Agenda packet — Central Coast Community Energy (3CE) Policy Board, June 17, 2026

Policy Board of Directors
June 17, 2026
1:30 PM
County of San Luis Obispo
Fourth Floor Community Room
1055 Monterey St,
San Luis Obispo, CA 93408

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:

Central Coast Community Energy
70 Garden Ct, Suite 300
Monterey, CA 93940
1200 Aquajito Rd, Suite 1
Monterey, CA 93940
City of Scotts Valley
City Hall
1 Civic Center Drive
Scotts Valley, CA 95066
County of Santa Barbara
BOS Conference Room
105 East Anapamu Street
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
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.

CONSENT AGENDA

1. Quarterly Regulatory/Legislative Update

2. Investment Performance Report for the period of October 1, 2025 through March 31, 2026

3. Financial Report for the period of October 1, 2025, through March 31, 2026

4. Energy Programs Update

5. Update on Energy Programs' budget management and communications process enhancements

6. The Bruce McPherson Leadership Award

7. Adopt Resolution No. PB-2026-03 approving the FY 2026-27 Financial Policies

8. Adopt Resolution No. PB-2026-04-Remote Access Disruption Policy

REGULAR AGENDA

9. CEO Report
a. SunZia wind achieves Commercial Operation; Additional capacity Awarded to 3CE b. Operations Board Approves Amendments to Expand Clean Energy Portfolio c. Aratina Solar and Storage Project Nears Commercial Operations d. EV Launchpad technical assistance program approved Lunar Energy selected for DERMS and Virtual Power Plant Implementation
f. New Santa Barbara Office Opens
g. Headquarters relocation to Ryan Ranch underway
h. Annual meeting scheduled for September 16-17
i. Community Advisory Council Update

10. Receive Presentation on FY 2024-25 Energy Programs Portfolio Evaluation Report

11. Receive presentation and direct staff to establish a Department of Energy Solutions as part of the FY 2026-27 Budget

12. Presentation on the FY 2025-26 Mid-Year Budget Forecast

CLOSED SESSION

13. CONFERENCE WITH REAL PROPERTY NEGOTIATORS – Government Code Section 54956.8 Property: 4610 West Walnut Street, Soquel, CA (APN 030-201-78)

1. Agency negotiator: Robert Shaw and Dewayne Woods

2. Negotiating parties: Alan Palmer, Palmer Alan Blair Trust

3. Under negotiation: Price and Terms

14. Adjournment

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Staff Report Item 1
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 Policy and Legislative Affairs SUBJECT: Regulatory and Legislative Quarterly Update
DATE: June 17, 2026
RECOMMENDATION:

This memorandum provides the Policy Board with a second 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
June 17, 2026

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Table of Contents
Contents
REGULATORY UPDATE......................................................................................................................................................... 3 Resource Adequacy (RA)................................................................................................................................................. 3 Demand Response (DR)................................................................................................................................................... 4 New Power Charge Indifference Adjustment (PCIA) Rulemaking................................................................. 4 Integrated Resource Planning (IRP)........................................................................................................................... 5 Renewables Portfolio Standard (RPS)....................................................................................................................... 6 PG&E Rule 30 Application for Transmission Service .......................................................................................... 6 Improvements to the Climate Credit.......................................................................................................................... 7 Integrated Energy Policy Report (IEPR)................................................................................................................... 7 California Advanced Electric Rate Design ................................................................................................................ 8 PG&E 2027 ERRA Forecast............................................................................................................................................. 9 SCE 2027 ERRA Forecast................................................................................................................................................. 9 3CE LEGISLATIVE REPORT – Spring 2026 .................................................................................................................10 Federal:.................................................................................................................................................................................10 State: ......................................................................................................................................................................................10 Local:......................................................................................................................................................................................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. Track 1 of the current proceeding will address the 2027 and 2028 RA compliance years and consider further refinements to the slice-of-day (SOD) framework such as issues around RA transactability, accreditation for Long Duration Energy Storage (LDES), and the treatment of energy only resources. Track 2 will present the 2028 Loss of Load Expectation (LOLE) study and establish the Planning Reserve Margin (PRM) for 2028 and 2029.

Status
3CE maintained an active role in Track 1 of the proceeding, supporting comments and participating in stakeholder efforts led by CalCCA to advance hourly load obligation trading. Following the first full year of binding Slice-of-Day (SOD) compliance, the CPUC directed the Energy Division to examine transactability based on observed market outcomes from 2025 and whether these outcomes materially differed from those observed under the prior RA framework. Allowing LSEs to trade obligations could improve affordability by enabling more efficient portfolio alignment and reducing incremental power procurement. Additionally, if surplus capacity in constrained hours could be reallocated across LSEs, by way of transferring hourly requirements, aggregate procurement volumes would be reduced.

Throughout the spring, CalCCA conducted ex parte meetings with each Commissioner’s office to advocate directly on RA transactability and push for the adoption of this trading framework.

Leading up to Track 2, the CPUC Energy Division issued its Final Inputs & Assumptions (I&A) for the upcoming 2028 Loss of Load Expectation (LOLE) study on June 5. The document establishes the key data elements, assumptions, and methodologies and used in determining the Planning Reserve Margin (PRM) for 2028 and 2029. The PRM is a buffer applied on top of LSE RA requirements to account for unexpected changes in supply and demand. Because excessive PRMs can lead to over procurement, 3CE has advocated for a lower PRM in previous RA cycles. Individual parties also had the opportunity to file and serve alternative Inputs & Assumptions documents. 3CE supported CalCCA in submitting an alternative I&A dataset for stakeholder review, offering a more granular, month-specific evaluation of reliability, as opposed to the CPUC’s annual uniform standard.

Next Steps
3CE and other parties will review the competing I&A data sets over the summer, leading up to the submission of individual draft PRM proposals by August 14. The June 5 th submissions began the
proceeding’s Track 2 schedule, which includes an Energy Division workshop and additional draft filings throughout the fall. The final 2028 LOLE studies and PRM determinations will be docketed in October, setting the PRM for the 2028 and 2029 compliance years. Separately, a final decision on Track 1 issues including accreditation for Long-Duration Energy Storage (LDES) resources, adoption of an Unforced Capacity Methodology (UCAP), Hourly Load Obligation trading and other refinements to the RA program is expected by the end of June. As the proceeding moves forward, 3CE will continue to advocate for modifications to improve the affordability and efficiency of the RA compliance program.

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Demand Response (DR) – R.25-09-004
Issue
Demand response (DR) refers to programs and rate structures that encourage customers to adjust or reduce 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, minimizes the need for costly peaking resources, and integrates higher levels of renewable generation. Well-designed DR programs also empower customers to actively manage their energy use while contributing to California’s clean energy transition and greenhouse gas reduction goals. In September 2025, the CPUC opened a new Rulemaking (R.25-09-004) to enhance demand response and ensure DR resources are more predictable, reliable, and cost-effective. In addition to ensuring CCA customers have equitable access to demand response resources, 3CE will advocate that the new policies and programs developed in the rulemaking do not encroach on 3CE’s rate and program autonomy.

Status
On April 30, 2026, parties filed comments in response to an Energy Division staff proposal, recommending the CPUC authorize a two-year “bridge” extension for the IOUs’ 2027 Demand Response program budgets as the current deadlines in the IOU budget application cycles do not align with the proceeding’s timeline. The extension would allow the IOUs to incorporate policy developments established during the rulemaking into their future applications. 3CE did not identify a need to file opening comments on bridge funding, as these budget applications did not present issues of cost shifts to CCA customers or impact CCA DR programs. A Proposed Decision on IOU DR bridge funding is expected in Q3 of 2026.

Next Steps
An Energy Division staff proposal on DR data systems and processes is expected imminently. A priority for 3CE during this proceeding is advocating for the CPUC to pursue systems and processes that support timely and consistent CCA access to customer interval data. CCAs require the ability to integrate the bundled and unbundled portions of a customer’s bill to design and implement their own demand response programs. Following the staff proposal and a workshop process, in which 3CE will participate, a Proposed Decision on these issues is expected later this year.

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
The CPUC held a Track 2 hearing on June 2, following testimony and a Motion for Evidentiary Hearing filed by CalCCA . Track 2 seeks to determine the appropriate valuation in the PCIA of Renewable Energy Certificates (RECs) generated and banked by the IOUs prior to January 2019, when those RECs are used for bundled service customer compliance. The testimony maintained earlier CalCCA suggestions that Pre-2019 Banked RECs be valued at the Renewables Portfolio Standard (RPS) Market Price Benchmark (MPB), and the motion successfully outlined the need for hearing, as this matter will determine if departed CCA customers receive their fair share of benefits from these RECs which they originally helped purchase, while the IOUs advocate that departed customers should receive no benefit.

Track 3 of the proceeding commenced on June 9 with a series of in-person planning workshops to inform the scope and schedule, as well as to consider data access and confidentiality issues for this new track. 3CE has advocated that this track be broadly scoped to accomplish the rulemaking’s objective to reform and update the PCIA, ensuring the proceeding facilitates a full exploration of PCIA modifications and alternative designs.

Next Steps
A final Track 2 decision on how the CPUC values the Pre-2019 Banked RECs in the PCIA is expected in September 2026. Additionally, a ruling setting the remaining scope and schedule is expected following the Track 3 workshops. 3CE will continue to work with CalCCA to submit proposals to the CPUC to reform the PCIA. These include suggestions on how GHG-Free, RPS, RA and other attributes should be allocated, recommend changes to the vintaging of PCIA resources and advocate for structural changes to ensure indifference and reduce, restructure, or remove the continuing obligations of unbundled customer to pay the PCIA.

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
On March 9, the Commission granted a request submitted by CalCCA and several other parties for a delay to the June 1 deadline for filing individual integrated resource plans (IRP). Individual IRPs will now be due on August 10. Separately, on March 19, the Commission released updated 2026 IRP filing materials, including tools, templates, and instructions for how to consider potential allocations from DWR central procurement into long-term planning. The finalization of these materials and the updated deadline provide certainty for 3CE’s plan to achieve its proportional share of GHG emission reduction targets and support state goals. 3CE successfully submitted its mid-term reliability procurement compliance filing on June 1.

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Next Steps
3CE continues to prepare for its upcoming IRP filings and monitor for any further development of the Reliable and Clean Power Procurement Program (RCPPP), intended to eventually replace ad hoc procurement orders.

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 June 12, 3CE submitted its Draft 2026 RPS Procurement Plan to the CPUC. The plan provides information on 3CE’s current renewable portfolio information, upcoming solicitation plans for renewable energy, and long-term planning for renewable energy procurement. The plan also includes possible compliance delay factors, risk assessment for RPS projects, and plans for sales of renewable energy.

While 3CE is required to submit these annual plans, the CPUC has limited oversight of CCA procurement activities. The CPUC’s role is to review the plans of CCAs to ensure that they comply with the CPUC’s RPS Plan requirements. The plan follows guidance issued by an Assigned Commissioner’s Ruling (ACR) from March, which included a detailed list of criteria for LSEs to address in their plans.

Next Steps
Once the CPUC reviews 3CE’s draft plan, the Commission will issue a Decision accepting or conditionally accepting the RPS Procurement Plan. 3CE will have 30 days after the Decision is issued to modify the plan to address any CPUC identified deficiencies and submit its final plan. The 2027 ACR will be developed based on experience from this current cycle and may introduce new requirements.

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
On May 22, CalCCA submitted a reply brief in PG&E’s Electric Rule 30 Application at the California Public Utilities Commission (CPUC), in support of a joint motion for the adoption of a partial settlement agreement between PG&E, CalCCA, Cal Advocates, and the Sierra Club. The settlement secures critical information sharing and coordination for service agreements between PG&E and CCAs. PG&E’s Rule 30 proposes a new tariff for customers requesting interconnection from PG&E at transmission level voltages

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between 50 kilovolts (kV) and 230 kV. The settlement represents major progress for CCAs by securing strict 20 day timelines for PG&E to share new interconnection data and requires PG&E to notify customers on their CCA’s role as the default generation provider.

Next Steps
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 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 May 18, 3CE attended a Planning Workshop for Phase 1B of the California Public Utilities Commission (CPUC) proceeding to improve the California Climate Credit. Phase 1B will address broader structural changes to the Climate Credit. Potential modifications include changes to customer eligibility, number of annual credit distributions, and allocation methodologies. The outcome of phase 1A required the IOUs to distribute residential Climate Credits in August and September and ensures that marketing and messaging regarding customer savings is attributed to the State’s Cap and Invest Program and not from the IOUs who oversee disbursements.

Next Steps
3CE will advocate during this new phase to ensure existing customers continue receiving their fair share of the credit. The Commission expects to reach a decision on these broader changes to the Climate Credit early next year.

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 April 17, the CEC issued its proposed final Scoping Order for the 2026 IEPR. The updated forecast will include scenarios that estimate the potential impacts of the state’s decarbonization strategies and other sources of load growth, such as increases in the number of data centers in the state. In addition to

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establishing the electricity demand forecast, the 2026 IEPR will assess the challenges and opportunities for geothermal development in California.

Next Steps
The policy recommendations featured in the final IEPR, to be adopted in February of 2027, will be informed through a collaborative process which begins with public workshops and comment opportunities starting over the summer. 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.

