% rebates to income-qualified customers
Figure 1.2: Incentive distribution to income-qualified
customers

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Transportation Electrification

2.Electric Bus (E-bus) Program
Over 49 mtCO2e avoided thus far
Program Purpose & Overview
3CE’s Electric Bus program enables public sector electrification by incentivizing all-electric buses throughout the 3CE service area. The program reduces GHG emissions and harmful pollutants from public transportation serving students, farmworkers, and community members. Program funds are available first come, first served, and can be assigned to a manufacturer. All funded E-buses must be domiciled and charged at 3CE-enrolled sites.

Program Design Updates:

January 1st, 2026: To maximize programs’ accessibility to all customers and to continue program administration through the end of the fiscal year, rebates have been adjusted to support two tiers of e-bus types.
2 school districts & 1 transit agency
supported cross two counties
7 all electric bus supported

86% of buses to a Title 1 school or
disadvantaged community (DAC)
Figure 2.1: % buses for DAC/Title 1 School, by county
$4M in all-electric
purchases enabled through
3CE’s E-Bus program
Figure 2.2: Rebates approved by e-bus type
1 0
6 0
1 2
3 4
5 6
7 Transit Bus Shuttle Van School Bus - Type
C/D

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Transportation Electrification

3.Plan, Charge, and Electrify Your Fleet
12 Member Agencies committed to zero-emission fleet planning and implementation
Program Purpose & Overview
3CE’s Fleet Electrification programs reduce GHG emissions from medium and heavy-duty fleets by providing Member Agencies with incentives and technical assistance for zero-emission fleet planning and implementation at 3CE-enrolled sites. Program funds are available first come, first served.

Incentive Offerings:
- PLAN: Plan Your Fleet (PYF) provides no-cost technical assistance including fleet replacement planning, project design and engineering, EV charging recommendations, and funding plans.
- CHARGE: Charge Your Fleet (CYF) provides rebates for Level 2 EV Chargers and Level 3 DC Fast Chargers purchase and installation.
- ELECTRIFY: Electrify Your Fleet (EYF) provides rebates for electric vehicle purchase or lease, covering light, medium, and heavy-duty vehicles, plus electric motorcycles.

Program Design Updates
Oct. 1st, 2025: To streamline access and expand funding opportunities, 3CE has combined fiscal-year rebate caps for the Electrify Your Fleet and Charge Your Fleet programs. Member Agencies are eligible for up to $300k in total funding for the purchase or installation of electric vehicles, EV supply equipment, and associated infrastructure.
7 cities and
counties
Developing Fleet
Replacement
Plans
10 cities and
counties
Developing charging
infrastructure plans
and/or site designs
Over $256k in all-electric purchases and
installations supported
Figure 3.1: rebates distributed by incentive type
Cities and Counties engaged in zero-emission fleet
planning and implementation include…

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Transportation Electrification

4.EV Charger Asset Pilot
Nine Level 2 and two DC Fast Chargers planned across three pilot sites Program Purpose & Overview
3CE’s EV Charger Asset Pilot addresses the need for additional Electric Vehicle Supply Equipment (EVSE) and infrastructure across the 3CE service area through the deployment of a phased EV Charger asset ownership program. The pilot examines charger asset ownership as a potential step in advancing equitable transportation electrification solutions across 3CE’s service area. The pilot encompasses Level 2 and Level 3 DC Fast Charger design, construction, and operation across three categories: community resilience hubs, corridor charging, and EVSE at Member Agency sites.

Pilot Updates
Workplace Charging at 3CE’s San Luis Obispo Office: The EV chargers are operational and actively used by San Luis Obispo office staff. Employee access to charging began in September 2025. The project remains in ongoing pilot testing, with staff usage patterns and performance data being monitored to inform future workplace charging decisions.

Workplace Charging at 3CE’s Soquel Office: The EV chargers are fully operational and support day-to-day staff charging needs. Employee access began in November 2025. The project is in ongoing pilot testing, with utilization and operational performance being tracked to evaluate program outcomes.

Public Charging in Santa Maria: On October 21, the City of Santa Maria City Council approved the Site Lease License Agreement for 3CE’s Public EV Charger Asset Pilot. Following this approval, the project kicked off on December 10 and is moving into the construction phase.

The project includes Level 2 and DCFC EV charging stations located near the Santa Maria Public Library, with completion anticipated by Q3 of FY 2025–26.

Future Pilot Sites: 3CE staff are exploring additional pilot locations for EV charging in consideration of designing and implementing an EV Charging Master Plan. Additional sites will further inform 3CE’s examination of agency-managed infrastructure to expand access to EV charging throughout the Central Coast.
10 ports
across 6 Level
2 chargers
100% total
charger
uptime

3.42 t GHG
emissions avoided
Equivalent to planting 88
trees
50% increase
in staff EV
adoption

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Building Electrification

5.Electrify Your Home Program
Over 97 MT CO2e avoided, equal to over
13 homes’ energy use for one year
Program Purpose & Overview
3CE's Electrify Your Home Program (EYH) promotes residential building decarbonization by replacing fossil-fuel powered water heating, space heating and cooking equipment with high-efficiency electric and heat pump appliances for single family and multifamily properties.

Applications are open to contractors and homeowners with program funds available on a first come, first served basis.

Program Design Updates
October 1, 2025: The program’s next iteration relaunched in-house, and includes design enhancements developed in collaboration with the Community Advisory Council. These included expanded contractor eligibility, new eligible appliances, and a customer-focused application.

Moreover, bringing program administration in-house will leverage 3CE staff expertise to improve customer experience and streamline program operations
Figure 5.2: Income-qualified participants by county
15% of rebates distributed to income-qualified customers 179 rebates in fiscal year 2025-26
Figure 5.1: Rebates approved by incentive type
EYH supported over 23 unique, local installers across five counties to complete over $1.5M in all-electric and heat pump installations EYH

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Building Electrification

6.New Construction Electrification Program
93 new, all-electric housing units built across 3CE’s service area Program Purpose & Overview
3CE’s New Construction Electrification Program (NCEP) reduces GHG emissions by incentivizing the development of all-electric housing in 3CE’s service area. NCEP provides housing developers incentives to build all-electric housing projects including water heating, space heating, and cooking appliances. Enhanced incentives are available for affordable housing projects and single-family disaster rebuilds. Program funds are available first come, first served. 5 1 1
Figure 6.1: all-electric housing units incentivized by county NCEP supported 4 local contractors
to build all-electric housing across
3CE’s service area
86 All-electric Affordable
Housing Units
Accessory Dwelling
Units
Disaster Rebuild Market Rate Housing

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Building Electrification

7.Reach Codes Program
Codes adopted by 3CE’s cities & counties are
anticipated to impact 310 permits per year
Program Purpose & Overview
3CE’s Reach Code program reduces GHG emissions from the built environment by providing technical assistance to 3CE Member Agency jurisdictions to adopt and codify “Reach Codes” that promote building electrification and EV infrastructure. Technical assistance includes customized code language development, staff presentations, board advocacy, and code enforcement tool creation.

Implemented reach codes update local building codes and ordinances for new residential and commercial construction, and major remodel projects, and align with the 2022 California statewide building code update.

Program Design Updates
3CE is closely monitoring impacts from recent legislative decisions and exploring available support opportunities.

CODE TYPE & IMPACT
Single Family Existing Buildings-Flexpath:

Flexible menu of energy efficiency,
electrification, and electric readiness measures
for major renovations
Single Family Existing Buildings- Air
Conditioning to Heat Pump:

Property owners follow energy efficiency
measures or install heat pump technology at
time of replacement
3 Reach Codes in process,
adopted or codified across 2
cities
Figure 7.2: Types of Reach Codes pursued
Figure 7.1: # of codes by city
Cities and Counties engaged in reach code
planning and implementation include…

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Agricultural Electrification

1.Agricultural (Ag) Electrification Program
35 tCO2 avoided
Program Purpose & Overview
3CE’s Agricultural (Ag) Electrification program avoids GHG emissions associated with fossil fuel-powered agricultural equipment by incentivizing the purchase of all-electric equipment alternatives. The program provides rebates to 3CE customers in and/or supporting the agricultural industry for all-electric equipment purchases to support business operations. Enhanced incentives are available for small businesses and businesses that experienced loss/damage of equipment due to declared natural disasters. Customers are eligible for up to two rebates per fiscal year, and program funds are available first-come, first-served.

Program Design Updates
As part of its review of the Agricultural Electrification Program, 3CE staff hosted nine focus groups in November and December 2025. Agricultural stakeholders from across the service area shared feedback on barriers to electrification and identified opportunities for additional support, including enhanced rebates, technical assistance, and demonstration projects. Staff will present key takeaways and potential program improvements at the Community Advisory Council meeting in February.
100% of rebates to small businesses
3CE incentives leveraged for over $278,388 across 7 all-electric purchases including… Figure 8.2: % rebate dollars to small businesses, by county 4 Counties received rebates
Figure 8.1: % of projects funded, by county

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Energy Optimization

2.Residential Battery Rebate Program
Over 6.2 MWh of load shifted daily
during peak hours across 3CE service area
Program Purpose & Overview
3CE’s Residential Battery Rebate Program achieves load shifting during peak hours through rebates for the purchase and installation of residential, behind-the-meter battery systems. The program helps solar and non-solar customers manage energy consumption, respond to price signals, and reduce demand during net peak hours. Program funds are available first-come, first-served.

Customers enrolled in NEM 2.0 who elect to transition to NBT early, CARE/FERA-enrolled customers, and customers designated as medical baseline are eligible for enhanced incentives.

Batteries must be programmed to discharge 50% of capacity daily between 4 p.m. and 9 p.m.

Program Design Updates
February 2026: As a result of increase in applications received and improved processing timeline, the program supported over 6.2MWh of load shifting daily between 4pm-9pm, a 68% increase from January 2026.

December 2025: Staff introduced Evergreen connect links, which allow all customers to connect their batteries to 3CE’s load shift tracking without waiting for a unique link. This new feature is intended to reduce application processing time and provide streamlined customer experience.

Figure 9.1: daily load shift during peak hours
395 applications across all five counties
Figure 9.2: % participation by county
16% of applications from CARE/FERA or
Medical Baseline enrolled customers
155 customers using scheduling
assistance
Over 35 local
contractors actively
installing battery systems
for 3CE customers

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Energy Optimization

10. Hourly Flex Pricing Pilot 1 & 2
Over 16,000 MWh annual load enrolled
Program Purpose & Overview
3CE’s Hourly Flex Pricing (HFP) Pilot offers customer savings and operational benefits to agricultural, residential, and commercial 3CE customers through real-time, dynamic price signals.

In partnership with PG&E, both Pilot 1 (agricultural) and Pilot 2 (commercial and residential) offer a variety of Automation Service Providers (ASPs) to help enrolled customers optimize load in response to hourly price signals. Expanded Pilot 1, implemented in partnership with Polaris Energy Services, also includes system reliability benefits for agricultural customers through incentivized equipment automation. HFP Pilots 1 and 2 are currently in their first year of implementation. 74% of annual load enrolled from
commercial meters
Figure 10.1: load enrolled by customer type
80 meters across all three customer
classes
Figure 10.2: pilot participation by customer type

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Staff Report Item 7
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Jerri Strickland, Director of Regulatory Affairs & Compliance Das Williams, Director of Legislative Affairs
SUBJECT: Quarterly Regulatory and Legislative Update
DATE: March 18, 2026
RECOMMENDATION:

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

DISCUSSION:

The Regulatory and Legislative Quarterly Updates prepare a summary of key proceedings and policy matters impacting 3CE’s customers, business operations, and climate goals.

FISCAL IMPACT:

There is no financial impact associated with receiving this report.

ATTACHMENT(S):

1. Quarterly Regulatory and Legislative Update

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Quarterly Regulatory & Legislative
Policy Board Update
March 18, 2026

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Table of Contents
Contents
REGULATORY UPDATE......................................................................................................................................................... 3 Resource Adequacy (RA)................................................................................................................................................. 3 Disconnections..................................................................................................................................................................... 3 Demand Response (DR)................................................................................................................................................... 4 Bioenergy Market Adjustment Tariff (BioMAT).................................................................................................... 5 New Power Charge Indifference Adjustment (PCIA) Rulemaking................................................................. 5 Integrated Resource Planning (IRP)........................................................................................................................... 6 Renewables Portfolio Standard (RPS)....................................................................................................................... 7 Interconnections Process Enhancements (IPE)..................................................................................................... 7 PG&E Rule 30 Application for Transmission Service .......................................................................................... 8 Improvements to the Climate Credit.......................................................................................................................... 8 Integrated Energy Policy Report (IEPR)................................................................................................................... 9 3CE LEGISLATIVE REPORT – Winter 2026 ................................................................................................................11 Federal Legislative Developments: ...........................................................................................................................11 State Legislative Developments:.................................................................................................................................11

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REGULATORY UPDATE
Resource Adequacy (RA) - R.25-10-003
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. The current proceeding will address the 2027 and 2028 RA compliance year and consider further refinements to the slice-of-day (SOD) framework.

Status
3CE attended workshops held on February 10 and 11 for parties to discuss proposals on scoped issues for Track 1, including accreditation for long-duration energy storage resources and treatment of energy-only (EO) resources. CalCCA presented proposals developed in coordination with 3CE, including a method by which data center load would only be included in RA obligations upon meeting certain key milestones to help protect existing customers from absorbing costs associated with data center load. On February 20, 3CE submitted a motion for party status in the proceeding so that 3CE may engage independently in addition to participating through CalCCA’s representation. Separately, on February 23, the Energy Division issued a report assessing the benefits and feasibility of an hourly load obligation trading mechanism to inform a subsequent set of party proposals related to transactability issues in the SOD program. The results show that improved portfolio alignment could yield measurable system-wide savings, in agreement with analysis done by CalCCA, but unfortunately the report continues to echo the CPUC’s sentiment that CalCCA’s proposal would be administratively complex to implement.

Next Steps
Comments on party proposals are due March 6. In addition to assisting CalCCA develop comments, 3CE intends to submit individual comments in support of enabling EO resources to count towards charging sufficiency requirements, given the affordability benefits of widening the pool of resources capable of providing value under the SOD program. 3CE will also attend a workshop on March 9 on the Energy Division’s report and party proposals related to transactability issues, including the CalCCA proposal for an hourly load obligation trading mechanism, which 3CE strongly supports. Comments on the transactability report and related proposals will be due March 16, and a Proposed Decision on all Track 1 issues is scheduled for issuance in May. As the proceeding moves forward, 3CE will continue to advocate for modifications to improve the affordability and efficiency of the RA compliance program.

Disconnections – R. 18-07-005
Issue
The CPUC opened the Disconnections proceeding in 2018 pursuant SB 598 to address disconnection rates across California’s electric and gas investor-owned utilities (IOUs) by adopting policies and rules that reduce disconnections and improve reconnection processes and outcomes for disconnected customers. Phase 1 of the proceeding adopted rules to reduce residential customer disconnections and implemented a program that helps eligible low-income customers pay down utility bill debt called the Arrearage Management Plan (AMP). Phase 2, which began in July 2022, seeks to consider additional solutions for reducing disconnection rates, implement SB 1142, which mandates utilities restore service to disconnected customers who agree to enroll in a payment plan, and considers disconnection protections for customers under extreme weather conditions.

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Status
The CPUC has issued a ruling seeking comment on whether to modify or lift existing caps on residential disconnections for non-payment by PG&E and SCE. If the disconnection caps or related protections are removed without replacement safeguards, 3CE customers, who rely on PG&E or SCE for delivery service, could face increased risk of shutoff for non-payment, particularly low-income households. Several affordability pilots are scheduled to sunset: the Community Based Organization (CBO) Pilot on April 26, 2026; the Arrearage Management Program (AMP) on October 1, 2026; and the Percentage of Income Payment Plan (PIPP) in February 2027.

Through CalCCA, 3CE has supported extending or re-evaluating targeted affordability programs that demonstrably reduce disconnection risk and improve transparency, including improvements to AMP (such as clearer on-bill tracking of arrearage forgiveness) and consideration of a sustainable path forward for PIPP. The ruling reflects concern that arrearages remain historically high statewide, and the Commission is weighing customer protections against broader rate impacts.

Next Steps
The CPUC held a workshop on March 11, 2026, and parties are now preparing opening comments due March 25, with reply comments due April 1. Through CalCCA, 3CE will submit comments advocating for balanced reforms that maintain strong protections for vulnerable customers while ensuring programs are cost-effective and administratively workable. 3CE is closely tracking proposals related to potential changes to the disconnection caps, upcoming program sunsets, and possible “circuit breaker” safeguards to prevent rapid increases in shutoffs. The Commission is expected to release a Proposed Decision on phase 2 issues by the end of this year, which will conclude the proceeding.

Demand Response (DR) – R.25-09-004
Issue
Demand response (DR) refers to programs and rate structures that encourage customers to adjust or reduce their electricity usage in response to price signals, grid conditions, or market incentives. By shifting consumption away from peak periods or reducing load during times of grid stress, DR helps maintain system reliability, reduce the need for costly peaking resources, and integrate higher levels of renewable generation. Well-designed DR programs also empower customers to take a more active role in managing their energy use while contributing to California’s clean energy transition and greenhouse gas reduction goals. The CPUC opened a Rulemaking to enhance demand response in California, along with a staff report proposing to update demand response guiding principles based on predictability, reliability, consistency, cost-effectiveness, and to support the State's energy and environmental goals.

Status
Following the release of the Order Instituting Rulemaking (OIR), 3CE worked with CalCCA to submit opening comments supporting the Commission’s overall goals in opening the rulemaking and proposed additional principles and policies for the proceeding to consider. The comments also highlighted the need to update the existing DR framework to enable system and processes that ensure equal access and participation for CCAs and their customers. On February 12, The Commission issued a Scoping Ruling, which outlines a workshop process following the release of an Energy Division Staff Proposal on Data Systems and Processes, expected to be issued this spring. Additionally, the Commission requested parties address the authorization of bridge funding for certain existing demand response programs and pilots, and the extension of the Flex Alerts marketing campaign budget.

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Next Steps
Beyond the System and Process elements, CCAs want to ensure that guiding principles and policies established in this proceeding incorporate customer choice and competitive neutrality and develop strategies to reduce barriers to DR adoption. Because of the broad nature of the schedule presented in the Scoping Memo, 3CE is working with CalCCA to request the Commission provide a more detailed roadmap for stakeholders on when it plans to address these important issues.

Bioenergy Market Adjustment Tariff (BioMAT) – R.22-10-010; A.25-08-015 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 with a proceeding to work through the details of CCA participation. On August 14, 2024, 3CE’s Operations Board approved 3CE’s participation in the BioMAT program and authorized 3CE’s CEO to execute PPAs with BioMAT-eligible projects.

Status
On January 20, 3CE submitted supplemental testimony in support of its application for BioMAT compliance review. Because no parties submitted intervenor testimony in response, and 3CE’s application remains uncontested, 3CE filed a motion on February 19 requesting admission of its testimony into the record along with expedited issuance of a decision on 3CE’s application. Separately, 3CE submitted a 2027 forecast of revenue requirements associated with its current BioMAT PPA to seek approval from the Commission for cost recovery. If approved, PG&E will include 3CE’s BioMAT costs in the October Update to its Energy Resource Recovery Account (ERRA) forecast.

Next Steps
3CE will monitor for a Commission decision on its motion and request for cost recovery, and continues to prudently manage its BioMAT contract. Because the BioMAT program officially closed on December 31, 2025, 3CE can no longer accept new applicants.

New Power Charge Indifference Adjustment (PCIA) Rulemaking – R.25-02-005 Issue
On February 20, 2025 the CPUC opened a new proceeding to update policies and procedures related to the IOUs’ Energy Resource Recovery Accounts (ERRA) and the Power Charge Indifference Adjustment (PCIA). The PCIA is a fee that all customers, bundled or unbundled, pay to ensure the IOUs remain indifferent to the loss of customers for legacy procurement done prior to customers having the choice to choose their energy provider. The rulemaking will address near- and long-term changes impacting the PCIA, a ratemaking element designed to ensure customer indifference to retail load departure. The CPUC calculates the PCIA using market price benchmarks (MPBs) to establish the market value of the IOUs’ PCIA-eligible portfolio. However, in recent ERRA proceedings, the IOUs have proposed new policies related to the calculation of MPBs, citing concerns with the accuracy and volatility of the current methodology.

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Status
A Scoping Memo was issued on February 3, 2026, detailing the scope and schedule for Track 2 concerning pre-2019 banked Renewable Energy Credits (RECs). RECs are utilized for compliance with California’s Renewable Portfolio Standard (RPS) requirements and are most accurately valued at the RPS Market Price Benchmark (MPB). Although now-departed customers originally paid for these energy attributes, the Investor Owned Utilities (IOUs) do not propose to credit departed customers for the value of the pre-2019 RECs, even though the IOUs now use those RECs for RPS compliance, providing financial benefit to currently bundled customers. This misalignment in who funded the attributes and who now benefits from them represents a cost shift between bundled and unbundled customers, precisely the type of imbalance the PCIA was designed to address.

Next Steps
The schedule begins with Opening Testimony due March 2, 2026, and Reply Testimony due March 23, 2026. A Staff Proposal for how to address the pre-2019 banked REC issue may follow before March 27, 2026. CalCCA has scheduled Ex Parte and Energy Division meetings to discuss CalCCA’s Track 2 positions, beginning in early March 2026. Track 2 is scheduled to conclude with a Decision in September 2026.

Integrated Resource Planning (IRP) – R.20-05-003; R.25-06-019 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
The CPUC opened a proceeding, R.25-06-019, as a new primary venue for oversight of the IRP process, including the next individual LSE IRP filings. On January 14, the CPUC issued a proposed decision (PD) that recommended the procurement of 2,000 MW by 2030 and 4,000 MW by 2032, with the requirement that only 50% of the capacity can be provided by storage resources. 3CE submitted comments on February 3 asserting that the storage cap discourages the procurement of long-duration energy storage (LDES), counter to prior Commission directives, and penalizes early actors to the detriment of ratepayers. 3CE also recommended the PD be modified to allow LSEs who meet their RA obligations to be found compliant in the case of delays, as was adopted for the MTR procurement orders, and to incorporate consideration of good faith efforts into compliance assessment. On February 26, the ALJ approved a revised Proposed Decision that incorporated 3CE’s recommendations by removing the storage cap, stating the CPUC does not wish to discourage LDES procurement, and adding the alternative compliance pathway and good faith efforts assessment. The revised PD requires 2,000 MW annually in 2030, 2031, and 2032, rather than the originally proposed 2 tranches, and imposes a new requirement that 25% of the total procurement come from LDES or firm clean resources. 3CE’s annual procurement share is 57 MW, for a total of 171 MW by 2032, 43 MW of which are required to be from LDES or clean firm resources.

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Separately, the CPUC also issued a long-awaited Ruling that sets a new deadline of June 1, 2026, for individual Integrated Resource Plan submissions and establishes the required load forecasts and associated GHG emissions benchmarks for individual LSEs.t. On February 20, the CPUC provided the final inputs and assumptions that 3CE must use as a starting point for its plan development, although these documents continue to be refined. Because of the delayed release and ongoing modifications of materials for IRP development, CalCCA and several other parties filed a joint request for a delay to the June 1 deadline to provide LSEs at least 6 months after the finalized inputs and assumptions to submit their plans.

Next Steps
3CE continues to await Commission response to the requested delay in the IRP deadline, but in the meantime has initiated development of at least one conforming portfolio that achieves GHG emissions equal to or less than 3CE’s proportional share of the 25 million metric tons (MMT) by 2035 and 8 MMT by 2045 GHG target. 3CE’s next mid-term reliability procurement compliance filing deadline is June 1, concurrent with the current IRP filing deadline.

Renewables Portfolio Standard (RPS) – 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 January 15, the Commission extended the deadline of the RPS proceeding by two years to January 25, 2028. This will allow the current proceeding to include the review and approval of 2026 and 2027 RPS Procurement Plans, along with any other matters that arise related to the RPS program. Separately, on January 26, 3CE submitted its final 2025 RPS Procurement Plan. In response to a Commission Decision issued at the end of 2025, 3CE’s final plan contains additional information on its transportation electrification forecast and how it compares to the state’s forecast.

Next Steps
Having completed its 2025 RPS Procurement Plan, 3CE now awaits a Ruling that identifies issues and sets the schedule of review for 2026 RPS Procurement Plans.