California Advanced Electric Rate Design –R.26-04-009
Issue
On April 9, the CPUC opened a new rulemaking, R.26-04-009, to establish advanced electric rate design policies to update residential and non-residential rate structures and their underlying cost inputs so that rates more accurately reflect the cost of providing service, send price signals that support efficient use of grid infrastructure, and allocate costs fairly across all customers. The CPUC’s primary focus is on amending policies around the delivery portion of customers' bills to improve reliability and affordability, while ensuring costs to manage the grid are allocated fairly. The OIR responds to increasing affordability pressures driven by wildfire related costs and rapid load growth, while also advancing prior efforts to remove fixed costs out of volumetric rates. This proceeding will look to both develop new rates and policies for emerging issues around large loads like data centers and Commercial and Industrial customers, while also addressing electric rate design issues remaining from previous rulemakings to reform rates for residential customers. Investor-owned utilities are the primary respondents in the Rulemaking, but CCA participation is imperative to ensure any modifications to delivery costs are equitable for CCA customers.

Status
On May 21, CalCCA, with support from 3CE, filed reply comments in the Advanced Electric Rate Design proceeding at the California Public Utilities Commission (CPUC). The comments amplified support for addressing large load and data center issues as an initial track for this proceeding. Additionally, the comments rejected suggestions to broaden the scope of this already expansive proceeding.

Next Steps
A Prehearing Conference, which will set the Rulemaking's scope is expected by the end of June. In this proceeding, 3CE will continue to advocate that any adopted rate design framework prevents cost shifts from large data centers to other customers and establishes robust information sharing requirements between CCAs and IOUs regarding large load interconnection requests and new customer development.

Energy Resources Recovery Account (ERRA) Forecast – A.26-05-007; A.26-05-006 Issue
ERRA forecast applications are filed annually by IOUs to look ahead at energy procurement-related revenue requirements, including the allocation of costs across Power Charge Indifference Adjustment (PCIA) vintages. CCAs participate through CalCCA to ensure: (1) accuracy of forecast account balances, rates, and cost calculations; (2) proper attribution of PCIA vintage; (3) proposer attribution between bundled and unbundled customers; (4) appropriateness of IOU proposals within the context of an ERRA

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forecast proceeding.

Status
PG&E 2027 ERRA Forecast –A.26-05-007
PG&E filed its 2027 ERRA Forecast Application on May 15, 2026. PG&E’s Application includes surprising forecasts, including increasing bundled system average rates by 5.7 percent. Notably, PG&E’s forecast does not incorporate approximately $300 million in generation costs currently under consideration in the 2027 Phase 1 GRC. Various factors such as decreased utility-owned generation revenue requirements and the total costs of the PCIA portfolio could put downward pressure on the PCIA that is facing increased pressure from lower energy forward prices. These insights are a preliminary review and changes are expected to occur prior to the October Update, when the forecasted revenue requirement is updated with the most recent electricity prices. Additionally, Track 2 of the PCIA proceeding is still underway, which will have a large impact on the outcome of the forecast. CalCCA is investigation some of the unexpected forecast elements of PG&E’s Application to inform its protest due June 17.

SCE 2027 ERRA Forecast –A.26-05-006
SCE filed its 2027 ERRA Forecast Application on May 15, 2026. SCE’s Application shows forecast increases to bundled rates of five percent. Similar factors impact the PCIA as the PG&E case. Much can change between now and the October Update, especially with the PCIA proceeding’s Track 2 underway currently with a planned Proposed Decision ahead of the October 1, 2026. CalCCA is investigation some of the unexpected forecast elements of SCE’s Application to inform its protest due June 17.

Next Steps
The IOUs request that the CPUC approve these forecasted 2027 energy procurement revenue requirements to become effective rates on January 1, 2027. The CPUC will soon issue a Resolution determining the category of these proceedings as ratesetting followed by a ruling setting the date for Prehearing Conferences to determine the parties, the positions of the parties, the scope and the schedule of each application. 3CE will work with CalCCA to ensure accuracy of forecast account balances and rates, cost calculations in workpapers, and calculation of the PCIA.

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3CE LEGISLATIVE REPORT – Spring 2026
Federal:
3CE Joins CCEA; Participates in National Advocacy Days in Washington, D.C.

In February, 3CE became a member of Community Choice Energy Alliance, or CCEA (formerly known as LEAN Energy US), the nationwide trade association for Community Choice Aggregators (CCAs). As a member, 3CE joined their Government Affairs Committee, which manages a contract lobbyist team from the firm Meguire Whitney, and holds weekly coordinating meetings. On April 20, 3CE Government Affairs staff attended CCEA's 2026 National Advocacy Days in Washington, D.C., joining CCA leaders from across the country for coordinated meetings with the Department of Energy, the Federal Energy Regulatory Commission, and congressional offices on Capitol Hill. Key issues raised included preserving prepay bond financing authority, advocating for permit certainty for renewable energy projects, and positioning CCAs as partners in making energy more affordable.

CEO and Chief Customer Officer Meet with Congressman Panetta On April 3, CEO Robert M. Shaw and Chief Customer Officer Catherine Stedman met with Congressman Panetta to provide an update on 3CE's operations and priorities.

CCEA Provides Comments to FERC on Large Load Interconnection Rulemaking The surge in electricity demand from data centers and AI has prompted debate over who gets to set the rules for how these large customers connect to the power grid. The Federal Energy Regulatory Commission (FERC) is currently developing those rules, and 3CE's national trade association, CCEA, filed comments in the proceeding. CCEA argued that states and localities, not the federal government, should retain primary authority over local grid decisions, and that CCAs are well-positioned to serve new large loads as energy partners.

Director of Government and Community Affairs Serves on Federal CCA Policy Platform Panel 3CE Director of Legislative Affairs, Das Williams, participated as a panelist on "The Federal CCA Policy Platform: What's New?" alongside representatives from Ava Community Energy and Meguire Whitney, LLC. The panel explored how federal energy policy is impacting affordability, grid access, and emerging electricity demand, and how renewable energy is navigating Federal uncertainty.

State:
3CE-Sponsored Bills Pass Out of Their Houses of Origin
Assembly Bill 1761, authored by Assemblymember Chris Rogers, passed the Assembly Floor on May

27. The bill would require public disclosure of any data provided by an investor-owned utility or the California Public Utilities Commission that is used in the formulation of the Power Charge Indifference Adjustment or other cost recovery mechanisms. This transparency is essential for 3CE to assess the fairness of regulatory charges imposed on our customers and to identify contracts so costly they warrant non-renewal.

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Senate Bill 1138, authored by State Senator Padilla, passed the Senate Floor on May 19. The bill would allow CCAs and other load-serving entities to trade Resource Adequacy on an hourly basis, consistent with the requirement to demonstrate sufficient capacity for every hour of the day. This added flexibility would reduce costs for customers; in recent years, RA expenses have constituted as much as one-third of 3CE's total procurement costs.

Staff Conducts Legislative Meetings During CalCCA Conference Staff leveraged the CalCCA conference in Sacramento to hold timely meetings on both bills alongside Board Members Silva and Hartmann ahead of their respective suspense hearings.

Staff Conducts Outreach in Support of Legislation
Staff continues to secure support for this legislation from local elected officials and Member Agencies, as well as conduct stakeholder outreach to business, environmental, and labor organizations.

Local:

Public Meetings
On March 24, the Santa Cruz County Board of Supervisors voted to direct the Board Chair to send a letter of support for SB 1138 and AB 1761. On April 7, staff provided public comment to the San Luis Obispo City Council in support of the Climate Action Plan update. On April 28, staff provided public comment to the San Benito County Board of Supervisors in support of local battery energy storage system projects. On May 6, staff provided public comment to the Santa Barbara County Planning Commission in support of the Utility Scale Solar Ordinance.

Sponsorships
On April 8, 3CE sponsored the Grower-Shipper Foundation's Ag Woman of the Year event. On April 12, 3CE sponsored Ecology Action's EV Ride & Drive in Salinas. On April 17, 3CE sponsored the Arts Council for Monterey County's Champions of the Arts event. On April 18, 3CE sponsored Earth Day events in Marina and Santa Cruz. On April 19, 3CE sponsored an Earth Day event in Seaside. On April 23, 3CE sponsored United Way of Santa Cruz County's United in Purpose Awards and the Monterey County Business Council's Annual Economic Development Awards. On April 25, 3CE sponsored an Earth Day event in San Benito County, the Bucket Brigade's Golden Shovel Awards, and Habitat for Humanity San Luis Obispo's Build with Us event. On May 1, 3CE sponsored Habitat for Humanity's Denim and Diamonds event and CEC Climate Fridays. On May 16, 3CE sponsored STESA's Chocolate De Vine. On May 19, 3CE sponsored New Beginnings Counseling Center's Annual Luncheon. On May 20, 3CE sponsored the Vineyard Team's 2026 Industry Update. On May 21, 3CE sponsored Veggie Rescue's Sweet 16 celebration. On May 28, 3CE sponsored the SLO County Housing Trust Fund's Strong Foundation Awards. On May 30, 3CE sponsored Santa Barbara City College Foundation's Spring Forward event. On June 4, 3CE sponsored the Girls Inc. Breakfast honoring Santa Barbara County CEO Mona Miyasato. On June 5, 3CE sponsored CommUnify's Champion's Dinner.

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Presentations
On March 26, staff made a presentation to Rancho Goleta Lakeside Mobile Home Park Association on 3CE enrollment and programs. On May 11, staff presented a legislative update to the Monterey Peninsula Chamber of Commerce Government Affairs Committee. On May 20, staff presented on 3CE's program offerings at the City of Goleta's Lunch and Learn: Heat Pumps and Electrification Incentives.

Events Attended
On March 30, staff heard an update from Congressman Panetta at a Santa Cruz County Business Council meeting. On April 2, staff heard an update from San Benito County Supervisor Zanger at a San Benito County Business Council meeting. On April 8, staff attended the South County Chamber of Commerce's Rise & Shine Breakfast and the San Luis Obispo Chamber of Commerce's SLO County Housing Summit.

On April 9, staff attended the Salinas Valley Chamber of Commerce's 105th Annual Awards Luncheon.

On April 10, staff attended the Santa Barbara South Coast Chamber of Commerce's State of the City. On April 15, staff attended the City of Goleta State of the City. On April 16, staff attended the Santa Cruz Area Chamber of Commerce's Annual Awards Gala and the Santa Barbara County Climate Collaborative's Spring Networking Event. On April 22, staff attended the CCEA Capitol Hill Reception. On April 29, staff attended a Lunch and Learn at California State University Monterey Bay. On April 30, staff attended CSUMB's Sustainable Hospitality & Tourism Management Program's 10th Anniversary Celebration. On May 1, staff attended the Carmel Chamber of Commerce's Annual Membership Luncheon. On May 6, staff heard an update from Santa Cruz County CEO Nicole Coburn. On May 7, staff attended a UCSB Ocean Science Institute Fireside Chat with Congressman Jared Huffman. On May 15, staff attended Monterey Bay Economic Partnership's Regional Economic Outlook. On May 20, staff attended the Monterey County Hospitality Association's Quarterly Membership Lunch and the Buellton Chamber of Commerce's State of the City. On May 22, staff heard an update from Congressman Panetta's Chief of Staff at a Monterey County Business Council event. On May 26, staff attended the City of San Luis Obispo's Climate and Energy Roundtable. On May 27, staff attended the inauguration of UCSB Chancellor Dennis Asanis.

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Staff Report Item 2
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 March 31, 2026
DATE: June 17, 2026
RECOMMENDATION:
3CE investment performance report for the period of October 1, 2025, through March 31, 2026.

BACKGROUND:

As of March 31, 2026, Central Coast Community Energy held $282.5 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 operating account with West Coast Community Bank to further diversify its financial holdings. 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 March 31, 2026, 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 energy rate stabilization

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funds. As of March 31, 2026, 3CE held $282.5 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 $120,711,413
cash (sweep) - $102.3M
money market - $11.5M
cash (operating) - $4.0M
letters of credit - $3.0M
Chase $14,030,532 cash (held for collateral)
West Coast Community Bank $14,796,272 money market
Investment
Schwab $65,791,612
Treasuries - $59.0M
cash (sweep) - $0.0M
money market - $6.8M
Fidelity $67,137,272 Treasuries - $61.7M
money market - $5.5M
Total $282,467,101
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 March 31, 2026, 3CE managed $132.9 million in investments across its Schwab and Fidelity brokerage accounts. Through the second quarter, Treasury yields averaged between

3.50% and 4.38%. Short-term Treasuries with maturities under one year represented approximately 88% of total holdings, while three longer-term Treasuries, each valued at $5.0 million, mature in the second and third quarters of 2027 and the first quarter of 2028. 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 March 31, 2026, 3CE held $120.3 million in cash and cash equivalents, $120.6 million in U.S. Treasuries, and $41.5 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 $120,316,327 42.6% 100%
Money Market Funds $41,514,450 14.7% 20%
U.S. Treasuries $120,636,324 42.7% 100%
Total $282,467,101 100.0%

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The FY 2025-26 Adopted Budget, with appropriations of $488.4 million, included estimated investment revenues of $9.1 million. Through the second quarter, investment earnings from operating and investment accounts netted $5.1 million, $2.8 million from interest on cash and money market accounts, and $2.5 million from short-term investments, mostly from Treasuries. Interest earned on 3CE collateral held by counterparties totaled $0.3 million. To date, the total investment and interest earnings from internal liquidity and counterparty collateral are $5.4 million. This first quarter estimate is higher than the $4.5 million estimated in the recommended budget.

As of March 31, 2026, 3CE has 175 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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BACKGROUND:

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funds. As of March 31, 2026, 3CE held $282.5 million in operating and investment accounts. The table below lists the cash and investment balances by account type.

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FISCAL IMPACT:

There is no fiscal impact to receiving this report.

ATTACHMENT(S):

None.