Interconnections Process Enhancements (IPE) – IPE 5.0
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 Interconnection Process Enhancements (IPE) 5.0 initiative, focused on modifications to recent interconnection reforms aiming to prioritize and accelerate the onboarding of viable projects capable of

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meeting near-term reliability needs and state policy objectives.

Status
On February 25, the CAISO announced limited revisions to its final proposal for the current IPE initiative, which includes a pathway to allow Energy-Only (EO) projects to seek deliverability. Without deliverability, resources cannot provide Resource Adequacy (RA) capacity under current program rules.

While the prior iteration of the proposal limited this pathway to EO projects in commercial operation with a signed PPA requiring the project to receive full capacity deliverability status, the new revisions provide the opportunity for all operational EO projects to seek deliverability even without a PPA. This revision expands opportunities for operational Energy Only projects to receive deliverability, although it stops short of allowing EO projects to fund upgrades if they are found behind a constraint that would prevent them from receiving deliverability.

Next Steps
3CE will attend a workshop on March 2 on the revised final proposal and will collaborate with CalCCA on comments, due March 17, that continue to recommend that the CAISO explore future pathways for EO projects behind constraints to seek deliverability, particularly when projects have made commitments with LSEs.

PG&E Rule 30 Application for Transmission Service – A.24-11-007 Issue
On November 21, 2024, PG&E submitted an Application to the CPUC requesting approval of a new rule for non-residential customers requesting interconnection at transmission-level voltages, citing a recent increase in customers such as data centers requesting transmission-level interconnections. Current PG&E rules are focused on distribution-level interconnections. Under the proposed rule, the transmission-level customer would pay interconnection costs in advance until their forecasted load materializes, at which point the costs would be collected through rates. Due to the industry-wide implications, CalCCA has taken up this case that 3CE had initially spearheaded.

Status
After an unexpected suspension of the Rule 30 procedural schedule, the Commission issued a Ruling that determines additional record development is necessary before a decision can be made on PG&E’s application. The Ruling requests party feedback on several questions related to cost causation, financing, apportionment of facility costs, and refund processes. On February 17, the Commission set a new schedule for the proceeding that sets the date for opening briefs on all Rule 30 issues to be due May 8.

Next Steps
Parties will submit additional testimony in response to the Commission’s cost causation questions on March 13. 3CE will continue to engage in the proceeding through CalCCA and will monitor for any new rulemakings related to large loads.

Improvements to the Climate Credit – R.25-07-013
Issue
The California Cap-and-Trade program, which was renamed Cap-and-Invest under AB-1207, requires power plants, fuel providers, and large industrial facilities that emit greenhouse gases (GHGs) to retire allowances to cover their emissions. The sale of these allowances is used to benefit ratepayers by funding the California Climate Credit. A twice-per-year lump-sum bill credit delivered in April and

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October, automatically provided to all bundled and unbundled residential electric customers. On July 28, 2025, the CPUC initiated a rulemaking to consider ways to improve the effectiveness of the Climate Credit in support of customer affordability. The preliminary scope of the rulemaking includes potential modifications to customer eligibility criteria, distribution timing, and customer outreach related to the Climate Credit.

Status
On February 3, the Commission issued a Scoping Memo and Ruling setting the schedule and issues for Phase 1 of the proceeding which will consider issues only related to the residential Climate Credit. Phase 2 will be scoped at a later date and will address issues related to the Utilities’ allowance revenues as well as implementation of changes in the California Air Resources Board (CARB) regulations. Phase 1 considers a pause to the distribution of the 2026 residential credit so the Commission can determine if the credits issuance would be more impactful for customers if received at different times of the year; like in the summer or when customers are seeing their highest bills. .

Next Steps
The decision to issue a pause to the distribution of the 2026 residential credit will be heard at the CPUC’s March 19 Business Meeting. 3CE is working with CalCCA to voice concerns that a pause could diminish the credit’s affordability impacts through increased implementation costs and customer confusion. The next phase of this proceeding, Phase 1A Part Two, will address additional changes to the Climate Credit, including customer outreach issues and whether those changes should apply to 2027.

Integrated Energy Policy Report (IEPR) –25-IEPR-03
Issue
The Integrated Energy Policy Report (IEPR) is the California Energy Commission’s (CEC) biannual report, with an update every other year, to forecast energy demand and make other considerations on the State’s energy policies and goals. The IEPR forecast is a key input in the electric system planning and is used by the CPUC to inform procurement obligations for LSEs. The report is developed through a collaborative process where the CEC hosts a series of workshops and solicits stakeholder feedback.

Status
On January 21, the CEC voted to adopt the 2025 demand forecast, including a planning forecast that informs resource adequacy (RA) requirements for load-serving entities and a local reliability forecast used to evaluate the need for transmission and system upgrades. In response to CalCCA’s advocacy, done in collaboration with 3CE, the CEC decided not to include the novel “Known Loads” category in any forecast used to set RA requirements, agreeing with concerns related to the uncertainty of this new category and the need for refinements to accurately estimate loads associated with energization requests at the distribution level. On February 6, 3CE attended a workshop held by the CEC to present draft LSE tables, which present a disaggregation of the forecast on an LSE-specific basis. This year, the CEC included a disaggregation of data center load, which shows that 3CE is currently allocated a portion of data center load growth in SCE’s service area, but not in PG&E’s area.

Next Steps
The CEC has initiated the process to open a new docket for the development of the 2026 IEPR. 3CE is collaborating with other CCAs to determine how to develop advocacy and engagement strategies in the IEPR process, ensuring that CCAs are included in information-sharing and forecasting efforts given their localized knowledge and role as default generation providers.

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3CE LEGISLATIVE REPORT – Winter 2026
Federal Legislative Developments:
3CE Joins LEAN Energy US; DC Hill Day Trip Planned for April In February, 3CE became a member of LEAN Energy US, the nationwide trade association for Community Choice Aggregators (CCAs). Founded in 2011 LEAN provides support, information resources and market expertise on CCAs with the goal of influencing Federal policy. 3CE will become a member of their Government Affairs Committee, which manages a contract lobbyist, and participate in weekly coordinating meetings. 3CE Government Affairs staff will also be attending LEAN Federal Advocacy Days Trip in Washington, D.C. the week of April 20th.

Environmental Protection Agency repeals the “Endangerment finding” On February 12, 2026, the Administration issued a final rule rescinding the Endangerment Finding, a 17- year-old determination that provides the legal justification for the federal government to regulate greenhouse gas (GHG) emissions under the Clean Air Act (CAA). Although the immediate impact of this decision on 3CE is minimal, it effectively terminates Federal rules that limit GHG emissions and could have longer-term consequences for the energy and transportation sectors more broadly.

Federal Policy Uncertainty Clouds Clean Energy Financing and Permitting Clean energy projects are facing significant headwinds from Washington on multiple fronts. The Treasury Department released long-awaited draft guidance on "Foreign Entity of Concern" (FEOC) rules governing federal tax credit eligibility, but left the industry's most pressing question unanswered — what constitutes foreign "influence" or control over a company. While the guidance does clarify how to calculate the share of project costs that must come from non-China suppliers, some major banks remain hesitant to finance clean energy projects until the control question is resolved. Additionally, a promising bipartisan permitting reform effort has stalled: the House passed the SPEED Act in late December, which would have set deadlines for environmental review and limited litigation, but a last-minute amendment preserving the Trump administration's ability to selectively block clean energy permits undermined the bill's technology-neutral foundation and ended Democratic support, collapsing Senate negotiations.

State Legislative Developments:
3CE joined its CCA partners at CalCCA’s Lobby Day in the first week of February. 3CE’s Policy Board Chair, Mayor Fred Keeley, led a delegation of five 3CE staff members in 17 meetings with state elected officials, their staff, and leadership from key policy committees.

Following Lobby Day and continued engagement, authors have been secured for two key bill proposals:
 Assembly Bill 1761, authored by Assemblymember Chris Rogers, would require public disclosure of any data provided by an investor-owned utility (IOU) or the California Public Utilities Commission (CPUC) that is used in the formulation of the Power Charge Indifference Adjustment (PCIA) or other cost recovery mechanisms. This is essential for 3CE to assess the fairness of regulatory charges imposed on our customers and to highlight contracts that are so expensive that they warrant non-renewal.
 Senate Bill 1138, authored by State Senator Padilla, would allow CCAs and other load-serving entities to trade RA on an hourly basis, consistent with the requirement to demonstrate sufficient capacity for every hour of the day. This added flexibility would reduce costs, as 3CE

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has experienced years in which RA expenses have constituted one-third of total procurement costs. A bill number has not yet been assigned.

Staff is currently working to secure support for this legislation from local elected officials and Member Agencies, as well as conducting stakeholder outreach to business, environmental, and labor organizations.

Additionally, 3CE Staff was on hand for the swearing in of Senate President Pro Tempore Monique Limón. Limón's swearing in marks the first time that legislative leaders of both houses, Senate Pro Tem Limón and Assembly Speaker Robert Rivas, represent Central Coast districts.

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Staff Report Item 8
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Gina Urmatan, Senior Accountant
SUBJECT: Financial Report for the period of October 1, 2025, through December 31, 2025 DATE: March 18, 2026
RECOMMENDATION:

Receive a financial report for the period October 1, 2025, through December 31, 2025.

SUMMARY:

During the three months of the current fiscal year ending on December 31, 2025, operating revenues amounted to $157.3 million, and operating expenses totaled $125.4 million for a net operating income of $31.9 million. Net non-operating revenue of $2.6 million, driven by interest and investment returns, resulted in a total increase in net position of $34.5 million.

Year-to-date operating revenue is $12.1 million over budget, primarily due to positive revenue performance in multiple customer classes. Non-operating revenue from investment returns from assets held in operating and investment accounts, and interest on collateral exceeded the budget with a variance of $0.3 million due to higher-than-anticipated investment yields. Year-to-date total revenue (operating & non-operating revenue) is $12.3 million higher than the budget, a positive variance of 8%.

Year-to-date operating expenditures excluding capital outlay are $34.5 million below budget, a variance of 22%. This variance is primarily attributable to lower-than-anticipated energy costs, which came in $32.4 million under budget. The variances reflect a convergence of factors, including lower market prices, the timing of invoicing of attributes such as Renewable Energy Credits (RECs), and higher-than-planned revenue from congestion revenue rights. These variances are expected to level out over the fiscal year as 3CE fulfills its energy obligations, including resource adequacy (RA) and renewable energy credits (RECs).

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Non-energy operating costs were $2.2 million below budget due to lower-than-planned costs for contracted services, staff vacancies, and energy programs. The capital outlay exceeded the budget by $0.1 million due to ongoing work on the electric vehicle charging at the 3CE Santa Maria office. Non-energy operating costs are projected to level out over the fiscal year as participation in energy programs and capital projects continues to progress. Year-to-date total expenditures, including capital outlay, are $34.5 million lower than the budget, a favorable variance of 22%.

The net position at the end of December 31, 2025, totaled $297.2 million, an increase of $34.5 million from last fiscal year. The increase is primarily due to a reduction in the accrued cost of electricity and accounts payable, offset by a decrease in accounts receivable, other accrued revenue, and other receivables. Cash, cash equivalents, and investments totaled $240.6 million, a $17.7 million increase from the start of the fiscal year. The positive variance in liquidity was primarily attributed to the increase in cash from operating revenue.

FISCAL IMPACT:

There is no financial impact associated with receiving this report.

ATTACHMENT(S):

1. December 31, 2025 Financial Report

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Compiled Financial Statements 1
Compiled Budgetary Comparison Schedule 6
Budget Variance Commentary 8
Investment Summary 9
Accounts Receivable Aging Summary 10
Table of Contents

FINANCIAL REPORT
Fiscal Year to Date
As of December 31, 2025

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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 December 31, 2025, and the related statement of revenues, expenses, and changes in net position, and the statement of cash flows for the three months then ended in accordance with accounting principles generally accepted in the United States of America. We have performed a compilation engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. We did not audit or review the accompanying statements nor were we required to perform any procedures to verify the accuracy or completeness of the information provided by management. Accordingly, we do not express an opinion, conclusion, nor provide any assurance on these financial statements.

Management has elected to omit substantially all of the note disclosures required by accounting principles generally accepted in the United States of America in these interim financial statements.

Central Coast Community Energy’s annual audited financial statements include the note disclosures omitted from these interim statements. If the omitted disclosures were included in these financial statements, they might influence the user’s conclusions about the Authority’s financial position, results of operations, and cash flows. Accordingly, these financial statements are not designed for those who are not informed about such matters.

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

Maher Accountancy
San Rafael, CA
January 30, 2026
1101 Fifth Avenue, Suite 200 San Rafael, CA 94901 415 459 1249 mahercpa.com

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ASSETS
Current assets
Cash and cash equivalents - unrestricted 145,051,081$
Cash - restricted 2,963,358
Accounts receivable, net of allowance 46,290,964
Accrued revenue 34,604,668
Other receivables 1,349,011
Investments 85,498,426
Prepaid expenses 459,958
Deposits 32,483,449
Loan receivable 196,118
Total current assets 348,897,033
Noncurrent assets
Investments 10,016,650
Deposits 36,204
Loan receivable 1,037,262
Capital assets, net of depreciation and amortization 6,723,805 Total noncurrent assets 17,813,921
Total assets 366,710,954

LIABILITIES
Current liabilities
Accrued cost of electricity 47,928,866
Accounts payable 689,028
Other accrued liabilities 3,722,439
User taxes and energy surcharges due to other governments 2,100,232 Security deposits - energy suppliers 2,376,000
Lease liability 358,352
Total current liabilities 57,174,917
Noncurrent liabilities
Security deposits - energy suppliers 11,951,550
Lease liability 399,021
Total noncurrent liabilities 12,350,571
Total liabilities 69,525,488

NET POSITION
Net investment in capital assets 5,901,446
Restricted for security collateral 2,963,358
Unrestricted 288,320,662
Total net position 297,185,466$
As of December 31, 2025

STATEMENT OF NET POSITION

CENTRAL COAST COMMUNITY ENERGY

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OPERATING REVENUES
Electricity sales, net 157,274,625$
Other income 22,044
Total operating revenues 157,296,669

OPERATING EXPENSES
Cost of electricity 114,908,908
Contract services 3,162,638
Staff compensation 3,236,673
Program incentives 3,039,342
Other operating expenses 846,653
Depreciation and amortization 161,742
Total operating expenses 125,355,956
Operating income (loss) 31,940,713

NONOPERATING REVENUES (EXPENSES)
Investment income 2,560,501
Interest expense (9,153)
Nonoperating revenues (expenses) 2,551,348
CHANGE IN NET POSITION 34,492,061
Net position at beginning of period 262,693,405
Net position at end of period 297,185,466$
Three Months Ended December 31, 2025

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 182,011,965$
Receipts from wholesale sales and other operating revenue 6,171,905 Receipts of deposits and collateral 13,073,952
Payments to suppliers for electricity (151,252,270)
Payments for other goods and services (4,223,399)
Payments of deposits and collateral (17,363,542)
Payments for program incentives (3,735,638)
Payments for staff compensation (3,289,395)
Payments of taxes and energy surcharges to other governments (2,950,749) Net cash provided by operating activities 18,442,829

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Payments of lease (93,472)
Purchases of capital assets (407,949)
Net cash provided (used) by capital and related financing activities (501,421)

CASH FLOWS FROM INVESTING ACTIVITIES
Investment income received 1,714,801
Proceeds from sales and maturities of investments 35,650,000 Loan principal received 96,699
Investment purchases (24,543,108)
Net cash provided (used) by investing activities 12,918,392 Net change in cash and cash equivalents 30,859,800
Cash and cash equivalents at beginning of year 117,154,639 Cash and cash equivalents at end of period 148,014,439$ Reconciliation to the Statement of Net Position
Cash and cash equivalents - unrestricted 145,051,081$
Cash - restricted 2,963,358
Cash and cash equivalents 148,014,439$
Change in fair value of investments 932,301$
Change in interest income receivable (86,601)$

NONCASH CAPITAL FINANCING ACTIVITIES
Capital acquisitions included in accounts payable
and other liabilities 64,986$
Three Months Ended December 31, 2025

STATEMENT OF CASH FLOWS

CENTRAL COAST COMMUNITY ENERGY

NONCASH INVESTING ACTIVITIES

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Operating income (loss) 31,940,713$
Adjustments to reconcile operating income (loss) to net cash provided by operating activities
Depreciation and amortization expense 161,742
(Increase) decrease in:

Accounts receivable, net of allowance 16,171,628
Accrued revenue 5,739,642
Other receivables 2,682,041
Prepaid expenses (5,678)
Deposits (7,127,816)
Increase (decrease) in:

Accrued cost of electricity (32,809,098)
Accounts payable (2,656,841)
Other accrued liabilities 1,632,949
User taxes and energy surcharges due to other governments (124,679) Security deposits - energy suppliers 2,838,226
Net cash provided by operating activities 18,442,829$

CENTRAL COAST COMMUNITY ENERGY
STATEMENT OF CASH FLOWS (continued)
Three Months Ended December 31, 2025

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 budgetary comparison schedule of Central Coast Community Energy (a California Joint Powers Authority) for the three months ended December 31, 2025, 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
January 30, 2026
1101 Fifth Avenue, Suite 200 San Rafael, CA 94901 415 459 1249 mahercpa.com

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Actual Budget Amount % Actual Budget Amount % Budget
Annual Budget
Less Actual
YTD

REVENUES AND OTHER SOURCES
Electricity sales, net $ 51,833,630 $ 49,961,350 $ 1,872,280 4% $ 157,274,625 $ 145,216,598 $ 12,058,027 8% $ 578,022,716 $ 420,748,091 Interest and investment returns 929,621 758,333 171,288 23% 2,560,501 2,274,999 285,502 13% 9,100,000 6,539,499 Other income 7,962 6,250 1,712 27% 22,044 18,750 3,294 18% 75,000 52,956 Total revenues and other sources 52,771,213 50,725,933 2,045,280 4% 159,857,170 147,510,347 12,346,823 8% 587,197,716 427,340,546 EXPENDITURES AND OTHER USESCurrent Expenditures
Cost of energy 26,688,022 46,533,841 19,845,819 43% 115,127,133 147,556,762 32,429,629 22% 534,776,256 419,649,123 Salaries and benefits 1,117,918 1,207,161 89,243 7% 3,236,673 3,530,529 293,856 8% 14,260,774 11,024,101 Services and supplies 2,362,726 3,037,987 675,261 22% 6,923,879 8,797,275 1,873,396 21% 38,160,686 31,236,807 Capital outlay 64,985 100,000 35,015 35% 429,670 300,000 (129,670) -43% 1,200,000 770,330 Total current expenditures 30,233,651 50,878,989 20,645,338 41% 125,717,355 160,184,566 34,467,211 22% 588,397,716 462,680,361 Surplus (deficit) 22,537,562$ (153,056)$ 22,690,618$ 34,139,815$ (12,674,219)$ 46,814,034$ (1,200,000)$ (35,339,815)$ Favorable variances represent revenues exceeding budget or expenditures below budget.

Annual

CENTRAL COAST COMMUNITY ENERGY

BUDGETARY COMPARISON SCHEDULE
Current Month and Three Months Ended December 31, 2025
Current Month
Variance
Favorable
(unfavorable)
Year-To-Date
Variance
Favorable
(unfavorable)

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CCA Program surplus/(deficit)
per budgetary comparison schedule: 34,139,815$
Adjustments needed to reconcile to the changes in net position in the Statement of Revenues, Expenses and Changes in Net Position:

Add back GASB 87 lease amortization not in operating budget 84,318 Subtract depreciation expense (161,742)
Add back capital asset acquisitions 429,670
Change in Net Position 34,492,061$

REVENUES, EXPENSES AND CHANGES IN NET POSITION

CENTRAL COAST COMMUNITY ENERGY

BUDGET RECONCILIATION TO STATEMENT OF
Three Months Ended December 31, 2025

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Budget Item
YTD Variance -
Favorable
(Unfavorable) Comment
Electric Sales Revenue, net 8.3% 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 22.0% 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.

Salaries and Benefits 8.3% Staffing expenses are under budget due to the timing of new hires.

Services and Supplies 21.3% This category includes accounting, IT, technical and other consultants.

Budget Commentary for significant items

CENTRAL COAST COMMUNITY ENERGY
October 1, 2025 through December 31, 2025

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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 / West Coast Community Bank - Money Market and other Interest Earning AccountsFunds Invested - Average Balance 96,624,568$ 99,293,298$ 108,525,583$ Gains/Losses/Interest 1,007,073$ 331,876$ 320,565$ 354,632$ Average APY 4.12% 3.87% 3.92%INVESTMENTSSchwab/FidelityFunds Invested - Average Balance 131,114,341$ 131,499,666$ 131,948,441$ Gains/Losses/Interest 1,270,619$ 574,669.46 289,175.13 406,774.61 Average APY 5.26% 2.64% 3.70%

CENTRAL COAST COMMUNITY ENERGY
Investment Summary
October 1, 2025 through September 30, 2026

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Current 0 - 30 Days 31 - 60 Days 61 - 90 Days > 91 Days A/R Balance 22,366,603$ 13,708,812$ 2,998,893$ 1,300,469$ 5,916,187$ 46,290,964$

CENTRAL COAST COMMUNITY ENERGY
Summary of Accounts Receivable, Net of Bad Debt Allowance As of December 31, 2025

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Staff Report Item 9
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Thomas White, Accountant
SUBJECT: Investment Performance Report for the period of October 1, 2025, through December 31, 2025
DATE: March 18, 2026
RECOMMENDATION:
3CE investment performance report for the period of October 1, 2025, through December 30, 2025.

BACKGROUND:

As of December 31, 2025, Central Coast Community Energy held $243.5 million across its operating and investment accounts. The agency’s investment strategy remains conservative and compliant with the Investment Policy and the California Government Code, prioritizing liquidity, preservation of capital, and a passive investment approach. The portfolio's structure is designed to support day-to-day operating needs, meet collateral calls, and maintain reserves for strategic and rate stabilization purposes.

In the fourth quarter of FY 2024-25, 3CE established a new account with West Coast Community Bank to further diversify its financial holdings for the specific purpose of holding capital funds. The selection of a local banking partner within 3CE’s service area supports community investment while providing a secure vehicle to hold funds designated for capital outlay from the Capital Infrastructure Reserve.

DISCUSSION/ANALYSIS:
3CE ended the quarter on December 31, 2025, with investment holdings that aligned with the Investment Policy and a strategy of maintaining sufficient cash to meet operating costs, including counterparty collateral calls. The strategy consists of holding three different classes of funds: cash to meet ongoing operating costs, liquidity reserves to meet collateral calls, capital acquisition, and unforeseen costs, and short-term investments to meet reserves, including the strategic reserve and

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energy rate stabilization funds. As of December 31, 2025, 3CE held $243.5 million in operating and investment accounts. The table below lists the cash and investment balances by account type.

Cash and Investment Mix Holdings by Institution
Account Type Institution Balance Investment Mix
Operating
River City Bank $82,715,642
cash (sweep) - $74.8M
money market - $3.9M
cash (operating) - $4.0M
LOC money market - $3.0M
Chase $14,359,240 cash (held for collateral)
West Coast Community Bank $14,674,560 money market
Investment
Schwab $65,229,011
Treasuries - $61.2M
cash (sweep) - $0.0M
money market - $4.0M
Fidelity $66,551,063 Treasuries - $56.4M
money market - $10.2M
Total $243,529,516
3CE employs a conservative, passive investment strategy in which fixed-income securities—primarily U.S. Treasury notes and bills—are held to maturity, allowing the agency to realize coupon income and discounts over time. As of December 31, 2025, 3CE managed $131.8 million in investments across its Schwab and Fidelity brokerage accounts. During the first quarter, Treasury yields averaged between

3.50% and 4.38%. Treasuries with maturities under one year represented approximately 91% of total holdings, while two longer-term Treasuries, each valued at $5.0 million, mature in the second and third quarters of 2027. All investments are rated high-grade or better, consistent with 3CE’s prudent investment policy.
3CE’s investment mix aligns with the Investment Policy and California Government Code. As of December 31, 2025, 3CE held $90.2 million in cash and cash equivalents, $117.5 million in U.S.

Treasuries, and $37.8 million in money market funds. Aside from money market funds, all other investment types do not have state investment limits. The State code limits money market funds to 20% of the portfolio. 3CE is within the State limit at 14.7%.