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Staff Report Item 3
TO: 3CE Operations 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 March 31, 2026 DATE: June 17, 2026
RECOMMENDATION:

Receive a financial report for the period October 1, 2025, through March 31, 2026.

SUMMARY:

For the six-month period ended March 31, 2026, 3CE reported operating revenues of $289.8 million and operating expenses of $242.5 million, resulting in operating income of $47.3 million. Net non-operating revenue totaled $5.1 million, primarily driven by interest and investment returns, resulting in a total increase in net position of $52.4 million.

Year-to-date operating revenue was $9.2 million above budget, primarily due to stronger-than-anticipated performance across multiple customer classes. Non-operating revenue, consisting primarily of investment returns from assets held in operating and investment accounts and interest on collateral, exceeded budget by $0.6 million due to higher-than-anticipated investment yields. In total, year-to-date revenues and other sources were $9.8 million above budget, representing a favorable variance of 3%.

This favorable revenue variance will be monitored as historically energy costs trend higher over the remainder of the fiscal year, and rates were adjusted downward on February 15, 2026.

Year-to-date operating expenditures, excluding capital outlay, were $57.0 million below budget, representing a favorable variance of 19%. This variance was primarily attributable to lower-than-anticipated energy costs, which were $54.6 million under budget. The favorable energy cost variance reflects a combination of factors, including lower market prices, the timing of invoices for items such as Renewable Energy Credits (RECs) and annual net energy metering true-ups, and higher-than-planned revenue from congestion revenue rights. These variances are expected to moderate over the remainder

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of the fiscal year as 3CE fulfills its energy-related obligations, including resource adequacy (RA) and REC purchases, and as costs increase during the higher-priced summer months.

Non-energy operating costs were $2.3 million below budget due to lower-than-planned costs for contracted services, staff vacancies, and energy programs. Capital outlay is $0.05 million below budget due to pending work on electric vehicle charging capital projects. Non-energy operating costs are projected to level out over the fiscal year as contracted services materialize and energy programs and capital projects continue to progress. Year-to-date total expenditure, including capital outlay, is $57.0 million lower than the budget, a favorable variance of 19%.

Net position as of March 31, 2026, totaled $315.1 million, representing an increase of $52.4 million from the prior fiscal year-end. This increase was primarily held in cash and investment balances, coupled with a decrease in accrued cost of electricity. Cash, cash equivalents, restricted cash, and investments totaled $282.5 million, an increase of $59.6 million from the start of the fiscal year. The favorable change in liquidity was primarily attributable to cash generated from operating revenues. Overall, the year-to-date statement of net position reflects a strong financial position, with increased liquidity, reduced liabilities, and continued growth in net position compared to the prior fiscal year-end.

FISCAL IMPACT:

There is no financial impact associated with receiving this report.

ATTACHMENT(S):

1. March 31, 2026 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 March 31, 2026

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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 March 31, 2026, and the related statement of revenues, expenses, and changes in net position, and the statement of cash flows for the six 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
May 4, 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 170,824,661$
Cash - restricted 2,979,844
Accounts receivable, net of allowance 38,733,950
Accrued revenue 23,518,107
Other receivables 3,844,686
Investments 93,681,696
Prepaid expenses 223,715
Deposits 21,337,133
Loan receivable 196,118
Total current assets 355,339,910
Noncurrent assets
Investments 14,980,900
Deposits 36,204
Loan receivable 1,037,262
Capital assets, net of depreciation and amortization 6,677,719 Total noncurrent assets 22,732,085
Total assets 378,071,995

LIABILITIES
Current liabilities
Accrued cost of electricity 42,187,024
Accounts payable 1,658,302
Other accrued liabilities 3,535,395
User taxes and energy surcharges due to other governments 1,853,984 Security deposits - energy suppliers 1,116,000
Lease liability 365,298
Total current liabilities 50,716,003
Noncurrent liabilities
Security deposits - energy suppliers 11,950,650
Lease liability 303,990
Total noncurrent liabilities 12,254,640
Total liabilities 62,970,643

NET POSITION
Net investment in capital assets 5,906,509
Restricted for security collateral 2,979,844
Unrestricted 306,214,999
Total net position 315,101,352$
As of March 31, 2026

STATEMENT OF NET POSITION

CENTRAL COAST COMMUNITY ENERGY

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OPERATING REVENUES
Electricity sales, net 289,688,772$
Other income 109,204
Total operating revenues 289,797,976

OPERATING EXPENSES
Cost of electricity 218,758,349
Contract services 6,635,568
Staff compensation 6,559,067
Program incentives 8,558,313
Other operating expenses 1,674,677
Depreciation and amortization 329,328
Total operating expenses 242,515,302
Operating income (loss) 47,282,674

NONOPERATING REVENUES (EXPENSES)
Investment income 5,142,617
Interest expense (17,344)
Nonoperating revenues (expenses) 5,125,273
CHANGE IN NET POSITION 52,407,947
Net position at beginning of period 262,693,405
Net position at end of period 315,101,352$
Six Months Ended March 31, 2026

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 335,566,433$
Receipts from wholesale sales and other operating revenue 6,722,388 Receipts of deposits and collateral 49,898,884
Payments to suppliers for electricity (263,664,896)
Payments for other goods and services (8,139,638)
Payments of deposits and collateral (44,241,185)
Payments for program incentives (9,175,065)
Payments for staff compensation (6,254,639)
Payments of taxes and energy surcharges to other governments (5,693,743) Net cash provided by operating activities 55,018,539

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Payments of lease (189,747)
Purchases of capital assets (492,512)
Net cash provided (used) by capital and related financing activities (682,259)

CASH FLOWS FROM INVESTING ACTIVITIES
Investment income received 3,557,557
Proceeds from sales and maturities of investments 84,300,000 Loan principal received 96,699
Investment purchases (85,640,670)
Net cash provided (used) by investing activities 2,313,586 Net change in cash and cash equivalents 56,649,866
Cash and cash equivalents at beginning of year 117,154,639 Cash and cash equivalents at end of period 173,804,505$ Reconciliation to the Statement of Net Position
Cash and cash equivalents - unrestricted 170,824,661$
Cash - restricted 2,979,844
Cash and cash equivalents 173,804,505$
Change in fair value of investments 1,694,132$
Change in interest income receivable (109,072)$
Six Months Ended March 31, 2026

STATEMENT OF CASH FLOWS

CENTRAL COAST COMMUNITY ENERGY

NONCASH INVESTING ACTIVITIES

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Operating income (loss) 47,282,674$
Adjustments to reconcile operating income (loss) to net cash provided by operating activities
Depreciation and amortization expense 329,328
(Increase) decrease in:

Accounts receivable, net of allowance 23,728,642
Accrued revenue 16,826,201
Other receivables 163,895
Prepaid expenses 230,565
Deposits 4,080,373
Increase (decrease) in:

Accrued cost of electricity (38,550,940)
Accounts payable (1,724,503)
Other accrued liabilities 1,445,905
User taxes and energy surcharges due to other governments (370,927) Security deposits - energy suppliers 1,577,326
Net cash provided by operating activities 55,018,539$

CENTRAL COAST COMMUNITY ENERGY
STATEMENT OF CASH FLOWS (continued)
Six Months Ended March 31, 2026

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 one and six months ended March 31, 2026, and for determining that the budgetary basis of accounting is an acceptable financial reporting framework. We have performed a compilation engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. We did not audit or review the accompanying statement nor were we required to perform any procedures to verify the accuracy or completeness of the information provided by management. Accordingly, we do not express an opinion, a conclusion, nor provide any assurance on this special purpose budgetary comparison statement.

The special purpose statement is prepared in accordance with the budgetary basis of accounting, which is a basis of accounting other than accounting principles generally accepted in the United States of America. This report is intended for the information of the Board of Directors of the Authority.

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

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

Maher Accountancy
San Rafael, CA
May 4, 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 $ 38,788,386 $ 44,875,995 $ (6,087,609) -14% $ 289,688,772 $ 280,544,048 $ 9,144,724 3% $ 578,022,716 $ 288,333,944 Interest and investment returns 895,676 758,333 137,343 18% 5,142,617 4,549,998 592,619 13% 9,100,000 3,957,383 Other income 63,396 6,250 57,146 914% 109,204 37,500 71,704 191% 75,000 (34,204) Total revenues and other sources 39,747,458 45,640,578 (5,893,120) -13% 294,940,593 285,131,546 9,809,047 3% 587,197,716 292,257,123 EXPENDITURES AND OTHER USESCurrent Expenditures Cost of energy 36,513,674 39,637,388 3,123,714 8% 219,213,776 273,862,370 54,648,594 20% 534,776,256 315,562,480 Salaries and benefits 1,320,248 1,208,885 (111,363) -9% 6,559,067 7,032,658 473,591 7% 14,260,774 7,701,707 Services and supplies 3,307,153 3,590,750 283,597 8% 16,602,878 18,440,977 1,838,099 10% 38,160,686 21,557,808 Capital outlay 102,782 100,000 (2,782) -3% 550,011 600,000 49,989 8% 1,200,000 649,989 Total current expenditures 41,243,857 44,537,023 3,293,166 7% 242,925,732 299,936,005 57,010,273 19% 588,397,716 345,471,984 Surplus (deficit) (1,496,399)$ 1,103,555$ (2,599,954)$ 52,014,861$ (14,804,459)$ 66,819,320$ (1,200,000)$ (53,214,861)$ Favorable variances represent revenues exceeding budget or expenditures below budget.

Annual

CENTRAL COAST COMMUNITY ENERGY

BUDGETARY COMPARISON SCHEDULE
Current Month and Six Months Ended March 31, 2026
Current Month
Variance
Favorable
(unfavorable)
Year-To-Date
Variance
Favorable
(unfavorable)

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CCA Program surplus/(deficit)
per budgetary comparison schedule: 52,014,861$
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 172,403 Subtract depreciation expense (329,328)
Add back capital asset acquisitions 550,011
Change in Net Position 52,407,947$

REVENUES, EXPENSES AND CHANGES IN NET POSITION

CENTRAL COAST COMMUNITY ENERGY

BUDGET RECONCILIATION TO STATEMENT OF
Six Months Ended March 31, 2026

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Budget Item
YTD Variance -
Favorable
(Unfavorable) Comment
Electric Sales Revenue, net 3.3% 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 20.0% 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 6.7% Staffing expenses are under budget due to the timing of new hires.

Services and Supplies 10.0% This category includes accounting, IT, technical and other consultants.

Budget Commentary for significant items

CENTRAL COAST COMMUNITY ENERGY
October 1, 2025 through March 31, 2026

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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$ 110,254,298$ 124,052,493$ 126,672,529$ Gains/Losses/Interest 2,157,798$ 331,876$ 320,565$ 354,632$ 351,482$ 354,822$ 444,421$ Average APY 4.12% 3.87% 3.92% 3.83% 3.43% 4.21%INVESTMENTSSchwab/FidelityFunds Invested - Average Balance 131,114,341$ 131,499,666$ 131,948,441$ 132,208,888$ 132,677,578$ 133,044,877$ Gains/Losses/Interest 2,414,462$ 574,669.46 289,175.13 406,774.61 300,989.12 472,598.40 370,254.94 Average APY 5.26% 2.64% 3.70% 2.73% 4.27% 3.34%

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 17,139,197$ 12,087,676$ 2,420,910$ 1,784,025$ 5,302,142$ 38,733,950$

CENTRAL COAST COMMUNITY ENERGY
Summary of Accounts Receivable, Net of Bad Debt Allowance As of March 31, 2026

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Staff Report Item 4
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Inaara Muhammad, Manager of Energy Programs SUBJECT: Update on 3CE’s FY 2025-26 Energy Programs
DATE: June 17, 2026
RECOMMENDATION:

This report recommends that the Policy Board receive an update on 3CE’s FY 2025-26 Energy Programs.

BACKGROUND:
3CE’s Energy Programs have been administered since 2019 to 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 agency’s 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 third quarter of 3CE’s fiscal year continued to show increased participation in 3CE’s programs. As a result, 3CE is forecasting full utilization of the Energy Programs budget. 3CE is proactively communicating when programs reach 75% of their allocated budget spend and application queue.

Communication includes posting on 3CE’s website, notifying contractors/stakeholders, and removing the application link when the program reaches its budget limit.

The table below highlights the agency’s programs’ fiscal year impact through May 2026.

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IMPACT FY 2025-26 (to date)
GHG reductions1 Over 4,372 mt CO2e
Load Shifted Over 8.5 MWh daily
Heat Pump Water Heater & HVAC Units 555 units
Induction Cooktops 24 units
All-Electric New Construction 148 units
E-Buses 15 E-buses
Electric Vehicles 790 EVs
EV Chargers 705 EV Chargers
Ag Equipment 9 rebates
Total Incentives Distributed $12 million
Table 1: Energy Programs Impact in FY 2025-26 (to May 31st) 3CE’s Energy Programs Portfolio Analysis Update (Attachment 2) 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 May 27, 3CE’s Operations Board approved a contract with Optony to expand technical assistance for electric vehicle planning and EV charger development. The improved technical assistance service is planned to launch at the beginning of FY 2026-27 to support commercial, multifamily, and member agency customers in EV and EV charger planning and procurement.

Building Electrification
Electrify Your Home: As recommended by 3CE’s Community Advisory Council and developed through community engagement efforts, 3CE is examining options for a virtual home assessment service to enhance the Electrify Your Home program.

Additionally, staff are reviewing the GoGreen state program with loan financing assistance for electrification equipment such as heat pumps.