Cash and Investment Mix Holdings
Type Market Value
% of
Portfolio
Permitted by
CA Government Code
Cash and cash equivalents $90,193,043 37.0% 100%
Money Market Funds $35,787,340 14.7% 20%
U.S. Treasuries $117,549,133 48.3% 100%
Total $243,529,516 100.0%

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The FY 2025-26 Adopted Budget, with appropriations of $588.4 million, included estimated investment revenues of $9.1 million. In the first quarter, investment earnings from operating and investment accounts netted $2.6 million, $1.2 million from interest on cash and money market accounts, and $1.2 million from short-term investments, mostly from Treasuries. Interest earned on 3CE collateral held by counterparties totaled $0.2 million. This first-quarter investment revenue is higher than the $2.3 million estimated in the recommended budget, attributed to more favorable investment returns.

As of December 31, 2025, 3CE has 151 days of cash on hand. This is based on the total cash and equivalents of $243.5 million divided by an average daily expense of $1.6 million. Total operating expenses for FY 2025-26, less depreciation, are $588.4 million.

FISCAL IMPACT:

There is no fiscal impact to receiving this report.

CONCLUSION:
3CE continues to proactively diversify its financial institutional partnerships, including the recent addition of an operating account with West Coast Community Bank. The agency strategically deploys cash and short-term investments to capture favorable yields while maintaining sufficient liquidity to meet operating expenses and collateral requirements.

ATTACHMENT(S):

None.

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Staff Report Item 10
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
SUBJECT: CEO Report
DATE: March 18, 2026

COMMUNITY ADVISORY COUNCIL REPORT
3CE's Community Advisory Council (CAC) held its regular meeting on Wednesday, February 4th. During the meeting, 3CE staff presented findings from fiscal year (FY) 2024-25’s advertising and communications campaign as well as plans for FY 2025-26. Key highlights for FY 2024-25 included launching three advertising campaigns to support enrollment in unincorporated San Luis Obispo County and Atascadero and promoting Energy Programs participation. These efforts successfully met enrollment goals and increased program participation, with 3CE’s digital advertising performance exceeding industry benchmarks for engagement and click-through rates. For FY 2025-26, 3CE will continue combining paid and unpaid marketing strategies to raise awareness of the agency and its services.

The CAC also received a presentation on findings from nine community focus groups held in November and December concerning barriers and opportunities for electrification in the agricultural industry. The presentation included a preliminary improved program concept for 3CE’s Agricultural Electrification Program, with elements such as additional rebates, technical assistance, and equipment demonstration days. The improved program concept will continue to be developed with feedback from a second round of focus groups to be held in March and April across 3CE's service area.

Finally, the CAC received an evaluation report on 3CE's Energy Programs for FY 2024-25, along with an update on Energy Programs for first quarter of FY 2025-26. FY 2024-25 showed strong progress: equity projects rose to 42% of incentives (from 36%), CO2e avoidance increased 63% to 6,042 MT, and 3CE’s battery rebate program shifted 2.3 MWh of daily load. FY 2025-26 initiatives include relaunching Electrify Your Home with improved design, reviewing 3CE’s Agricultural Electrification program, piloting a Virtual Power Plant, and creating a comprehensive electrification technical assistance offering. Based on the report's findings and recommendations, staff will develop a long-term strategic plan for Energy Programs with stakeholder input. The final report will be presented at the June Operations Board meeting.

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3CE ADVOCACY SUPPORTS LONG DURATION STORAGE AND FLEXIBILITY The California Public Utilities Commission’s Revised Procurement Order, approved at its Feb. 26, 2026 meeting, reflects several key recommendations advanced through 3CE Regulatory staff’s independent comments and direct engagement with Commission staff. Most notably, the Commission removed the proposed 50% cap on storage procurement, acknowledging concerns that such a cap could discourage development of longer-duration energy storage (LDES) resources. Instead, the decision adopts a more flexible framework requiring that at least one-quarter of procurement by 2032 come from clean firm resources and/or long-duration energy storage. Removing the cap allows 3CE to count the full value of eligible LDES resources already in its portfolio, avoiding the need to sign additional PPAs solely to meet this Procurement Order. The decision also clarifies that “good faith efforts” will be considered in compliance evaluations, allowing load serving entities (LSEs) to demonstrate when solicitations produce high or non-competitive pricing, and reinstates former alternative compliance provisions. Together, these changes provide important flexibility for LSE compliance while helping protect customer affordability and reflect the proposals advanced by 3CE.

STATE LEGISLATIVE UPDATE
3CE joined fellow Community Choice Aggregators (CCAs) at CalCCA’s Lobby Day, held February 4, 2026.

The event followed productive internal discussions, which had resulted, by the end of December 2025, in a finalized, coordinated CCA legislative strategy. The alignment and advanced preparation contributed to a successful and effective day of advocacy in Sacramento in February. 3CE’s Policy Board Chair, Mayor Fred Keeley, led a delegation of five 3CE staff members in 17 meetings with state elected officials, their staff, and leadership from key policy committees.

Following Lobby Day and continued engagement, authors have been secured for two key bill proposals:

1. Assembly Bill 1761, authored by Assemblymember Chris Rogers, would require public disclosure of any data provided by an investor-owned utility (IOU) or the California Public Utilities Commission (CPUC) that is used in the formulation of the Power Charge Indifference Adjustment (PCIA) or other cost recovery mechanisms. This is essential for 3CE to assess the management of IOU legacy resources and the fairness of regulatory charges imposed on utility ratepayers.

2. Senate Bill 1138 - Resource Adequacy (RA) Transactability bill, authored by Senator Alex Padilla, would allow CCAs and other load-serving entities to trade RA on an hourly basis, consistent with the requirement to demonstrate sufficient capacity for every hour of the day. This added flexibility would reduce costs. 3CE has experienced years in which RA expenses have constituted one-third of total procurement costs.

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Staff Report Item 11
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Christopher Cook, Director of Energy Programs SUBJECT: Receive update on over-subscription of the Residential Battery Rebate Program participation and provide direction regarding staff recommendation to modify and monitor program
DATE: March 18, 2026
RECOMMENDATION:

This recommends that the Policy Board receive update on over-subscription of Residential Battery Rebate Program and provide direction regarding staff recommendation to modify and monitor program.

BACKGROUND:

Batteries are a critical part of 3CE’s transition to renewable energy and the residential battery storage sector is starting to develop innovative ways to make an impact demand in CAISO real time markets. 3CE’s Residential Battery Rebate Program is a foundational component to this transition by providing rebates to customers when they install battery systems and discharge their batteries to shift energy use away from peak hours. While the program acts as a precursor to 3CE’s planned Virtual Power Plant (VPP), the recent elimination of federal tax credits has significantly increased the number of applications for 3CE’s Residential Battery Rebate Program, causing the program to see unanticipated sustained growth and requires more immediate steps to address the over subscription and program spending.

On June 26, 2024, the Policy Board supported staff’s recommendation on the proposed Residential Battery Rebate Program (RBRP). The report described the program design and benefits as a program that enables all 3CE customers to actively manage their electricity usage through load shifting. This program in turn benefits all 3CE customers by reducing consumption in grid-contained and high emissions hours. Currently, customers are eligible for a $300/kWh rebate for up to 26kWh, with enhanced incentives of $500/kWh available for customers on CARE, FERA, or Medical Baseline.

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On September 18, 2025, the Policy Board adopted resolution No. PB-2025-06 approving the FY 2025-26 recommended budget. This budget allocated $14.8M for Energy Programs incentives, including $1.5M for RBRP based on FY 2024-25 actual spend. Through February 2026 (five months of FY) the Energy Programs incentive budget is on track with roughly $8M committed, but the Residential Battery Rebate Program is oversubscribed by approximately $5.3M in completed and pending applications.

In July 2025, the federal government announced that the federal tax credit for residential battery storage would expire on December 31st, 2025. Only systems installed and operational prior to this date are eligible for the 30% federal tax credit, as part of the Residential Clean Energy Credit. This elimination of the tax credit encouraged customers to rapidly install battery systems to stack 3CE’s rebates with the Residential Clean Energy Credit. As a result, 3CE experienced a higher-than-expected increase in RBRP applications, peaking in September 2025 and continuing through January 2026, as noted in the graph below. 3CE expects continued increase in applications in Q2 of this fiscal year as a result of customers receiving interconnection approvals for battery contracts signed in prior months.

The sustain increase in applications for FY 2025-26 requires staff evaluate and manage the approved $14.8M Energy Programs rebate budget to support processing approximately $2.6M of RBRP rebates as of March 1st, 2026; and, further, to adjust the Residential Battery Rebate Program to manage available funds with customer demand. These measures will not be sufficient, customer demand continues at current levels, to keep overall RBRP spending within the approved $14.8 Energy Programs rebate budget.

DISCUSSION/ANALYSIS:

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As of March 1st, 2026, 3CE’s RBRP has supported over 640 customers in installing residential batteries and load shifting during peak hours of 4pm-9pm. The recent increase in RBRP applications has resulted both in an increase in incentive spending and an increase in capacity for daily load shifting as customers commit to discharging 50% of their battery capacity daily between 4pm-9pm upon receiving their rebate. The graph below illustrates improved daily load shift as a result of increased application processing through February 2026. 3CE expects the daily load shift to continue scaling exponentially as more applications are approved.

The peak demand load shift from residential battery discharges reduces 3CE’s need to procure at high costs in those hours, reducing costs for all customers. Moreover, the increased capacity enrollment aligns with 3CE’s long-term plan to aggregate and scale residential battery storage systems participating in RBRP into a Virtual Power Plant (VPP). The VPP will provide real-time dispatch, improve grid reliability, and support 3CE’s decarbonization goals. Additionally, the VPP will include a pay-for-performance program design, rather than a one-time upfront rebate like the current RBRP. Therefore, the Energy Programs budget will be able to better balance budget with anticipated increases in customer participation and reduces costs for all customers.

While a new VPP launch planned for October 1st 2026 will address the needs of the next fiscal year, there is still a need for immediate direction for the current FY incentive budget to support the recent increase in participation for RBRP. Below are two potential options to consider and the potential results of each. Options are presented to be effective as of May 1 st 2026 to allow staff time to communicate
changes to 3CE’s residential customers and to local installers.

Recommended Option: Effective April 1
st, reduce the projected overspend of the RBRP by modifying the program’s design to reduce rebate amounts by $100 per kWh and decrease the maximum incentivized

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battery storage capacity to 15 kWh. In addition, add a requirement for customers to enroll in 3CE’s VPP, when launched. This reduces the total rebate per customer but allows the program to remain open through the end of the FY.
 Potential programs budget shortfall: Even with the modified program application, continued customer demand and the current levels would see an overrun of approximately $3M-$5M over the $14.8M Energy Programs rebate budget.

Alternative 1: Effective April 1
st, close the program and stop processing applications. Notify any customers in the application queue that their application has been denied due to deficit in funding, and that they would need to reapply October 1st when the new VPP program launches under a pay for performance model. We anticipate this would contain the Energy Programs budget to $14.8M.

To proactively address the anticipated program changes, staff are actively developing the backend requirements and communication plan in preparation to implement the recommended option, including planned notification-emails to participating installers, application processing software adjustments, and website updates.

FISCAL IMPACT:

Below are the associated financial impacts to the previously approved FY 2025-26 budget for each option.
 Recommended Option: Staff would adjust the program metrics and communicate with local installers but would anticipate a $3M-$5M cost overrun if participation continues at current levels – even with the recommended adjustments.
 Alternative 1: would have no impact to the FY 2025-26 budget. 3CE’s RBRP is planned to transition to a Virtual Power Plant by October 1st, 2026, and we would not anticipate any systemic funding constraint.

CONCLUSION:

Staff’s recommended approach allows staff to monitor the participation in the RBRP in the wake of expiring federal tax credits, it supports our local economy by continuing an important program to assist homeowners add batteries, and it supports the future engagement with 3CE’s VPP, which will help us proactively engage customers with their energy demand and reduce costs for all customers.

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Staff Report Item 12
TO: Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Dewayne Woods, Chief Financial Officer
SUBJECT: Authorization to Proceed with Second Energy Prepayment Transaction (Estimated $800 Million – $1.2 Billion)
DATE: March 18, 2026
RECOMMENDATION:

Staff recommends that the Policy Board authorize the Chief Executive Officer to proceed with the development, structuring, and execution of a second energy prepayment transaction in 2026, with an estimated par amount between $800 million and $1.2 billion.

Staff further recommends the Operations Board consider engaging necessary advisors, including PFM Financial Advisors LLC as Financial Advisor with an anticipated contract not to exceed $250,000; PFM as GIC Bidding Agent with an anticipated contract not to exceed $50,000; and Goldman Sachs & Co. LLC as Senior Managing Underwriter for the transaction.

BACKGROUND:

Central Coast Community Energy (3CE) continues to pursue financial strategies designed to lower long-term power supply costs, increase rate stability, and enhance financial flexibility. In 2023, 3CE successfully executed its first energy prepayment transaction utilizing tax-exempt bonds issued through a Joint Powers Authority (JPA) structure.

Energy prepayment transactions allow a Load Serving Entity to prepay for a long-term supply of energy using non-recourse tax-exempt bond proceeds. The structure has been used successfully by 3CE, multiple Community Choice Aggregators, and municipal utilities across the country. These prepay transactions historically generate savings of approximately 7–12% relative to contracted market pricing, depending on market conditions.

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Based on the success of the prior transaction and favorable market conditions, staff proposes initiating a second prepayment transaction in 2026 sized between $800 million and $1.2 billion, subject to market conditions, savings thresholds, and Board approval of final documentation.

DISCUSSION/ANALYSIS:

Prepayment transactions are complex financings involving multiple counterparties and a specially formed Joint Powers Authority (JPA) issuer. The general structure of the transaction is as follows:
 3CE partially assigns one or more existing or newly executed power purchase agreements to a counterparty.
 3CE enters into a Clean Energy Purchase Contract with a JPA formed to facilitate the financing.  The JPA issues non-recourse tax-exempt bonds to investors.  Bond proceeds are used to prepay the energy supplier for a long-term supply of power (typically up to 30 years).
 The supplier delivers energy under a Master Power Supply Agreement to the JPA.  The JPA delivers energy to 3CE.
 3CE makes periodic payments to the JPA at a discounted rate relative to prevailing market pricing.
 The JPA uses those revenues to repay bondholders.

The bonds are structured as non-recourse obligations of the JPA, payable solely from revenues derived from the energy supply contract. 3CE’s payment obligation is tied to energy deliveries, and the structure is designed to insulate 3CE from direct bondholder recourse.

Initial financing terms are typically structured for 4–6 years with anticipated refinancings over the life of the prepaid energy term. Investor demand for tax-exempt securities, interest rate conditions, and federal tax law considerations materially influence transaction economics.

PROPOSED FINANCING TEAM
Staff proposes the following financing team for the 2026 prepayment transaction:
• Financial Advisor: PFM Financial Advisors LLC
• Senior Managing Underwriter: Goldman Sachs & Co. LLC
• Bond, Tax, and Disclosure Counsel: To be designated subject to Board authorization • Energy Supplier/Counterparty: To be selected based on market pricing and credit considerations PFM will provide financial modeling, transaction structuring advice, pricing analysis, and support during bond marketing and closing. Goldman Sachs will underwrite and distribute the bonds to tax-exempt investors and assist with market execution strategy.

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BENEFITS AND RISKS
Potential Benefits:
• Long-term energy cost savings and improved rate competitiveness • Diversification of energy procurement and financing strategies • Budget certainty and long-term supply price stability • No direct recourse to 3CE beyond contractual energy payments Key Risks:
• Interest rate and tax law changes prior to bond issuance • Counterparty credit and performance risk
• Regulatory or legislative changes affecting tax-exempt financing • Market savings may not meet established thresholds, in which case staff would not proceed FISCAL IMPACT:

Transaction costs, including underwriting fees, advisory fees, legal fees, and issuance expenses, are expected to be paid from bond proceeds at closing. There is no anticipated impact on 3CE’s Operational Expenses outside of staff time and preliminary structuring expenses prior to closing such as advisement fees.

Final execution of the transaction will be subject to achieving minimum savings established by staff and reviewed by the Board prior to pricing.

CONCLUSION:

Staff recommends that the Policy Board authorize the CEO to proceed with development and execution of a second energy prepayment transaction in 2026 in an amount between $800 million and $1.2 billion.

Further to support staff gaining Operations Board approval engage necessary advisors, including PFM Financial Advisors LLC as Financial Advisor and Goldman Sachs & Co. LLC as Senior Managing Underwriter, subject to final documentation and market conditions.

ATTACHMENT(S):

1. PFM Scope of Services

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Central Coast Community Energy | Proposal for MA Services Related to a Prepay Transaction Proposed Scope of Services
Energy Prepayment – PFM Financial Advisors LLC
Task 1. Supplier Evaluation and Selection
A. Drafting the RFP and incorporating any edits 3CE may have after which PFM would issue the RFP.

B. Upon receipt of all the responses, PFM would summarize and present them to 3CE for review.

C. PFM would provide additional feedback or context to 3CE regarding the RFP responses if there is deficient information from proposers.

D. Attend and participate in meetings required to put together a working group.

E. PFM will help 3CE evaluate and provide our independent recommendations.

Task 2. Communications
A. Serve as the “prepay bond” subject matter expert to 3CE.

B. Present at Board of Directors meetings and briefings or preparing presentation materials.

C. Create, facilitate, and attend weekly Prepayment Transaction calls after the initial distribution of documentation.

Task 3. Project Management Support
A. Work with the Underwriter as well as the other parties in the working group including Bond Counsel, Disclosure Counsel, Supplier’s Counsel and Underwriter’s Counsel to ensure that the proposed timeline of issuing the prepaid bonds is acceptable to 3CE.

B. Throughout the transaction, review all of the key documents, discussed below:
i. Basic Documents
• Preliminary and Final Official Statements
• Trust Indenture
• Prepaid Energy Sales Agreement
• Bond Purchase Contract
• Re-Pricing Agreement
• Front-End and Back-End Custodial Agreements
• Continuing Disclosure Undertaking
• Debt Service Account Investment Agreement
• Energy Provider Guarantees
• Power Supply Contract
• Limited Assignment Agreement
• Tax Certificate
ii. Issuer Documents
• Resolutions

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Central Coast Community Energy | Proposal for MA Services Related to a Prepay Transaction Task 4. Prepay Transaction Risk and Risk Mitigant Identification and Evaluation There are many benefits and considerations that must be evaluated in order to make informed decisions throughout a prepayment transaction. Throughout the prepayment transaction work, the following considerations will evolve and ad-hoc reporting and discussion will be provided by PFM to assess prepay transaction risk and mitigating factors:

A. Maximizing Term / Savings
B. PPA Production Considerations
C. CA Regulatory Framework – Long Term Contracting
D. Segmented Structure / Re-Pricing
E. LLC Structure
Task 5. Prepay Transaction Management, Technical Support and Analysis A. Run point on technical support and analysis.

B. Independently help 3CE review various PPAs and scenarios to help formulate its desired finance plan.

C. Work in tandem with the banks to ensure both parties agree on assumptions, deal specifics etc.

D. Review and provide feedback on any supplemental investor materials including investor roadshows and other marketing materials.

E. Provide minute-by-minute analysis during the order period, negotiate with the rating agencies regarding their fees, and communicate to 3CE these details.

F. Proactively collect and consolidate all other costs of issuance expenses.

G. On the prepayment transaction, provide the tax certificate supporting the reasonable expectation that the prepay bonds will run to term assuming at least one successful repricing.

H. Generate the FA provided certificate for tax counsel and assist 3CE in issuing an RFP for a bidding agent for the reserve fund and debt service fund investment.

Task 6. Post-Pricing Activities
A. Coordinate any post-closing activities, including reviewing the closing memorandum provided by the Underwriter and ensuring the timing and accurate transfer of funds.

B. Collect and verify all the invoices from the working group to provide to the Bond Trustee.

C. Timely provide a transaction report in PowerPoint presentation or memo format summarizing the executed prepayment transaction.

Energy Prepayment – PFM Swap Advisors LLC
PFMSA will serve 3CE as Municipal Advisor and designated Qualified Independent Representative (“QIR”) in the provision of general swap advisory services related to any swap-related communication, interaction or other discussion (“Swap Communication”) between 3CE and Swap Dealers (as such term is defined by the Securities and Exchange Commission (“SEC”) and the Commodity Futures Trading Commission (“CFTC”)).

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Central Coast Community Energy | Proposal for MA Services Related to a Prepay Transaction PFMSA is obligated to comply with the applicable requirements of CFTC Regulation 17 CFR 23.450(b)(1) in providing QIR services to 3CE:
• As QIR to 3CE, PFMSA will make available qualified professionals to participate in discussions and other interactions with Swap Dealers as 3CE finds necessary or desirable. Additionally, PFMSA will assist 3CE with analysis of any proposals from Swap Dealers. PFMSA may assist 3CE with other swap related tasks such as helping write a swap policy or other related analysis upon 3CE’s request. PFMSA will also assist 3CE, as needed, in completing the ISDA Dodd-Frank Protocols and other matters to comply with the regulatory requirements imposed under Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
• Analyze and model alternative hedge structures and provide price indications. • Review and comment on all hedge documentation and business terms. • Assist in counterparty selection and developing terms for a request for bids (if desired). • Review competitive bids and make a recommendation for award or if so determined. • Negotiate the pricing terms and structure with the Counterparty(s). • Coordinate the closing of the transaction.

Line of Credit – PFM Financial Advisors LLC
A. Educate 3CE on the current options in the bank credit market.

B. Review, finalize, and distribute the Request for Proposal package for the Line of Credit.

C. Review and edit the list of potential providers for the RFP.

D. Field and coordinate answers in conjunction with the 3CE team to questions from potential credit providers.

E. Collect, review and analyze RFP responses.

F. Assist 3CE in best and final solicitations.

G. Assist 3CE in determining best course of action.

H. Participate in bank negotiations including consulting with 3CE on business terms, reviewing and commenting on proposed liquidity facility terms.

I. Assist in the document review and negotiations with the bank(s) chosen to proceed.

J. Assist with any other related matters at the direction of 3CE.

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Staff Report Item 13
TO: Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Gina Urmatan, Senior Accountant
SUBJECT: Receive a presentation on 3CE’s FY 2024-25 Audited Financial Statements DATE: March 18, 2026
RECOMMENDATION:

Receive a presentation on 3CE’s FY 2024-25 Audited Financial Statements.

BACKGROUND:
3CE is responsible for the preparation and fair presentation of its financial statements in accordance with generally accepted accounting principles (GAAP). The independent auditor, Sorren CPAs, conducted the audit in accordance with auditing standards generally accepted in the United States of America (GAAS). The auditors issued an unmodified ('clean') audit opinion, affirming that the financial statements present fairly, in all material respects, the financial position of 3CE as of September 30, 2025, and 2024.

The auditors reported no material weaknesses in internal controls and communicated no significant deficiencies. The audit included required communications with those charged with governance regarding scope, timing, and significant findings.

DISCUSSION/ANALYSIS:

The Independent Auditors’ Report (Report) affirms that 3CE’s financial statements fairly present, in all material respects, the organization’s financial position as of September 30, 2024, and 2025, along with the respective changes in financial position and cash flows. The report includes an unqualified, or "clean," audit opinion, indicating that the financial statements are free from material misstatements and comply with applicable accounting standards.

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The report confirms that the auditors did not identify any internal control deficiencies classified as material weaknesses. Representatives from Sorren CPAs, the external auditors, will attend the Audit and Finance Committee meeting to provide insights and address any questions regarding their review.

FY 2024-25 Financial Highlights
 Total Net Position of $262.7 million (up from $218.2 million); Unrestricted portion $254.1 million supports operations and future programs. Total net position change of 44.5 million.  Ending Cash & Equivalents and short-term investments of $212.9 million (down from $219.2 million) net change of $6.3 million, with operating cash near breakeven, investments rebalanced, and capital purchases made.
 Total Assets increased to $363.4 million (up from $327.2 million). This reflects higher receivables, accrued revenue, and investment balances.
 Total Liabilities decreased to $100.7 million from $109.1 million, reflecting lower supplier security deposits and lease liability balances.
 Operating Revenues of $667.2 million in FY 2024-25 vs. $544.5 million in FY 2024 (+22.6%), driven primarily by higher electricity load and territory expansion (Atascadero & unincorporated SLO County began service Jan 1, 2025).
 Non-operating revenues decreased by $1.8 million from prior year due to the decrease in Federal Treasury rates compared to prior year and lower cash reserves.  The cost of energy increased by approximately $44.7 million due to Resource Adequacy (RA) compliance, Renewable Portfolio Standard (RPS) requirements, and increase in other energy attributes.
 Non-energy operating costs increased $8.0 million from the prior year, mainly from increased costs for higher participation in energy programs, personnel due to increased FTEs from the prior year, data manager fees, and increased community outreach.