1 Does not currently include estimated GHG reductions through 3CE’s Residential Battery Rebate Program.

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Agricultural Electrification
Ag Electrification Program: 3CE is in the process of reviewing its Ag Electrification Program with the Community Advisory Council (CAC). In March and April 2026, 3CE conducted a second round of stakeholder engagement sessions to build on prior input and CAC guidance across the identified focus areas. Staff presented refined program concepts and gathered additional feedback from growers and industry partners to inform final program pathways. Staff will present the feedback and recommended program elements to the CAC in June including expanded rebates, technical assistance, and future equipment demonstration opportunities.

Energy Optimization
Residential Battery Rebate Program (RBRP) / Virtual Power Plant (VPP): Due to unprecedented demand, all funds available for 3CE’s RBRP were fully committed within the first five months of the agency’s fiscal year. As a result, 3CE’s closed the program to new applications. 3CE’s Policy Board approved an additional $3.7M to pay applicants who had received their Permission To Operate (PTO) letter and already applied prior to March 18th. While 3CE is no longer accepting applications for home battery incentives, the VPP Program – anticipated to be available in October 2026 – will offer customers with qualifying residential battery systems pay for performance incentives to support grid reliability.

Staff have also been working to integrate customer communication capabilities into the agency’s Customer Relationship Management (CRM) system. With rebate status inquiries representing a significant portion of customer support interactions, the improvements will allow for automated, proactive digital communications designed to help meet the needs of rebate applicants efficiently and effectively.

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 customers and local 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 May 2026.

IMPACT FY 2025-26 (to date)
GHG reductions1 Over 4,372 mt CO2e
Load Shifted Over 8.5 MWh daily
Heat Pump Water Heater & HVAC Units 555 units
Induction Cooktops 24 units
All-Electric New Construction 148 units
E-Buses 15 E-buses
Electric Vehicles 790 EVs
EV Chargers 705 EV Chargers
Ag Equipment 9 rebates
Total Incentives Distributed2 $12 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; Includes additional incentive dollars in excess of budget approved by Policy Board for 3CE’s Residential Battery Rebate Program

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Transportation Electrification

1.Electrify Your Ride
Over 3,361 mtCO2e avoided thus far
Equal to 784 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.
$3.4mil distributed out of $4.2mil budget
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 $40.5M in all-electric purchases
supported
Over 1429 applications approved
across all 5 counties
Figure 1.1: % of applications across counties
2172 EVs, EV Chargers, and Electrical
Upgrades supported this fiscal year
Figure 1.3: Rebates approved by incentive type
7 commercial and multi-family customers
receiving technical assistance
26% rebates to income-qualified customers
Figure 1.2: Incentive distribution to income-qualified customers

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Transportation Electrification
73% of buses to a Title 1 school or
disadvantaged community (DAC)
Figure 2.1: % buses for DAC/Title 1 School, by county
9 0
6 0
1 2
3 4
5 6
7 8
9 10
Transit Bus Shuttle Van School Bus - Type
C/D

2.Electric Bus (E-bus) Program
Over 384 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.
$1.3mil distributed out of $1.4mil budget
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.

May 1st, 2026: Approximately 90% of E-Bus Program rebates have been distributed for FY 2025-26.

Pending applicants and other involved stakeholders have been notified of a potential program pause when funds have been fully distributed. 2 school districts & 3 transit agency supported across three counties
15 all electric buses supported

$28M in all-electric
purchases enabled through
3CE’s E-Bus program
Figure 2.2: Rebates approved by e-bus type

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Transportation Electrification

3.Plan, Charge, and Electrify Your Fleet
13 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. $363k distributed out of $2.1mil budget
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 $1M 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.
$423k spent out of $700k budget
Pilot Updates
Workplace Charging at 3CE’s San Luis Obispo Office: fully operational and active as of September 2025.

Workplace Charging at 3CE’s Soquel Office: fully operational and active as of November 2025.

Public Charging in Santa Maria: On October 21, the Santa Maria City Council approved the Site Lease License Agreement for 3CE’s Public EV Charger Asset Pilot. The project officially kicked off on December 10 and is progressing through construction and implementation activities.

Located near the Santa Maria Public Library, the site includes Level 2 and DC Fast Charging infrastructure to expand public charging access within the region. Construction coordination, utility engagement, and permitting activities are ongoing, with completion anticipated by Q3 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

10.02 t GHG
emissions avoided
Equivalent to planting
272 trees
50% increase
in staff EV
adoption

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Building Electrification

5.Electrify Your Home Program
Over 548 mt CO2e avoided, equal to over
74 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.
$1.4mil distributed out of $2.5mil budget
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
63% of rebates distributed to income-qualified customers 896 rebates in fiscal year 2025-26
Figure 5.1: Rebates approved by incentive type
EYH supported over 50 unique, local installers across five counties to complete over $5M in all-electric and heat pump installations

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Building Electrification

6.New Construction Electrification Program
148 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. $423k distributed out of $1.2mil budget
9 2 1
Figure 6.1: all-electric housing units incentivized by county NCEP supported 5 local contractors
to build all-electric housing across
3CE’s service area
136
All-electric Affordable
Housing Units
Accessory Dwelling
Units
Market Rate Housing Disaster Rebuild

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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.
$43k distributed out of $100k budget
Program Design Updates
3CE is closely monitoring impacts from recent legislative decisions and exploring available support pathways. Cost effectiveness studies for new reach code opportunities are anticipated to be released in June 2026.

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
Cities and Counties engaged in reach code
planning and implementation include…
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

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Agricultural Electrification

1.Agricultural (Ag) Electrification Program
79 mtCO2 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.
$141k distributed out of $800k budget
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 $319,157 across 9 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 8.5 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. $4.6mil distributed out of $7.2mil total budget
Program Design Updates
April 20, 2026: The Policy Board voted to close the program to new applications and allocate $3.7 million to pay applicants who had received their Permission to Operate (PTO) letter and applied to the program prior to March 18. 3CE is currently developing a Virtual Power Plant (VPP) for interested customers, anticipated to launch in October 2026.

Figure 9.1: daily load shift during peak hours
529 applications across all five counties
Figure 9.2: % participation by county
17% of applications from CARE/FERA or
Medical Baseline enrolled customers
155 customers using scheduling
assistance
Over 65 local
contractors actively
installing battery systems
for 3CE customers

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Energy Optimization

10. Hourly Flex Pricing Pilot 1 & 2
Over 16,100 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
91 meters across all three customer
classes
Figure 10.2: pilot participation by customer type

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Staff Report Item 5
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 Energy Programs’ budget management and communications process enhancements.

DATE: June 17, 2026
RECOMMENDATION:

This recommends that the Policy Board receive an update on Energy Programs’ budget management and communications process enhancements.

BACKGROUND:

While Energy Programs have shown a year over year increase in positive impact for key metrics such as equity customer participation and CO2e reductions, additional participation has also resulted in increased incentive spend. To address this increased participation, while still driving positive results, additional steps have been implemented by staff.

In Fiscal Year (FY) 2023-24, the budget included approximately $15 million for Energy Programs’ incentives, divided across 11 programs. Of the $15 million budgeted, $11 million was spent—a $1.8 million or 12% increase over the prior fiscal year, reflecting growing program uptake. Approximately 36% of the incentive funds distributed were for equity-qualified projects. The electrification programs resulted in approving 1,842 applications and a reduction of 3,758 metric tons of CO2e. The remaining $4 million of underspend allowed for flexibility when external factors increased individual program participation from original forecast levels.

In FY2024-25, the Operating Budget included a similar $15 million incentive budget as the prior year.

However, there was one additional program and two additional pilots. Several of the existing programs from the prior year also had enhanced scopes to more directly meet customer needs. As a result, application participation and key impact metrics increased significantly, with 42% of incentive funds

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distributed to equity-qualified projects and the electrification programs approving 2,869 applications and reducing emissions by 6,042 metric tons of CO2e. The full $15 million incentive budget was spent by year end—a 25% increase in spend over the prior fiscal year, driven by this growth in participation. Staff managed within the overall programs budget by tracking spend monthly and reallocating funds from programs with significant underspend. Unlike the prior year, no underspend buffer remained.

In FY2025-26, Energy Programs is experiencing a further increase in participation, requiring more proactive steps across budget management, customer communications, and application processing. As of May 2026, Energy Programs has already approved 3,776 customer applications, approximately double the participation of the entire prior year. This trajectory—driven by a maturing awareness of 3CE’s program offerings, continued portfolio enhancements, and sustained equity and emissions outcomes— reflects the positive impact of Energy Programs while also necessitating the budget management and communication steps described in this report.

DISCUSSION/ANALYSIS:

As 3CE's programs have matured and customer participation has grown, sustained demand has made disciplined budget management more critical than ever. This staff report outlines the structural steps being implemented to strengthen how individual program budgets are managed, how information is communicated to customers, and how applications are processed.

Factors Contributing to Increased Programs Participation and Spend A review of increased program participation and the associated budget overrun identified the following root causes:
• The expiration of Federal Tax Incentives drove a surge in customer participation for programs.

Additionally, participation levels remained elevated even after the Federal incentives ended, sustaining demand beyond original projections.
• Energy Programs spending forecast in January showed projections of underspend in certain programs offering the potential to balance 3CE’s overall program portfolio budget. However, actual results reflected a matured customer participation rate, eliminating the anticipated net excess funding.
• Certain programs require a longer timeline of approximately 4 to 12 months between a customer’s financial commitment and their eligibility to submit a program application, making real-time budget adjustments difficult.
• With an iterative and manual application review process for certain programs, a backlog of applications accumulated in the processing queue, including a significant number of incomplete applications awaiting customer follow-through.

Steps Implemented: Managing EPs Budget and Communications In response to these findings, the following measures are being implemented to strengthen program oversight and customer communication:

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Budget Management
• Staff will no longer rely on shifting funds from the anticipated underspend of certain programs to allow for inter-program budget transfers. Instead, staff will manage each individual program budget independently. Inter-program budget flexibility will be reserved for the final quarter of 3CE’s fiscal year only, when spend forecasts can be measured with greater accuracy. • For programs providing customer rebates, 3CE will seek to transition to a pay-for-performance incentive structure where feasible, replacing large one-time, up-front rebates with a more sustained, event-based customer partnership model.
• Continue monthly Budget Performance Review internal meetings to assess actual versus planned program spend. Escalate to senior leadership any program deviating more than 20% from planned budget.

Transparency and Customer Communications
• Report percentage spend, and queued amounts, for each individual program’s budget in the regular Energy Programs update provided at all 3CE board meetings. • Update 3CE’s website if an individual program reaches 75% of its budget before the first nine months of the fiscal year.
• Remove the application link when an individual program’s spend—including applications in queue—reaches its limit. Notify any known impacted customers or stakeholders and post a corresponding update on the website.

Application Processing
• Continue internal monthly Budget Performance Reviews (BPR) and expand reporting to include applications in queue that have not yet been paid. Maintain tracking of larger anticipated program applications.
• Reduce application processing time through automation and enforce stricter timelines for the submittal of incomplete documents, where feasible, in order to limit funds held in queue. • Standardize the application cancellation window following notice of an incomplete application.

Implement automated, ongoing status updates for customers via Salesforce Marketing Cloud.

FISCAL IMPACT:

There are no fiscal impacts associated with this staff report.

CONCLUSION:

With programs participation having matured, 3CE is now consistently distributing its full incentive budget. Additional structure is being implemented to ensure the budget is allocated optimally across individual programs, and greater transparency is achieved for spending across the broader program portfolio.

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Staff Report Item 6
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Das Williams, Director of Government and Community Affairs Sophia Schwirzke, Community Relations Manager
SUBJECT: Establish the Bruce McPherson Leadership Award and Adopt a Selection Process DATE: June 17, 2026
RECOMMENDATION:

This memorandum recommends that the Board establish the Bruce McPherson Leadership Award and adopt a selection process.

BACKGROUND:

Bruce McPherson has been a driving force behind community choice aggregation along the Central Coast, leading the creation of 3CE and serving as the agency's first Policy Board Chair. Establishing an award in his name honors his leadership and reinforces the values supporting the agency's mission.

DISCUSSION/ANALYSIS:

The Bruce McPherson Leadership Award honors the vision, dedication, and collaborative spirit that Bruce McPherson brought to the formation and growth of 3CE. The award recognizes champions for local control of energy resources, cross-jurisdictional partnership, and those who exhibit an unwavering commitment to clean, affordable, locally controlled energy and energy policy.

This award recognizes an elected official, community leader, or public servant who exemplifies the qualities Bruce McPherson brought to 3CE:
 Visionary leadership in advancing clean energy, electrification, or climate action  Collaborative spirit in building partnerships across jurisdictions, agencies, or sectors to achieve shared energy and sustainability goals

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 Commitment to community in ensuring that the benefits of clean energy reach all residents, businesses, and industries
The award recipient will be selected based on the following framework:

1. Staff solicits nominations from 3CE Policy and Operations Board members and community stakeholders.

2. Nominees will be evaluated by staff against the three award criteria outlined above.

3. The recipient will be selected in consultation with the Policy Board’s Chair and Vice Chair.

4. The award will be presented at the 3CE Annual Meeting.

FISCAL IMPACT:

None.

CONCLUSION:

The Board's approval of this action establishes the Bruce McPherson Leadership Award and adopts the accompanying selection process, enabling 3CE to formally recognize elected officials, community leaders, and public servants who advance clean energy, cross-jurisdictional collaboration, and community benefit. The action positions the agency to present the inaugural award at the 3CE Annual Meeting.

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Staff Report Item 7
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Juan Lopez, Director of Finance
SUBJECT: Adopt Resolution No. PB-2026-03 approving the FY 2026-27 Financial Policies DATE: June 17, 2026
RECOMMENDATION:

Consider adopting Resolution No. PB 2026-03 approving the Fiscal Year 2026-27 Financial Policies.

BACKGROUND:

The Policy Board adopts 3CE’s Financial Policies (Policies) annually as part of the budget development process to ensure alignment between the agency’s fiscal framework and strategic objectives. This recurring adoption process keeps the Policy Board informed of 3CE’s financial management practices and affirms the foundation for the annual recommended budget.

The Policies have been revised, including consolidating administrative and accounting policies into a single, comprehensive framework. Notable updates included establishing reserve types, including the Strategic Reserve, Energy Rate Stabilization Reserve, Renewable Energy Innovation and Initiatives Reserve, and Capital Infrastructure Reserve. Further revisions clarified how those reserves are measured, moving from net position to readily available liquidity to more accurately reflect 3CE’s fiscal resiliency.

Staff received support for proposed FY 2026-27 Financial Policies from the Audit & Finance Committee at its May 27 meeting.

DISCUSSION/ANALYSIS:

Staff reviewed the Financial Policies to identify improvements in clarity, terminology, and policy completeness. The review incorporated credit rating methodology applicable to public electric utilities and comparable policies from peer California CCAs.

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The proposed changes fall into four categories:

1. Energy Rate Stabilization Reserve. The most substantive policy change concerns the Energy Rate Stabilization Reserve. Revisions clarify that the central purpose of this reserve is to support rate smoothing and long-term rate stability, thus sustaining customer trust and mitigating opt-out risk during periods of market and regulatory volatility. New language also describes the reserve's accounting treatment under GASB Statements 62 and 63, the ability to defer inflows of resources (revenues) and their effect on net position. Transparency and replenishment expectations are also formalized: any material or sustained use of the reserve must be reflected in the Recommended Budget, accompanied by a long-term replenishment plan.

2. New Section: Credit Rating, Coverage, and Liquidity Targets. This new section is added, establishing formal targets for credit rating, liquidity, and access to capital markets. Key provisions include a Days Liquidity on Hand (DLOH) target of 180 days (mirroring the reserve target allocation based on expenditures), a long-term credit rating target of A+/A1 or higher with any nationally recognized rating organization, the ability to maintain a committed revolving liquidity facility with investment-grade financial institutions (with authority by the Policy Board), and a requirement for the CFO to report annually to the Audit & Finance Committee on the status of any liquidity facility. This section formalizes practices already implied by the agency's financial management approach and provides a policy foundation for credit-related decisions.

3. Capital Infrastructure Reserve and Capital Projects. Section 6.5 is updated to require that funding contributions to the Capital Infrastructure Reserve be established annually through the budget process or amended by Policy Board resolution, providing clearer governance over reserve funding. In the Capital Facilities section, the language has been updated to reference Resolution No. PB-2025-04, which delegates authority to the Executive Committee to approve capital projects up to $5.0 million per project, with CEO approval of associated contracts.

4. Structural Consolidation and Terminology Alignment. Three sections have been removed to eliminate redundancy: the standalone "Proprietary Fund" subsection (former 4.2), the "Establish 3CE Priorities" subsection (former 5.10), and the "Use of Unreserved Net Position" subsection (former 6.2), each of which is adequately addressed within other existing or updated provisions.

Throughout the document, "appropriations" is updated to "expenditures" and "programs" to "operations" to better align with enterprise fund terminology.

FISCAL IMPACT:

Adopting the FY 2026-27 Financial Policies promotes financial sustainability by formalizing liquidity and credit-rating targets, strengthening reserve-replenishment requirements, and providing clear governance over capital and reserve decisions. These policies position 3CE to adapt to volatile market and regulatory conditions while pursuing stable customer rates.

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CONCLUSION:

The FY 2026-27 Financial Policies reflect meaningful updates across multiple areas, most notably, the addition of formal credit rating and liquidity targets, a clarified and strengthened Energy Rate Stabilization Reserve policy, and structural consolidation to reduce redundancy. An annual update to the Financial Policies ensures that 3CE's Recommended Budget is developed within a practical, current, and transparent framework for fiscal planning and management.

ATTACHMENT(S):

1. Draft Resolution No. PB-2026-03

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DRAFT RESOLUTION NO. PB-2026-03

A RESOLUTION OF THE CENTRAL COAST COMMUNITY ENERGY POLICY BOARD OF DIRECTORS ADOPTING THE FY 2026-27 FINANCIAL POLICIES.

WHEREAS, the Policy Board of Central Coast Community Energy (“3CE”) adopts Financial Policies annually as part of the budget development process to ensure alignment between the agency’s fiscal framework and its strategic objectives; WHEREAS, 3CE’s Financial Policies provide fundamental guidance for financial planning and management, helping the agency navigate uncertainties that have fiscal impacts like energy market volatility, regulatory changes, and customer impacts; WHEREAS, the FY 2025-26 Financial Policies clarified the purpose and application of the Energy Rate Stabilization Reserve, strengthening its strategic role in supporting rate stability and customer retention;
WHEREAS, staff propose adding a new Credit Rating, Coverage, and Liquidity Targets section (Section 8.0), establishing formal targets, including a Days Liquidity on Hand, a long-term credit rating target, and a requirement to report annually to the Audit and Finance Committee on the status of any liquidity facility;
WHEREAS, the policies further strengthen the Energy Rate Stabilization Reserve policy by formalizing its accounting treatment under GASB Statements 62 and 63 and establishing transparency and long-term replenishment requirements;
WHEREAS, updating the Capital Infrastructure Reserve and Capital Facilities provisions to require annual budget-process governance and to reference Resolution No. PB-2025-04 for capital project approvals; and
WHEREAS, the proposed revisions also include structural consolidation to eliminate redundant sections and align terminology throughout to better reflect enterprise fund standards and improve policy clarity and consistency; and
WHEREAS, the proposed revisions also include minor grammatical corrections and formatting adjustments that improve policy clarity and consistency.

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

1. The Policy Board hereby adopts:
a. FY 2026-27 Financial Policies attached hereto as Attachment B, as the official financial framework guiding budget development and fiscal planning for the upcoming year.

PASSED AND ADOPTED this 17
th Day of June 2026, by the following vote:

AYES:

NOES:

ABSENT:

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__________________________________
Chair, Fred Keeley
Attest:
__________________________________
3CE Board Clerk

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ATTACHMENT A – FINANCIAL POLICIES (redlined)

1.0 Purpose and Background
The prudent and responsible stewardship of public assets is a principal obligation of Central Coast Community Energy (3CE) officials and managers. The development and maintenance of financial policies enable 3CE officials to protect those public assets, ensure transparency, and build public trust. Financial policies define a shared understanding of how 3CE administers its financial affairs and communicates how the agency manages its resources to deliver the highest value to the communities served.

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

These policies provide general guidance in the management of 3CE’s fiscal affairs and are to be used by all 3CE employees to meet their obligation to operate in a financially prudent manner. The Recommended Budget is developed in accordance with this framework.

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

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• Support sound financial management by providing accurate and timely information on 3CE’s financial condition; and
• Provide a framework for the wise and prudent use of debt financing and maintain a strong credit rating in the financial community, with the long-term goal of achieving and sustaining a rating in the A category or higher.

2.1 The Annual Budget
The Chief Executive Officer (CEO) will recommend a balanced budget that:
• Aligns annual expenditures with the revenue requirement established through a cost-of-service methodology; • Minimizes reliance on reserves and one-time funding sources for ongoing operations; and • Maintains competitive, cost-based rates while supporting 3CE’s renewable energy goals.

Through the CEO, the Chief Financial Officer (CFO) will consult with 3CE Officers and seek their input in developing the Recommended Budget through cooperative discussions and financial education. The CEO will keep the Policy Board apprised of the condition of 3CE’s finances and emerging fiscal issues.

3.0 Roles and Functions

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

The CEO is the fund manager for 3CE’s enterprise fund and any other funds that may be created.

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

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

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

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

4.0 Services and Fund Structure

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

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

4.3 Rate Structure and Net Position
The enterprise fund will maintain an adequate rate structure to cover the cost of all operations, including cash flow, capital replacement and maintenance, debt service if applicable, contingency funding, reserve contributions, and depreciation. Rates may be offset from the available unreserved

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net position, including the Energy Rate Stabilization Reserve, only after these requirements are met.

5.0 Operating Budget

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

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

The Recommended Budget shall be presented to the Policy Board for adoption in September of each year and clearly presented to a general audience of the public.

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

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

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

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

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system utilized for budgetary control. As the administrator of the budgetary control system, the CFO shall notify the CEO when a department approaches its expenditure limit. The CFO shall seek guidance from the CEO on all issues relating to expenditures and controls. 3CE Officers, in coordination with the CFO, have primary responsibility for managing departmental budgets by:
• Providing accurate and timely budget estimates;
• Monitoring revenues to ensure timely receipt in the amounts anticipated; • Ensuring that expenditures comply with the law, adopted resolutions, policies, and align appropriations relative to revenues;
• Providing prompt notification to the CEO when either revenues or expenditures are not as anticipated; and
• Preparing and justifying budget revisions when necessary

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

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

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

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

5.9 Budget Development
Budget development is an annual process incorporating the Policy Board’s priorities and weighing competing requests for 3CE resources within expected fiscal constraints. The process begins with departments preparing “baseline” budgets proposing levels of service and staffing that can be carried out within expected resources (e.g., revenues). Departments may submit “augmentation requests” for additional resources to mitigate potential impacts, increase staffing/services, or invest in infrastructure. The CEO evaluates baseline budgets and augmentation requests within the constraints of a balanced budget and builds the annual Recommended Budget. Staff considers the following criteria in formulating recommendations for the annual budget and subsequent mid-year budget modifications:

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• Mandated by current law, regulation, or Policy Board policy; • Alignment with 3CE’s strategic initiatives and priorities; • Necessary to maintain the current level of mission-critical services/operations; • Substantiation of compelling public need (e.g., health, safety, economic vitality, quality of life) that cannot be met within existing resources;
• Likelihood of success based on prior performance, degree of planning/specificity, requested resources, and assumed timeline;
• Leverages sustainable financial support from non-3CE sources; • Appropriate placement of responsibility (federal, state, or local); • Degree of urgency; and
• Critical infrastructure investment to ensure productivity and continuity of operations.

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

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

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

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

5.12 Capital Asset Definition
3CE defines capital assets as assets with initial, individual costs of $5,000 or more and an estimated useful life greater than one year, except infrastructure, for which the threshold is set at $100,000.

Capital assets include both tangible and intangible assets categorized by asset type for reporting purposes.

Infrastructure refers to long-lived capital assets that are typically stationary and can be preserved for significantly longer than most other capital assets. Infrastructure assets typically include, but are not limited to, energy generation and storage facilities, electric distribution systems, and grid interconnection infrastructure.

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

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6.0 Net Position and Reserve Policies

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

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

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

6.3 Energy Rate Stabilization Reserve
The agency shall maintain an energy rate stabilization reserve equal to twenty (20%) of the budgeted COE. This reserve serves as a financial buffer to absorb fluctuations in energy costs and to respond to unforeseen changes in market conditions or regulatory requirements that may increase power procurement expenses beyond what rate adjustments can cover.

The central purpose of this reserve is to support rate smoothing and long-term rate stability. By strategically using this reserve, 3CE pursues stable customer rates even during periods of cost volatility, strengthening its position as a load-serving entity and sustaining customer trust.

The reserve may be partially or fully accounted for under Government Accounting Standards Board (GASB) Statement 62 and GASB Statement 63, which govern the presentation of deferred outflows and inflows of resources and their effects on net position. A transfer into the reserve reduces revenue and the change in net position in the year of deferral by the same amount. A transfer from the reserve increases revenues and changes net position in the year the transfer occurs.

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The reserve balance is recorded on the Statement of Net Position as unrestricted net position and, if deferred, in a separate section following liabilities, entitled Deferred Inflows of Resources.

Transfers to and from the reserve are recorded in the Statements of Revenues, Expenses, and Changes in Net Position under Operating Revenues.

Any material or sustained use of the reserve shall be reflected in the Recommended Budget, including a long-term plan to replenish the reserve. This reserve may be utilized throughout the fiscal year at the direction of the CEO, with subsequent reporting to the Audit & Finance and Energy Risk Management committees and the Boards.

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

6.5 Capital Infrastructure Reserve
The agency shall establish a capital infrastructure reserve sufficient to provide for the operation, routine scheduled maintenance, reasonably anticipated unplanned repair, and orderly replacement of 3CE’s capital infrastructure, including enterprise software, real estate, and electric generation and storage facilities. Funding contributions to this reserve shall be established annually through the budget process or otherwise amended by Policy Board resolution.

6.6 Measurement of Reserve Targets
Due to the nature of the agency's business, the mechanism for funding the four reserves shall be cash, cash equivalents, and short-term investments, including any balance in the Energy Rate Stabilization Reserve held as deferred inflows. The reserves must be liquid and available to ensure they can be used for their intended purpose.

7.0 Capital Facilities and Improvement Policies

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

Projects in excess of $100,000 with an estimated useful life of at least 5 years and non-recurring costs are considered capital projects and should be evaluated against other uses and priorities. All capital projects should be included in the Adopted Budget or taken to the Policy Board for approval and amendment to the Adopted Budget.

Per Resolution No. PB-2025-04, the Executive Committee is delegated to approve capital projects that do not exceed $5,000,000 per project, with CEO approval of any necessary contracts or agreements to effectuate the approved projects within that limit.