FY 2024-25 Actuals Versus Budget
On May 21, 2025, the Audit and Finance Committee received the FY 2024-25 Mid-Year Budget Forecast.

The Forecast estimated expenditures of $642.8 million, 12% below the $730.3 million adopted budget.

The decrease is due to the non-energy costs such as lower capital asset expenditures for acquiring office locations in Monterey and Santa Cruz, lower personnel costs from staffing vacancies, and lower than expected professional services.

However, actual results showed expenditures reaching $633.7 million, with revenues totaling $678.2 million, leading to an increase in net position of $44.5 million.

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FY 2024-25 Actuals Versus Budget Highlights
Revenue vs. Budget
 Totalrevenue of $678.2million reached 90% ofthe budget, $74.8million short ofthe $753 million budget. The budget assumed higher volumes and rate recovery associated with territory expansion and compliance costs, but actual volumes came in lower than anticipated.  Operating revenue from net electricity sales was $78.8 million below budget, primarily due to lower-than-expected retail volume, offset by reduced uncollectible accounts.  Non-operating income of $11 million exceeded budget by $4 million, driven by favorable interest rates and active investment management.

Expenditures vs. Budget
 Total expenditures of $634 million were lower than budget by 13%, coming in $96.6 million below the $730.3 million budget.
 Cost of energy of $592 million was lower than budget by $73.4 million, an 11% variance. The decrease is mainly attributed to the lower than anticipated volumes of load.  Non-energy operating costs of $41.8 million were 36% under budget due to lower spending on energy programs, unspent contingencies, contracted services, and personnel vacancies.

CONCLUSION:
3CE’s FY 2025 financial results reflect solid operational performance, improved net position, and a strengthened financial foundation despite industry-wide cost pressures. The agency remains well-positioned to support ongoing operations, customer programs, and long-term energy procurement commitments.

FISCAL IMPACT:

There is no financial impact by receiving this report.

ATTACHMENT(S):

1. FY 2024-25 Audited Financial Statements

2. Central Coast Community Energy Report to the Directors of the Board

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Ph: (707) 542-3343 sorren.com
3562 Round Barn Cir, #200, Santa Rosa, CA 95403
Independent Auditor’s Report
To the Board of Directors
Central Coast Community Energy
Opinion
We have audited the accompanying financial statements of Central Coast Community Energy (3CE), which comprise the statements of net position as of September 30, 2025 and 2024, the related statements of revenue, expenses and changes in net position, and cash flows for the years then ended, and the related notes to the financial statements.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of 3CE as of September 30, 2025 and 2024, and the results of its operations and cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of 3CE and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about 3CE’s ability to continue as a going concern within one year after the date that the financial statements are issued or available to be issued, including any currently known information that may raise substantial doubt shortly thereafter.

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Independent Auditor’s Report (continued)
Auditor’s Responsibilities for the Audits of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists.

The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS, we:

Exercise professional judgment and maintain professional skepticism throughout the audits.

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Obtain an understanding of internal control relevant to the audits in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of 3CE’s internal control. Accordingly, no such opinion is expressed.

Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.

Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about 3CE’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audits, significant audit findings, and certain internal control-related matters that we identified during the audits.

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Independent Auditor's Report (continued)
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that management’s discussion and analysis be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Santa Rosa, California
March 2, 2026

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CPAs, PC
Report to the
Board of Directors
Central Coast Community Energy
For the year ended September 30, 2025

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Ph: (707) 542-3343 sorren.com
3562 Round Barn Cir, #200, Santa Rosa, CA 95403
To the Board of Directors
Central Coast Community Energy
70 Garden Court, Suite 300
Monterey, CA 93940
We are pleased to present this report related to our audit of the financial statements of Central Coast Community Energy (“3CE”) as of and for the year ended September 30, 2025. Our report summarizes certain matters required by professional standards to be communicated to you in your oversight responsibility for 3CE’s financial reporting process.

This report is intended solely for the information and use of the Audit and Finance Committee, Board of Directors and management of 3CE and is not intended to be and should not be used by anyone other than these specified parties. It will be our pleasure to respond to any questions you have about this report. We appreciate the opportunity to continue to be of service to Central Coast Community Energy.

Santa Rosa, California
March 2, 2026
cc: Dewayne Woods, Chief Financial Officer

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TABLE OF CONTENTS
Required Communications 1
Significant Accounting Estimates 3
Appendices
Appendix A—Significant Written Communications Between Management and Our Firm • Representation Letter 4

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1 REQUIRED COMMUNICATIONS
The following required communications summarize our responsibilities regarding the financial statement audit as well as observations from our audit that are significant and relevant to your responsibility to oversee the financial reporting process.

Our Responsibilities
We described our responsibilities under auditing standards generally accepted in the United States of America have been described to you in our engagement letter dated October 10, 2024. Our audit of the financial statements does not relieve management or you of your responsibilities, which are also described in that letter.

Planned Scope and Timing
We previously issued a separate communication dated December 2, 2025 regarding the planned scope and timing of our audit and identified significant risks.

Accounting Policies and Practices
Preferability of Accounting Policies and Practices
Under accounting principles generally accepted in the United States of America, in certain circumstances, management may select among alternative accounting practices. In our view, in such circumstances, management has selected the preferable accounting practice.

Adoption of, or Change in, Accounting Policies
Management has the ultimate responsibility for the appropriateness of the accounting policies used by 3CE. 3CE did not change any existing significant accounting policies. As disclosed in Note 11, 3CE adopted GASB 102-104 which did not have a significant effect on the financial statements.

Significant Accounting Policies
We did not identify any significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus.

Significant or Unusual Transactions
We did not identify any significant unusual transactions.

Management’s Judgments and Accounting Estimates
Summary information about the process used by management in formulating particularly sensitive accounting estimates and about our conclusions regarding the reasonableness of those estimates is in the attached Summary of Significant Accounting Estimates.

Audit Adjustments and Uncorrected Misstatements
Management chose to pass on one adjustment related to GASB 96 which management concluded wasn't material. We are not aware of any other passed adjustments that were not trivial.

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2 Observations About the Audit Process
Disagreements With Management
We encountered no disagreements with management over the application of significant accounting principles, the basis for management’s judgments on any significant matters, the scope of the audit or significant disclosures to be included in the financial statements.

Consultations With Other Accountants
We are not aware of any consultations management had with other accountants about accounting or auditing matters.

Significant Issues Discussed With Management
No significant issues arising from the audit were discussed or were the subject of correspondence with management.

Significant Difficulties Encountered in Performing the Audit We did not encounter any significant difficulties in dealing with management during the audit.

Shared Responsibilities for Independence
Auditor independence is a joint responsibility and is managed most effectively when management, audit committees, and audit firms work together in considering compliance with applicable independence rules.

For Sorren CPAs, P.C. (the Firm) to fulfill its professional responsibility to maintain and monitor independence, management, the Board of Directors, and the Firm each play an important role.

Our Responsibilities
• We are required to maintain both independence of mind and in appearance when providing audit and other attestation services. It is our responsibility to ensure that the general requirements for performing nonattest services are adhered to and included in all letters of engagement. • We are required to maintain a system of quality management over compliance with independence rules and firm policies.
3CE’s Responsibilities
• Timely inform the Firm, before the effective date of transactions or other business changes, of the following:
− New affiliates, directors, or officers.
• Understand and conclude on the permissibility, prior to 3CE’s, officers, directors, or persons in a decision-making capacity, engaging in business relationships with the Firm. • Not entering into relationships resulting in close family members of the Firm covered persons, temporarily or permanently acting as an officer, director, or person in an accounting or financial reporting oversight role at 3CE.

Significant Written Communications Between Management and Our Firm Copies of significant written communications between our firm and the management of 3CE, including the representation letter provided to us by management, are attached as Appendix A.

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3 SIGNIFICANT ACCOUNTING ESTIMATES
Accounting estimates are an integral part of the preparation of financial statements and are based upon management’s current judgment. The process used by management encompasses their knowledge and experience about past and current events, and certain assumptions about future events. You may wish to monitor throughout the year the process used to determine and record these accounting estimates. The following summarizes the significant accounting estimates reflected in 3CE’s September 30, 2025 financial statements.

Significant Accounting Estimates
Accrued Revenue
Accounting policy/
Management’s estimation
process
Management’s estimate of accrued revenue includes historical trends and anticipated energy usage.

Basis for our conclusion on
the reasonableness of the
estimate
We tested management’s estimate analytically and determined management’s estimate to be reasonable in relation to the financial statements taken as a whole.

Cost of Electricity
Accounting policy/
Management’s estimation
process
Management’s estimate of accrued cost of electricity includes historical trends and anticipated energy usage.

Basis for our conclusion on
the reasonableness of the
estimate
We tested management’s estimate through subsequent
disbursements and analytical procedures and determined
management’s estimate to be reasonable in relation to the financial statements taken as a whole.

Allowance for Uncollectible Accounts
Accounting policy/
Management’s estimation
process
Management’s estimate of the allowance for uncollectible accounts includes historical collection trends and anticipated future collections.

Basis for our conclusion on
the reasonableness of the
estimate
We evaluated the key factors and assumptions used to develop the estimate in determining that the allowance is reasonable in relation to the financial statements taken as a whole.

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APPENDIX A
Significant Written Communications Between Management and Our Firm

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Central Coast Community Energy
70 Garden Court, Suite 300
Monterey, CA 93940
888.909.6227
3Cenergy.org
March 2, 2026
Sorren CPAs, P.C.
3562 Round Barn Circle, Suite 200
Santa Rosa, CA 95403
This representation letter is provided in connection with your audit of the basic financial statements of Central Coast Community Energy (3CE) as of and for the years ended September 30, 2025 and 2024 for the purpose of expressing an opinion on whether the financial statements are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America (U.S.

GAAP).

We confirm, to the best of our knowledge and belief, that as of March 2, 2026:

Financial Statements

1. We have fulfilled our responsibilities, as set out in the terms of the audit engagement letter dated October 10, 2024 for the preparation and fair presentation of the financial statements referred to above in accordance with U.S. GAAP.

2. We acknowledge our responsibility for the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

3. We acknowledge our responsibility for the design, implementation and maintenance of controls to prevent and detect fraud.

4. The methods, data, and significant assumptions used by us in making accounting estimates and their related disclosures are appropriate to achieve recognition, measurement, or disclosure that is reasonable in the context of U.S. GAAP, and reflect our judgment based on our knowledge and experience about past and current events, and our assumptions about conditions we expect to exist and courses of action we expect to take.

5. Related-party transactions have been recorded in accordance with the economic substance of the transaction and appropriately accounted for and disclosed in accordance with the requirements of U.S.

GAAP.

6. The financial statements properly classify all funds and activities in accordance with GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, as amended.

7. All events subsequent to the date of the financial statements, and for which U.S. GAAP requires adjustment or disclosure, have been adjusted or disclosed.

8. The effects of all known actual or possible litigation and claims have been accounted for and disclosed in accordance with U.S. GAAP.

9. Management has followed applicable laws and regulations in adopting, approving and amending budgets.

Docusign Envelope ID: 82A70B6D-9534-471E-98F9-32F77A3EFA87

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Sorren CPAs, P.C.

March 2, 2026

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Central Coast Community Energy

10. Risk disclosures associated with deposit and investment securities and derivative transactions are presented in accordance with GASB requirements.

11. Provisions for uncollectible receivables have been properly identified and recorded.

12. Capital assets, including infrastructure, intangible assets, and right of use assets are properly capitalized, reported and, if applicable, depreciated.

13. The government properly separated information in debt disclosures related to direct borrowings and direct placements of debt from other debt and disclosed any unused lines of credit, collateral pledged to secure debt, terms in the debt agreements related to significant default or termination events with finance-related consequences and significant subjective acceleration clauses in accordance with GASB Statement No. 88, Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements.

14. Components of net position (net investment in capital assets, restricted, and unrestricted) and classifications of fund balance (nonspendable, restricted, committed, assigned, and unassigned) are properly classified and, if applicable, approved.