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8.0 Credit Rating, Coverage, and Liquidity Targets

8.1 Rationale
A strong credit profile reduces 3CE’s borrowing costs, expands access to power-supply counterparties without onerous collateral postings, and signals financial discipline to ratepayers and member agencies. 3CE manages its finances to achieve and sustain an investment-grade issuer credit rating, with the long-term objective of reaching and maintaining a rating in the A category or higher.

8.2 Financial-Metrics Targets
Reserves shall support a DLOH (Days Liquidity on hand) target equal to 180 days. The Financial Policies seek to achieve a long-term target of a strong investment-grade rating (A+/A1 or higher) or an equivalent rating from any nationally recognized rating organization.

8.3 Liquidity Facilities
3CE may maintain a committed liquidity facility (revolving credit agreement or equivalent) with one or more investment-grade financial institutions. The CFO shall report annually to the Audit and Finance Committee on the status of the liquidity facility, including pricing, covenants, available headroom, and any anticipated renewal or replacement activity.

8.4 Credit-Rating Maintenance
3CE shall maintain active relationships with at least one nationally recognized credit rating organization. The CFO shall provide the Policy Board with any updates to 3CE’s rating actions and outlook changes.

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

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ATTACHMENT B – FINANCIAL POLICIES

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credit rating in the financial community, with the long-term goal of achieving and sustaining a rating in the A category or higher.

3.0 Roles and Functions

The CEO is the fund manager for 3CE’s enterprise fund and any other funds that may be created.

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

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

4.0 Services and Fund Structure

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

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5.0 Operating Budget

The Recommended Budget shall be presented to the Policy Board for adoption in September of each year and clearly presented to a general audience of the public.

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

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

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

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

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• Substantiation of compelling public need (e.g., health, safety, economic vitality, quality of life) that cannot be met within existing resources;
• Likelihood of success based on prior performance, degree of planning/specificity, requested resources, and assumed timeline;
• Leverages sustainable financial support from non-3CE sources; • Appropriate placement of responsibility (federal, state, or local); • Degree of urgency; and
• Critical infrastructure investment to ensure productivity and continuity of operations.

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

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

Capital assets include both tangible and intangible assets categorized by asset type for reporting purposes.

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6.0 Net Position and Reserve Policies

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The reserve balance is recorded on the Statement of Net Position as unrestricted net position and, if deferred, in a separate section following liabilities, entitled Deferred Inflows of Resources.

Transfers to and from the reserve are recorded in the Statements of Revenues, Expenses, and Changes in Net Position under Operating Revenues.

7.0 Capital Facilities and Improvement Policies

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

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8.0 Credit Rating, Coverage, and Liquidity Targets

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

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Staff Report Item 8
TO: 3CE Policy Board of Directors
FROM: Charles J. Mckee, General Counsel
SUBJECT: Adopt Resolution No. PB-2026-04-Remote Access Disruption Policy DATE: June 17, 2026
RECOMMENDATION:

Adopt Resolution No. PB-2026-XX which adopts a Remote Access Disruption Policy.

BACKGROUND:

Senate Bill 707 (SB 707), effective January 1, 2026, amended the Brown Act and requires entities that allow remote public access to adopt a policy for actions to take when the remote connection is disrupted.

DISCUSSION/ANALYSIS:

Government Code section 54953.4 requires that any eligible legislative body providing remote public access adopt a policy governing what steps staff must take to restore remote access in the event of a disruption and establishes conditions under which the Board may reconvene open session without remote access after good-faith restoration efforts of at least one hour. The Policy establishes that the 3CE Clerk of the Board (or designee) shall continuously monitor remote access during meetings, immediately notify the Chair upon any disruption, and document all restoration efforts. If access cannot be restored within the minimum one-hour period, the Board may, by roll-call vote, make findings and resume open session in accordance with the statute.

While most 3CE Board meetings are conducted in multiple locations requiring video/audio connection, some meetings are in-person only and this policy will apply subsidiary 3CE legislative bodies, such as the Executive Committee.

FISCAL IMPACT:

There is no fiscal impact from the recommendation.

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CONCLUSION:

The Resolution satisfies the statutory requirement of Government Code section 54953.4 by adopting 3CE’s Remote Access Disruption policy.

ATTACHMENT(S):

1. Draft Resolution No. PB-2026-04

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RESOLUTION NO. PB-2026-04
RESOLUTION OF THE POLICY BOARD OF DIRECTORS OF CENTRAL COAST COMMUNITY ENERGY (3CE) ADOPTING A REMOTE ACCESS DISRUPTION POLICY PURSUANT TO GOVERNMENT CODE SECTION 54953.4 WHEREAS, the Ralph M. Brown Act (Gov. Code, § 54950 et seq.) requires that all meetings of the legislative body of a local agency be open and public and permits remote access via the use of video and audio public participation; and
WHEREAS, Government Code section 54953.4 requires that when an eligible legislative body provides remote public access to its meetings, it must adopt a policy establishing the procedures that will be followed in the event of a disruption to telephonic or internet service, including minimum good-faith restoration efforts and the conditions under which the body may reconvene open session without remote access; and
WHEREAS, the Policy Board finds that adopting the Remote Access Disruption Policy required by Government Code section 54953.4 will enhance 3CE’s ability to conduct public business efficiently while ensuring continued public access and participation.

WHEREAS, the Policy Board adopts this policy for all 3CE legislative bodies.

NOW, THEREFORE, BE IT RESOLVED by the 3CE Policy Board of Directors as follows:

Section 1. Recitals
The above recitals are true and correct.

Section 2. Operative Period
This Resolution shall remain in effect from the date of its adoption through December 31, 2029, consistent with the operative period of Government Code section 54953.8.7, unless earlier repealed, superseded or extended.

Section 3. CEQA
The adoption of this Resolution is not a “project” subject to the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines sections 15378(b)(2) and 15061(b)(3), as the policy constitutes general policy and procedure which can be seen with certainty to have no potential for causing a significant effect on the environment.

Section 4. Effective Date
This Resolution shall take effect immediately upon its adoption.

Section 5. Remote Access Disruption Policy
Pursuant to Government Code section 54953.4, the Policy Board hereby adopts the following Remote Access Disruption Policy, which shall govern all 3CE legislative body meetings at which remote public access via a two-way telephonic service or two-way audiovisual platform is provided:

5.1 Purpose and Scope
The purpose of this Policy is to establish procedures that all the 3CE legislative bodies will follow in the event of a telephonic or internet service disruption that prevents remote access during a Ralph M. Brown Act meeting, consistent with the requirements of Government Code section 54953.4.

This Policy applies to all meetings of all 3CE legislative bodies for which public attendance via a two-way telephonic service or a two-way audiovisual platform is provided in accordance with Government Code section 54953.4, subdivision (b)(1). Page 80 of 132

5.2 Definitions
For purposes of this Policy, “Board” means all the 3CE legislative bodies, including committees; “meeting” shall have the meaning stated in Government Code section 54952.2(a); “two-way audiovisual platform” and “two-way telephonic service” shall have the meanings stated in Government Code section 54953.4(e)(3); and “Clerk” means the 3CE Clerk of the Board or their designee.

5.3 Monitoring and Immediate Response
The Clerk shall continuously monitor each meeting to ensure that remote access is functional. At minimum, at least one device shall be present and visible to the Clerk throughout the meeting, displaying a live feed of the webcast or equivalent monitoring tool confirming continuous operation of remote access.

Immediately upon any disruption to remote access, the Clerk shall notify the Chair. The Chair shall interrupt proceedings (using a gavel if necessary) and announce that remote access has been disrupted and that proceedings must pause. The Chair may allow a brief pause, during which no discussion or action may occur, to assess whether remote access can be quickly re-established.

The Chair shall then announce that open session is in recess.

5.4 Closed Session During Recess
During an open session recess required by a remote access disruption, the Board may convene in closed session for any item properly agendized for closed session at that meeting. If the Board met in closed session during the recess, it shall announce any reportable actions taken in closed session prior to resuming open session, as required by the Brown Act.

5.5 Good-Faith Restoration Efforts
During the open session recess, the Clerk shall continuously and diligently work to restore remote access. Good-faith restoration efforts shall include, at a minimum, all of the following:
• Restarting any services, software, or equipment used to facilitate remote access, including any computers used to access those services.
• Attempting to access the remote access service or tool from a secondary or backup device. • Checking all physical network and electrical connections that may be responsible for the disruption.
• Reviewing the service status of the remote access platform (e.g., through the vendor’s status page or support portal).
• Resetting local network connections, including routers or switches as applicable. • Contacting technical support for the remote access platform or the applicable internet or telecommunications service provider.
• Documenting each step taken and the time at which it was taken, for inclusion in the meeting record.

5.6 Resumption Upon Restoration of Remote Access
Upon restoration of telephonic or internet service and the related tools necessary for remote access, the Clerk shall immediately restore remote access and announce to remote attendees that service has been restored. If the Board is currently in closed session, the Clerk shall announce to remote attendees that the Board is in closed session and that open session will resume immediately after the closed session concludes. If the Board is not in closed session, the Clerk Page 81 of 132 shall announce that open session will resume immediately upon re-establishment of a quorum in the Board meeting room.

5.7 Resumption If Remote Access Cannot Be Restored
Following a disruption and the required recess of open session, the Board, through the Clerk, must make good-faith efforts as described in Section 8.5 for a minimum of one (1) hour to restore telephonic or internet service.

If, after no less than one hour of such good-faith efforts, remote access cannot be restored, the Chair may call the Board back into open session. Immediately upon reconvening, the Chair shall:
• Announce that remote access could not be restored despite good-faith efforts made in accordance with this Policy for no less than one hour;
• Describe the specific restoration efforts taken by the Clerk; and • State that Government Code section 54953.4 and this Policy permit the Board to resume open session without remote access upon the Board making both of the following findings by roll-call vote:
◦ That good-faith efforts to restore telephonic or internet service have been made in accordance with this Policy; and
◦ That the public interest in continuing the meeting outweighs the public interest in remote public access.

Any member of the Board may then move to adopt these findings and resume open session. The Board shall take a roll-call vote on the motion. If the motion passes by majority vote, open session may resume in accordance with the posted agenda. If no motion is made or the motion does not pass, open session must immediately end. Prior to hearing any open session items, if the Board met in closed session during the recess, it shall announce any reportable closed session actions as required by the Brown Act.

5.8 Disruptions Caused by Members of the Public
If a disruption to meeting proceedings is caused by the conduct of members of the public (whether participating in person or remotely) rather than by a technical failure of remote access, the Chair shall address the disruption pursuant to Government Code section 54957.9. The Chair may order removal of disruptive individuals, including by muting or removing remote participants from the teleconference platform, and may declare a recess or adjourn the meeting to a specified time and place pursuant to Government Code section 54955 if orderly conduct cannot otherwise be maintained.

5.9 Documentation
The Clerk shall document all disruptions to remote access and any disruptions caused by members of the public, together with all actions taken in response, in the minutes of the meeting. The record shall include the time of the disruption, the time restoration efforts began, each step taken to restore service, and the time at which open session was reconvened or adjourned.

5.10 Amendment
This Remote Access Disruption Policy may be amended from time to time by resolution of the Policy Board adopted at a regular or special meeting. Staff shall periodically review this Policy and recommend updates as warranted by changes in applicable law or 3CE’s technology infrastructure.

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PASSED AND ADOPTED this 17
th Day of June 2026, by the following vote:

AYES:

NOES:

ABSENT:
__________________________________
Chair, Fred Keeley
Attest:
__________________________________
Board Clerk

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Staff Report Item 9
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
SUBJECT: CEO Report
DATE: June 17, 2026
SUNZIA WIND ACHIEVES COMMERCIAL OPERATION; ADDITIONAL CAPACITY AWARDED TO 3CE The SunZia Wind project has achieved commercial operation and is now delivering 205 MW of renewable wind generation to 3CE through the California grid. The project provides approximately

11.5% of 3CE’s residential load and represents a significant milestone in advancing the agency’s long-term clean energy goals. CEO Shaw attended the project’s dedication ceremony on June 16 alongside project partners, regulators, and energy industry leaders.

In addition, project developer Pattern Energy recently conducted an auction for additional generation from SunZia Wind and awarded 50 MW to 3CE. Staff are currently negotiating a 15-year agreement for this capacity, set to begin in January 2027. The proposed agreement is anticipated to be presented to the Operations Board for consideration in August.

OPERATIONS BOARD APPROVES AMENDMENTS TO EXPAND CLEAN ENERGY PORTFOLIO At its May meeting, the Operations Board approved amendments to three major power supply agreements that will strengthen 3CE’s long-term resource portfolio. The amendments included the Coso Geothermal Project Power Purchase Agreement, to increase deliveries of clean baseload geothermal energy by up to 5.5 MW and extend the agreement by five years. Support for continued development of the Fish Lake Geothermal Project was also affirmed and an amendment to the Atlas XIV Solar agreement was approved, which will extend the contract term by eight years and increase deliveries by an additional 50 MW of solar generation. With this amendment, Atlas XIV Solar will serve approximately

10.5% of 3CE’s load.

ARATINA SOLAR AND STORAGE PROJECT NEARS COMMERCIAL OPERATION 3CE and Silicon Valley Clean Energy staff recently visited the Aratina Solar and Storage Project in Kern County. During the site visit, staff toured the solar generation facilities, battery energy storage system, and project substation. Project representatives provided an overview of system operations, safety protocols, remote monitoring capabilities, community engagement efforts, and environmental mitigation measures. The project is currently undergoing final testing and is nearing commercial operation. Once fully operational, it is expected to serve nearly 7% of 3CE’s retail load.

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EV LAUNCHPAD TECHNICAL ASSISTANCE PROGRAM APPROVED
The Operations Board authorized CEO Shaw to execute an agreement with Optony, Inc. to provide transportation electrification technical assistance services through September 2028. The agreement consolidates 3CE’s existing Plan Your Fleet and Electrify Your Ride Commercial Concierge programs into a single, expanded offering called EV Launchpad. The new program is designed to help public agencies, businesses, and multifamily property owners move from planning to implementation by providing fleet transition planning, charging infrastructure assessments, engineering support, site design services, and funding assistance. EV Launchpad is expected to launch on October 1, 2026.

LUNAR ENERGY SELECTED FOR DERMS AND VIRTUAL POWER PLANT IMPLEMENTATION The Operations Board authorized the CEO to execute a Master Services Agreement with Lunar Energy to implement a Distributed Energy Resource Management System (DERMS), supporting development of 3CE’s future Virtual Power Plant (VPP). The platform will enable 3CE to monitor, optimize, and dispatch customer-sited resources, including batteries and other distributed energy technologies, in real time.

The agreement includes deployment of the DERMS platform, customer onboarding, device integrations, and initial VPP pilot operations, with future phases expanding to additional technologies such as electric vehicle chargers and smart thermostats. Staff are targeting 5 MW of dispatchable VPP capacity by the end of 2026 and 30 MW by 2030. The agreement structure aligns program costs with customer enrollment and resource performance as the VPP scales over time.

NEW SANTA BARBARA OFFICE OPENS
On May 18, 2026, 3CE celebrated the opening of its new Santa Barbara office at 820 State Street, expanding the agency’s presence in the southern portion of its service area and strengthening opportunities for local engagement. The ribbon-cutting ceremony was attended by customers, community stakeholders, board members, and elected officials. Featured speakers included U.S.

Representative Salud Carbajal, Buellton Mayor and 3CE Policy Board Director David Silva, and Santa Barbara South Coast Chamber of Commerce Chief Marketing Officer Mary Lynn Romero.

The office includes meeting and collaboration space that will support engagement with local governments, customers, and community partners throughout Santa Barbara County.

HEADQUARTERS RELOCATION TO RYAN RANCH UNDERWAY
On June 1, 2026, 3CE became the leaseholder for its new headquarters location at 20 Ryan Ranch Road in Monterey. The agency’s current lease at 70 Garden Court concludes on June 30, and staff are actively preparing for the transition during late June and early July. Tenant improvements have been completed, modernizing the facility and preparing it for occupancy. The new headquarters will include dedicated Board meeting space, conference rooms, private offices, collaborative work areas, and capacity for future growth.

To support the move, 3CE recently issued a Request for Qualifications for furniture procurement and workspace design services. The effort will also provide an opportunity to evaluate collaborative workplace concepts that may inform the design of the agency’s future permanent headquarters.

ANNUAL MEETING SCHEDULED FOR SEPTEMBER 16–17
3CE’s Annual Meeting will be held September 16–17, 2026, at the Embassy Suites in Seaside. The event will include Policy Board and Operations Board meetings, as well as a joint workshop focused on local energy development and affordability. All Board members are encouraged to attend. Directors are asked to RSVP to Meredith Cook by July 10.

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COMMUNITY ADVISORY COUNCIL UPDATE
At its June meeting, the Community Advisory Council received a presentation from Lunar Energy regarding the company’s Distributed Energy Resource Management System platform and Virtual Power Plant implementation services. Lunar Energy currently supports several California Community Choice Aggregators and has deployed its Gridshare platform across more than 100,000 distributed energy resources worldwide. The platform will support 3CE’s efforts to aggregate and dispatch customer-sited resources, helping reduce procurement costs, avoid Resource Adequacy expenses, and create additional customer value.

Staff also presented the results of the Spring 2026 Agricultural Electrification stakeholder engagement effort and recommended updates to the program ahead of its FY 2026–27 relaunch. Outreach findings reinforced earlier feedback that equipment availability and upfront project costs remain the primary barriers to electrification. Stakeholders also expressed strong interest in technical assistance and opportunities to evaluate equipment performance in real-world agricultural settings.

Based on this feedback, staff are recommending expanded rebate pathways, a Technical Assistance Pilot planned for Spring 2027, and on-farm equipment demonstration events. Staff also plan to broaden the program’s equity framework to improve access for small and emerging farmers, with expanded program offerings targeted for launch on October 1, 2026.

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Staff Report Item 10
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Inaara Muhammad, Manager of Energy Programs SUBJECT: FY 2024-25 Energy Programs Portfolio Evaluation Report DATE: June 17, 2026
RECOMMENDATION:

This report recommends that the Policy Board receive the FY 2024-25 Energy Programs Portfolio Evaluation report.

BACKGROUND:
3CE’s Energy Programs have been administered since 2019 to support 3CE’s mission by serving the Central Coast community by engaging in electrification initiatives, strengthening the local economy, and reducing greenhouse gas emissions.

On September 18, 2025, 3CE’s Policy Board of Directors approved its FY 2024-25 operating budget, included approximately $15 million for energy programs. As part of 3CE’s commitment to continual improvement, 3CE evaluated the performance of these programs and compiled findings and recommendations for improvement in its annual Energy Programs Portfolio Evaluation report. 3CE is actively implementing recommendations from FY 2024-25’s Energy Programs Portfolio Evaluation, including implementing design enhancements to improve accessibility for all customers, and developing new pilots that empower customers with energy optimization to reduce bills and maximize renewable energy. 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:
3CE’s annual Energy Programs Portfolio Evaluation supports the agency’s mission by assessing programs’ effectiveness, informing future program design, and delivering on the agency’s commitment to

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transparency and continual improvement. The portfolio assessed all programs through key performance indicators across four criteria - Program Participation, Program Performance, Program Impact, and Internal Resources. The attached report (Attachment 1) includes a portfolio overview, program goals set at the start of the fiscal year, quantitative reporting on metrics, and key takeaways across 3CE’s energy programs portfolio.

CRITERIA PURPOSE KEY PERFORMANCE INDICATORS
Program
Participation
Where are 3CE’s incentives
being distributed?
 Average $ funded per application
 % Funding distributed per county
 $ Incentives distributed
Program
Performance
Is the program being utilized as
predicted by FY plan?
 $ Incentives distributed
 % Allocated budget utilized
 Achievement of FY 2024-25 program goals
Program
Impact
Is the program making a
positive contribution to the 3CE
community?
 $ in All-electric purchases/support enabled
 Greenhouse gas emissions avoided
 % of Funding distributed to underserved
communities
Internal
Resources
Are 3CE resources being used
effectively?
 Avg days to fund a project
 Conversion rate from vendors providing technical
assistance
 % of Applications approved
In FY 2024-25, the electrification projects incentivized by 3CE’s Energy Programs resulted in a reduction of 6,042 metric tons of CO2e in FY 2024-25, equivalent to taking 1,409 gas-powered passenger vehicles off the road and avoiding nearly 15.4 million gas-powered miles driven, based on the average mileage for a passenger vehicle in California. Furthermore, customers’ load shifted 2.3 MWh daily through discharging their residential batteries during the peak hours of 4pm-9pm. The portfolio’s achievements included:

The evaluation’s findings and recommendations are used to improve 3CE’s Energy Programs and enable an accessible renewable energy transition for all 3CE customers and communities. Initiatives in FY 2025- 26, include:

IMPACT FY 2023-24 FY 2024-25 % Change
GHG reductions Over 3,700 MT CO2e Over 6,042 MT CO2e +63% Load Shifted 0kWh Over 2.3 MWh daily N/A
Heat Pump Water Heater & HVAC Units 396 units 1,146 units +189% All-Electric New Construction 460 units 302 -34%
E-Buses 18 E-buses 17 E-buses -6%
Electric Vehicles 1,108 EVs 1,008 EVs -9%
EV Chargers 819 EV Chargers 1,062 EV Chargers +30%
Ag Equipment 18 rebates 22 rebates +22%
Total Incentives Distributed $11 million $15 million +36%

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 Relaunch of 3CE’s Electrify Your Home program with improved design;  Development of a Virtual Power Plant pilot;
 Review of the Agricultural Electrification program with the Community Advisory Committee (CAC); and
 Creation of a comprehensive electrification technical assistance service.

In the 2026-7 fiscal year, 3CE plans to develop a long-term Energy Programs strategic plan with input from 3CE’s customers, board, CAC, and stakeholders.

FISCAL IMPACT:

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

CONCLUSION:

The comprehensive evaluation of 3CE’s FY 2024-25 Energy Programs portfolio supports 3CE’s mission by assessing program effectiveness in providing access to electrification for all 3CE customers. The evaluation also informs future program design to further the agency’s commitment to greenhouse gas reductions and local economic growth.

ATTACHMENT(S):

1. Energy Programs FY 2024-25 Portfolio Evaluation Report

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2024-2025 ENERGY PROGRAMS PORTFOLIO EVALUATION 1

ENERGY PROGRAMS

PORTFOLIO EVALUATION

FISCAL YEAR
2024-2025

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2 CENTRAL COAST COMMUNITY ENERGY

TABLE OF CONTENTS
Cover Page
Table of Contents
Executive Summary
Introduction
Approach & Methodology
Energy Programs Overview
Transportation Electrification
Electrify Your Ride
E-Bus Program
Plan, Charge, and Electrify Your Fleet
Electrification Grants
EV Charger Asset Pilot
Building Electrification
Electrify Your Home
New Construction Electrification
Reach Codes
Agricultural Electrification
Ag Electrification Program
Energy Optimization
Residential Battery Rebate
Hourly Flex Pricing Expanded Pilot 1 & 2
Findings and Recommendations
Transportation Electrification
Building Electrification
Agricultural Electrification
Energy Optimization
Looking Ahead & Conclusion
Appendix A1: Greenhouse Gas Emissions Inputs & Conversion Factors Appendix A2: Sources
............................................................................................................................................................1 ..................................................................................................................................................... ...............................................................................................................................................3 ...........................................................................................................................................................4 ...................................................................................................................................5 ...................................................................................................................................8 . ................................................................................................................................10 ..........................................................................................................................................11 ................................................................................................................................................12 .. ..........................................................................................................13 ......................................................................................................................................14 ....................................................................................................................................15 ..........................................................................................................................................16 ........................................................................................................................................17 . ...................................................................................................................18 ....................................................................................................................................................19 .....................................................................................................................................20 .............................................................................................................................21 .............................................................................................................................................22 .............................................................................................................................23 .....................................................................................................24 .........................................................................................................................25 ................................................................................................................................26 ..........................................................................................................................................27 .....................................................................................................................................28 .............................................................................................................................................29 ...............................................................................................................................30 ..................................................................31 .......................................................................................................................................................32

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Central Coast Community Energy (3CE) serves the central coast by providing reliable, affordable, clean electricity and electrification programs to reduce greenhouse gas (GHG) emissions and strengthen our local economy. As part of 3CE’s commitment to actively supporting regional climate action across 3CE’s service areas in Monterey, San Benito, San Luis Obispo, Santa Cruz, and Santa Barbara counties, 3CE’s Energy Programs provide customers with tools to accelerate regional electrification through rebates, technical assistance, and guidance to optimize their energy use. This comprehensive evaluation of the agency’s fiscal year (FY) 2024-25 Energy Programs portfolio supports 3CE’s mission by assessing programs’ effectiveness, informing future programmatic design, and delivering on the agency’s commitment to transparency and continual improvement.
3CE’s portfolio evaluation includes metrics, which are structured around four key categories – program participation, program performance, program impact, and internal resources. Standardized Key Performance Indicators (KPIs) were tracked within each category to allow uniform analysis of each program and identify opportunities to improve program accessibility.
2024-2025 ENERGY PROGRAMS PORTFOLIO EVALUATION 3

EXECUTIVE SUMMARY

1. https://www.epa.gov/energy/greenhouse-gas-equivalencies-calculator IMPACT FY 2023-24 FY 2024-25 % Change
GHG Reductions Over 3,700 MT CO2e Over 6,042 MT CO2e +63% Load Shifted 0kWh Over 2.3MWh daily N/A
Heat Pump Water Heater & HVAC Units 396 units 1,146 units +189% All-Electric New Construction 460 units 302 units -34%
E-buses 18 E-buses 17 E-buses -6%
Electric Vehicles 1,108 EVs 1,008 EVs -9%
EV Chargers 819 EV Chargers 1,062 EV Chargers +30%
Ag Equipment 18 rebates 22 rebates +22%
Total Incentives Distributed $11 million $15 million +36% The electrification projects incentivized by 3CE’s Energy Programs resulted in a reduction of 6,042 metric tons of CO2e in FY 2024-25, equivalent to taking 1,409 gas-powered passenger vehicles off the road and avoiding nearly 15.4 million gas-powered miles driven, based on the average mileage for a passenger vehicle in California. Furthermore, customers load shifted 2.3MWh daily through discharging their residential batteries during peak hours of 4pm-9pm (PT). 1 3CE recognizes the need to continually enhance and refine its programs, and to expand their impact. In recognition of the need for continuous improvement of the Energy Program Portfolio’s impact, this report identifies growth opportunities to drive better outcomes related to increasing program access for 3CE’s customers. The analysis of data gathered from 3CE’s FY 2024-25 programs helps to identify future program offerings and explore innovative technologies in the renewable energy sector.