15. Leases have been properly identified, recorded, and disclosed in accordance with GASB Statement No. 87, Leases.

16. 3CE does not have any material subscription-based technology information arrangements (SBITAs) that need to be disclosed in accordance with GASB Statement No. 96, Subscription-Based Information Technology Arrangements.

17. There are no concentrations or constraints requiring disclosure in accordance with GASB Statement No. 102, Certain Risk Disclosures.

18. We have no direct or indirect legal or moral obligation for any debt of any organization, public or private, or to special assessment bond holders, that is not disclosed in the financial statements.

19. We have complied with all aspects of laws, regulations and provisions of contracts and agreements that would have a material effect on the financial statements in the event of noncompliance. In connection therewith, we specifically represent that we are responsible for determining that we are not subject to the requirements of the Single Audit Act because we have not received, expended or otherwise been the beneficiary of the required amount of federal awards during the period of this audit.

20. We have no knowledge of any uncorrected misstatements in the financial statements.

Information Provided

21. We have provided you with:
a. Access to all information of which we are aware that is relevant to the preparation and fair presentation of the basic financial statements such as records, documentation and other matters. b. Additional information that you have requested from us for the purpose of the audit. c. Unrestricted access to persons within 3CE from whom you determined it necessary to obtain audit evidence.

Docusign Envelope ID: 82A70B6D-9534-471E-98F9-32F77A3EFA87

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Sorren CPAs, P.C.

March 2, 2026

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Central Coast Community Energy
d. Minutes of the meetings of the governing board and committees, or summaries of actions of recent meetings for which minutes have not yet been prepared.

22. All transactions have been recorded in the accounting records and are reflected in the basic financial statements.

23. We have disclosed to you the results of our assessment of risk that the basic financial statements may be materially misstated as a result of fraud.

24. We have no knowledge of allegations of fraud or suspected fraud affecting 3CE’s basic financial statements involving:
a. Management.
b. Employees who have significant roles in internal control. c. Others where the fraud could have a material effect on the basic financial statements.

25. We have no knowledge of any allegations of fraud or suspected fraud affecting 3CE’s basic financial statements received in communications from employees, former employees, analysts, regulators or others.

26. We have no knowledge of noncompliance or suspected noncompliance with laws and regulations.

27. We are not aware of any pending or threatened litigation, claims or assessments; unasserted claims or assessments that are probable of assertion and must be disclosed in accordance with Accounting Standards Codification (ASC) Topic 450, Contingencies; violations or possible violations of laws and regulations; or other matters, including gain or loss contingencies, whose effects should be considered when preparing the financial statements.

28. We have disclosed to you the identity of all of 3CE’s related parties and all the related-party relationships and transactions of which we are aware.

29. We are aware of no significant deficiencies in internal control over financial reporting, including significant deficiencies or material weaknesses, in the design or operation of internal controls that could adversely affect 3CE’s ability to record, process, summarize and report financial data.

30. There have been no communications from regulatory agencies concerning noncompliance with, or deficiencies in, financial reporting practices.

Required Supplementary Information

31. With respect to the Management’s Discussion and Analysis presented as required by GAAP and the Governmental Accounting Standards Board to supplement the basic financial statements:
a. We acknowledge our responsibility for the presentation of such required supplementary information.
b. We believe such required supplementary information is measured and presented in accordance with guidelines prescribed by U.S. GAAP.
c. The methods of measurement or presentation have not changed from those used in the prior period.

Docusign Envelope ID: 82A70B6D-9534-471E-98F9-32F77A3EFA87

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Sorren CPAs, P.C.

March 2, 2026

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Central Coast Community Energy
Dewayne Woods, Chief Financial Officer
Central Coast Community Energy
Mike Maher, Accountant
Docusign Envelope ID: 82A70B6D-9534-471E-98F9-32F77A3EFA87

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Staff Report Item 14
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Dewayne Woods, Chief Financial Officer
SUBJECT: Adopt Resolution PB-2026-02 to establish a temporary residential rate “3CFlex” to support customers impacted by the California Public Utilities Commission’s Power Charge Indifference Adjustment (PCIA) decisions. And approve 3CFlex effective May 1, 2026, through December 31, 2026, with total residential enrollment capped at no more than 10% of residential load DATE: March 18, 2026
RECOMMENDATION:

Adopt Resolution PB-2026-02 to establish a temporary residential rate “3CFlex” to support customers impacted by the California Public Utility Commission’s Power Charge Indifference Adjustment (PCIA) decisions.

Approve 3CFlex effective May 1, 2026, through December 31, 2026, with total residential enrollment capped at no more than 10% of residential load
BACKGROUND:

Effective January 1, 2026, PG&E implemented new generation rates, which include the California Public Utilities Commission’s (CPUC) retroactive application of additional costs for unbundled customers, resulting in a significant increase in the Power Charge Indifference Adjustment (PCIA) for unbundled customers in the 2026 rate year.

The CPUC’s retroactive adjustment to established calculation methodologies did not include any change in existing rates, which now requires a substantial true-up of prior-year under-collections created by the CPUC’s change in rules. As a result, unbundled customers, including CCA customers, are subject to materially higher PCIA charges in 2026, while bundled PG&E customers receive bundled PCIA credit embedded in their generation rate structure.

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This regulatory action creates a substantial one-year cost shift in 2026 that may burden 3CE customers.

At a January 28, 2026 special meeting, the Policy Board reduced 3CE’s generation rates by 25% at a system level after considering 3CE’s prudent management of energy costs, risk strategy, and conservative approach to operational costs.

DISCUSSION/ANALYSIS:

On a weighted Residential E-TOU-C basis, 3CE’s base generation rate remains lower than PG&E’s generation rate before PCIA is applied. 3CE’s generation rate is approximately 9–10% lower than PG&E’s on a comparable basis.

This demonstrates that 3CE’s procurement strategy remains cost competitive and that renewable-forward purchasing has not increased underlying generation costs relative to PG&E.

The 2026 cost-shift impacts are attributable to the CPUC determined PCIA framework. To remain consistent with the Policy Board’s direction for cost-based rates, staff evaluated service offerings to determine opportunities to create a market flexible rate responsive to individual customer’s affordability concerns caused by the CPUC’s retroactive PCIA cost shift. Securing system purchases lower than anticipated budget, removing energy program eligibility, and permitting the rate to adjust to meet the investor-owned utility rate swings, enables 3CE to provide a rate alternative for certain eligible customers up to 10% of retail load. The rate addresses the highest PCIA exposure for 3CE customers, enabling a conservative benchmark to bundled rates.

Approach of 3CFlex to ensure it remains narrowly tailored as an affordability relief:
• Match bundled generation rate (including bundled PCIA) calibrated at 2021 PCIA vintage. • Automatically sunset December 31, 2026, with customers returning to 3CChoice. • Cap enrollment at no more than 10% of residential load. 3CFlex provides a limited affordability tool for customers who value cost parity more than 3CE’s investment in new clean and renewable resources, rate stability, and innovative energy programs. The limited time duration of the proposed 3CFlex preserves 3CE’s clean and renewable buildout commitments and long-term financial stability. Customers electing 3CFlex will not be eligible to participate in 3CE Energy Programs during enrollment in the 3CFlex, which includes if they received rebate funding anytime within FY 25-26 and then the balance of calendar year2026. Additionally, NEM customers are on a special program with unique billing requirements and will not be eligible for 3CFlex for technical implementation reasons.

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By participating in the 3CFlex pilot rate structure, customers are forgoing 3CE’s considerable Energy Program benefits available in each fiscal year to customers:
• EV charger rebates: $500–$3,000
• Income-qualified EV incentives: $2,000–$5,000
• Heat pump water heater rebates: $1,000–$3,500
• Home battery incentives: $1,000–$5,000+
Participation in these programs provides value exceeding the annual impact of temporary PCIA-related rate differences.

Alignment with Board Priorities include:
• Affordability – Provides targeted, time-limited relief. • Financial Stability – Enrollment cap limits fiscal exposure. • Clean and Renewable – Maintains Renewable procurement targets. • Customer Trust – Demonstrates local responsiveness to regulatory impacts.

FISCAL IMPACT:

The 3CFlex is limited to May 1, 2026, through December 31, 2026, and capped at 10% of residential load. The estimated fiscal exposure ranges from $4 million to $7 million depending on enrollment levels and length of participation. The program is transparent, quantifiable, time-limited, and designed to remain within reserve and liquidity targets.

CONCLUSION:
3CE’s 3CFlex residential generation rate remains lower than the investor-owned utilities during a time that customers are facing affordability challenges driven by a one-year CPUC PCIA methodology adjustment. This temporary 3CFlex rate provides targeted relief without altering 3CE’s renewable mission or long-term rate stability.

ATTACHMENT(S):

1. Resolution No. PB-2026-02

2. 3CFlex Table

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RESOLUTION NO. PB-2026-XX

A RESOLUTION OF THE CENTRAL COAST COMMUNITY ENERGY POLICY BOARD OF DIRECTORS APPROVING A TEMPORARY RESIDENTIAL “3CFLEX” ELECTRIC GENERATION RATE EFFECTIVE MAY 1, 2026 THROUGH DECEMBER 31, 2026 WHEREAS, Central Coast Community Energy (3CE) is a Joint Powers Authority (JPA) established pursuant to California Government Code sections 6500 et seq.; and WHEREAS, 3CE operates a Community Choice Aggregation (CCA) program pursuant to Public Utilities Code section 366.2; and
WHEREAS, the Policy Board is responsible for setting electric generation rates consistent with state law and the 3CE Joint Powers Agreement; and
WHEREAS, effective January 1, 2026, PG&E implemented new generation rates reflecting a significant increase in the Power Charge Indifference Adjustment (PCIA) applied to unbundled customers due, in part, to a CPUC-approved retroactive methodology adjustment; and
WHEREAS, this PCIA adjustment creates a one-year affordability impact in calendar year 2026 that is not attributable to 3CE procurement or renewable program decisions; and WHEREAS, 3CE’s base generation rate remains lower than PG&E’s generation rate prior to application of the PCIA; and
WHEREAS, the Policy Board finds it appropriate to establish a temporary Residential 3CFlex generation rate to provide targeted regulatory relief while maintaining 3CE’s renewable commitments and financial stability;
NOW, THEREFORE, BE IT RESOLVED:

The above recitals are true and correct.

Notice of public meetings at which this Resolution was considered was properly given. 3CFlex as established herein applies only to Residential customers on the E-TOU-C rate schedule.

The Basic Rate shall be effective May 1, 2026, and shall automatically sunset December 31, 2026 with customer returning to 3CChoice or electing to return to 3CPrime.

Enrollment in 3CFlex shall be capped at no more than 10% of total residential load.

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Customers electing 3CFlex shall not be eligible to participate in 3CE Energy Programs during enrollment in 3CFlex throughout FY 25-26 or the remainder of calendar year 2026, including customers who have already received an Energy Program Rebate in that time period.

NEM customers are ineligible for enrollment in 3CFlex.

This Resolution is not subject to CEQA pursuant to Public Resources Code section 21080(b)(8) and CEQA Guidelines sections 15273(a) and 15061(b)(3).

The Policy Board Approves:

The establishment of a temporary Residential E-TOU-C rate, 3CFlex, which will be limited duration effective May 1, 2026, through December 31, 2026.

The Policy Board Directs and Authorizes:

Staff to implement and administer the 3CFlex residential rate consistent with this Resolution.

The CEO to take such further actions as may be necessary to implement the intent and purpose of this Resolution.

PASSED AND ADOPTED this ___ day of __________, 2026, by the following vote:

AYES:

NOES:

ABSENT:
__________________________________
Chair
__________________________________
Board Clerk

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ATTACHMENT B
Basic Rate – Residential E-TOU-C
Effective May 1, 2026, through December 31, 2026, the “3CFlex” Residential Rate shall be as follows:

Rate Schedule Basic Rate ($/kWh)
3CFlex Residential Rate $0.05264
Customers enrolled in the 3CFlex Rate are not eligible for Energy Program Rebates throughout FY 25-26 and the balance of calendar year 2026. NEM customers are ineligible for enrollment in this 3CFlex.

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Central Coast Community Energy (3CE) Policy BoardMarch 18, 2026

Central Coast Community Energy (3CE) Policy Board
March 18, 2026