In this report, design enhancements are recommended for each of 3CE’s 11 programs to maximize electrification support of customers’ electrification journeys, and to scale the portfolio’s impact in reducing greenhouse gas emissions and promoting renewable energy use. Additionally, the report includes data from 3CE’s participation in two pilots that are actively testing new technologies and pricing models as a precursor to implementing new programs. New pilots are being recommended that are focused on agricultural electrification and energy optimization, where technologies like automation, battery storage, microgrids, and real-time-pricing have the potential to empower customers by lowering their costs and increasing their use of renewable energy. 3CE’s energy programs portfolio is leveraging diverse revenue sources including grant funding and subscription pricing models to support development of 3CE’s EV Charger Asset Pilot and exploring new resourcing opportunities and partnerships to maximize electrification accessibility to 3CE’s customers. In the coming years, 3CE plans to develop a long-term energy programs strategic plan with input from 3CE’s customers, board, and stakeholders.
3CE’s Energy Programs continue to support community resilience in a dynamic energy landscape, while striving toward 100% clean, renewable, and affordable energy.

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4 CENTRAL COAST COMMUNITY ENERGY
Central Coast Community Energy (3CE) is a Joint Powers Authority (JPA) comprised of 35 local government agencies across the jurisdictions of California’s Central Coast. These 35 agencies joined 3CE with a shared goal of gaining more control over their electricity needs to reduce greenhouse gas emissions, support the growth of clean and renewable energy, and access additional economic and environmental benefits. Currently, 3CE serves over 1.2 million residents across Monterey, San Benito, San Luis Obispo, Santa Cruz, and Santa Barbara counties.

In addition to providing clean and renewable power, managing 3CE’s Energy Programs Portfolio is a foundational component of meeting the agency’s core JPA goals. 3CE’s FY 2024-25 Energy Programs Portfolio was designed to bring meaningful decarbonization and climate action throughout 3CE’s service area via transportation, building, and agricultural electrification along with energy optimization initiatives.

This FY 2024-25 evaluation report assesses 3CE’s portfolio design, access, and impact across 3CE’s service area. The recommendations made in this report include immediate and long-term improvements to program design, implementation, and outreach. Through annual evaluation, 3CE’s programs continue to empower customers to take part in the central coast’s collective renewable energy transition.

INTRODUCTION

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2024-2025 ENERGY PROGRAMS PORTFOLIO EVALUATION
As part of 3CE’s evaluation criteria, 3CE measured progress toward ensuring access to energy programs for all customers. 3CE continues to provide enhanced support and assistance to underserved communities, which is defined in 3CE’s Underserved Communities Outreach and Engagement Plan as communities that face limited access to public investments, energy- related resources, and information. The report considers factors such as geographic location, cultural differences, socioeconomic status, health risks, the digital divide, and exposure to environmental hazards. As part of 3CE’s program impact assessment, 3CE tracks program utilization by underserved communities, specified in the following manners:
1 3CE’s FY 2024-25 Energy Programs Portfolio Evaluation assessed all programs according to four measures – Program Participation, Program Performance, Program Impact, and Internal Resources. The evaluation measures incorporated metrics from state energy reporting standards to accurately demonstrate program objectives across customers’ income levels and geographic areas. The evaluation framework aligns with broader efforts to implement energy programs that enable an accessible renewable energy transition for all 3CE customers and communities. Individual program evaluations include a program description, program goals, key performance indicators, observed successes, and observed opportunities.
5 APPROACH & METHODOLOGY
EQUITY

CRITERIA PURPOSE KEY PERFORMANCE INDICATORS
Program
Participation
Where are 3CE’s incentives
being distributed?
Average $ funded per application
% funding distributed per county
$ incentives distributed
Program
Performance
Is the program being utilized
as predicted by FY plan?
$ incentives distributed
% allocated budget utilized
Achievement of FY 2024-25 program goals
Program
Impact
Is the program making a
positive contribution to the
3CE community?
$ in all-electric purchases/support enabled
Greenhouse gas emissions avoided
% of funding distributed to underserved communities
Internal
Resources
Are 3CE resources being
used effectively?
Average days to fund a project
Conversion rate from vendors providing technical assistance % of applications approved

PROGRAM UNDERSERVED COMMUNITY DESIGNATION
Electrify Your Ride
Tier 1 — household income within 400-201% (Tier 1) Federal Poverty Level 2 Tier 2 — 200% and below federal poverty level and/or CARE/FERA enrolled E-Bus Program Title 1 School or CCI Low-income community 3 Electrify Your Home
CARE/FERA enrolled
Affordable housing projects by authority granting jurisdiction New Construction Elect. Program Affordable housing projects by authority granting jurisdiction Ag Electrification Program Small business defined in Government Code Section 14837(d)(1) 4 Residential Battery Rebate Program CARE/FERA enrolled, or Medical Baseline qualified

1. https://pub-3ce.escribemeetings.com/filestream.ashx?DocumentId=4461

2. https://aspe.hhs.gov/sites/default/files/documents/dd73d4f00d8a819d10b2fdb70d254f7b/detailed-guidelines-2025.pdf

3. https://www.caclimateinvestments.ca.gov/priority-populations

4. https://www.dgs.ca.gov/PD/Services/Page-Content/Procurement-Division-Services-List-Folder/Apply-for-or-Re-apply-as-Small-Business-Disabled-Veteran-Business-Enterprise#:~:text=In%20order%20for%20a%20small,with%2025%20or%20fewer%20employees.

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6 CENTRAL COAST COMMUNITY ENERGY
For this evaluation, GHG emissions avoided were estimated based on emissions from conventional fuel-based systems compared with the electric-based alternatives and the calculations and conversion factors found in Appendix A. In accordance with best practices, all GHG emission estimates are displayed using metric tons of carbon dioxide equivalent (CO2e) as the unit of measure.

GHG emission measurements excluded non-3CE owned EV chargers, new construction units, and residential batteries. 3CE is actively researching sources to accurately quantify emissions avoided by these sources and will include these measurements once available. GHG emission reductions and grid load reductions were conservatively estimated for the following programs:

GREENHOUSE GAS (GHG) EMISSIONS ACCOUNTING

COMMUNITY ENGAGEMENT
40 local & diverse organization memberships
180 community events hosted and/or supported
90 meetings with City & County staff
4 energy programs community workshops hosted

CUSTOMER SERVICE & EDUCATION
7 webinars and workshops focused on
programs, rates, billing, and electrification
32 Member Agency presentations
18 Farmworker outreach events

MARKETING & COMMUNICATIONS
$1.6 million dedicated
$210k dedicated to program campaigns
690 posts on social media
576K website views

PROGRAM EQUIPMENT MEASURED TYPE OF EMISSION
Electrify Your Ride Passenger Vehicles On Road Gas
E-Bus Program School & Transit buses On Road Diesel
Electrify Your Fleet Passenger Vehicles On Road Gas
EV Charger Asset Pilot Level 2 EV Charger Usage On Road Gas Electrify Your Home Heat Pump Water Heaters & HVAC units BTU Natural Gas Ag Electrification Program UTVs, compact & standard tractors Off Road Diesel Residential Battery Rebate kWh daily load shifted TBD

COMMUNICATIONS & OUTREACH
Focused outreach, marketing, and communications are critical to driving awareness and participation in Energy Programs. 3CE’s strategies to build agency awareness and promote Energy Programs include:

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3CE’s Energy Programs support 3CE’s commitment to invest in our communities to drive local economic development and reduce greenhouse gas emissions in the transportation, building, and agricultural sectors. 3CE is actively exploring opportunities to identify additional revenue streams that will allow 3CE to expand programs without impacting customer rates. Initiatives to maximize budget and diversify the portfolio’s revenue streams in FY 2024-25 included:

DIVERSIFYING REVENUE STREAMS
2024-2025 ENERGY PROGRAMS PORTFOLIO EVALUATION 7
3CE continues to evaluate additional revenue streams to cost-effectively support electrification projects for 3CE customers. 3CE is actively applying for federal and state grants to fund EV charging sites and microgrid development, refining pricing models for 3CE-owned public EV chargers, and connecting customers with low-interest financing for electrification purchases. Furthermore, 3CE is exploring virtual power plant (VPP) pilot opportunities to manage customer load. The VPP pilot would incorporate a pay-for-performance programmatic design to provide rebates during demand response events for customers who load shift with their electric thermostats, battery systems, and EV chargers.

Hourly Flex Pricing Pilot: potential reduction in procurement costs through load shifting and CPUC automation rebate funding
Residential Battery Rebate: expected reduction in procurement costs and customer bill savings through load shifting during peak hours; load shifting also results in individual customer bill savings
EV Charger Asset Pilot: approval of $268,400 in grant funding to support EV charger construction at 3CE’s San Luis Obispo office and of a public lot in Santa Maria Electrify Your Home: projected 10% administrative cost reduction through transition to in-house administration

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FY 2024-25
ENERGY

PROGRAMS

TRANSPORTATION

ELECTRIFICATION

AGRICULTURAL

ELECTRIFICATION
Supports
customers to
transition
from fossil
fuels to
electricity for
all vehicles
including
charging
infrastructure
Supports
agricultural
customers to
transition
from fossil
fuel to
electric
equipment
and
automation
options

E-BUS PROGRAM

EV CHARGER ASSET PILOT

PLAN, CHARGE, AND

ELECTRIFY YOUR FLEET

ELECTRIFY YOUR RIDE
AGRICULTURAL ELECT. PROGRAM
HOURLY FLEX PRICING PILOT 1

BUILDING

ELECTRIFICATION
ENERGY

OPTIMIZATION
Supports
customers to
transition
from fossil
fuels to
electricity for
various end
uses in new
and existing
residential
buildings
Supports grid
reliability
through
batteries and
customer load
modification
strategies
NEW CONSTRUCTION ELECT.

REACH CODES

ELECTRIFY YOUR HOME
HOURLY FLEX PRICING PILOT 2

RESIDENTIAL BATTERY REBATE
3CE’s Energy Programs Portfolio, through its multifaceted electrification efforts, promotes affordable electrification and greenhouse gas reductions. FY 2024-25 was 3CE’s fifth full year of administering and implementing energy programs. 3CE offered 11 Energy Programs and 2 pilots across the transportation electrification, building electrification, agricultural electrification, and energy optimization categories, as indicated below. The incentives available through these programs supported 3CE customers in transitioning their homes, workplaces, and transportation from fossil-fuel powered to clean-energy solutions.

ENERGY PROGRAMS OVERVIEW
FY 2024-25 ENERGY PROGRAMS PORTFOLIO
8 CENTRAL COAST COMMUNITY ENERGY

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In FY 2024-25, 3CE distributed approximately $15 million in incentives and services across 11 programs and 2 pilots, a $4.1M (38%) increase from FY 2023-24.

Table 1: Energy Programs FY 2024-25 Portfolio Metrics
*Some programs allow customers to receive multiple rebates within one application. See program’s metrics page for total rebates **Excludes 3CE funding towards technical assistance
***3CE reduced administrative costs within overall programs budget to be able to pay incentives in excess of budget FY 2024-25 ENERGY PROGRAMS HIGHLIGHTS
2024-2025 ENERGY PROGRAMS PORTFOLIO EVALUATION 9
ACHIEVEMENTS IN FY 2024-25

TRANSPORTATION BUILDING AGRICULTURE ENERGY OPTIMIZATION Incentivized 1,025 EVs and
1,062 EV chargers
Launched six, 3CE-owned
EV charging stations at
two sites
Funded 1,146 heat pump
water heater & hvac units
Supported all-electric
construction of 302
housing units, 86% of
them affordable
Incentivized 22 agricultural
projects, 90% to small
businesses
Enrolled customers in real
time pricing
Achieved 2.3MWh of load
shift daily through
residential battery discharge
Launched hourly flex pricing
pilot to test real time
pricing on energy use

PROGRAM
UNIQUE

APPLICATIONS
APPROVED*
# OF EQUITY-QUALIFIED

PROJECTS
% INCENTIVES

TO EQUITY
PROJECTS**
BUDGET
SPENT (%)

GHG IMPACT (MT
CO2e avoided)
Electrify Your Ride 1,588 416 32% 102% 4,200
E-Bus Program 8 4 47% 115% 410
Plan, Charge, and
Electrify Your Fleet
19 - N/A 28% 94
Grants - - N/A 85% N/A
Electrify Your Home 944 696 59% 527% 1,156
New Construction Elect. 44 261 73% 91% N/A
Reach Codes 3 - N/A 106% N/A
Agricultural Elect.

Program
20 20 96% 81% 182
Residential Battery
Rebate
243 35 20% 81% 2.3MWh load shift daily
Pilots - - N/A 20% .2
TOTAL 2,869 1,432 42% 102%*** 6,042

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E-BUS

PROGRAM
Incentives for
all-electric buses
in public schools
& districts,
public and
farmworker
transit agencies
Budget: $1.4M

EV CHARGER

ASSET PILOT
Construction of
3CE-owned
workplace and
public EV
chargers
Budget: $700k

PLAN, CHARGE,

AND ELECTRIFY

YOUR FLEET
Incentives and
technical
assistance for zero
emission fleet
planning and
implementation
Budget: $2.8M

ELECTRIFY

YOUR RIDE
Residential &
commercial
incentives for
electric vehicles
and charger
installations
Budget: $4.2M
GRANTS
Grants for
planning,
implementation,
and innovation
projects in
electrification &
energy
Budget: $735k

PROGRAM DESIGN IMPROVEMENT
EV Charger Asset Pilot
Awarded $268k in grants towards EV charger projects in San Luis Obispo and Santa Maria
EVs EV Chargers

FISCAL YEAR
T
O
TA
L
R
E
B
AT
E
S
2021-2022 2022-2023 2023-2024 2024-2025
400
500
600
700
800
900
1000
1100
1200
Over 4,704 MT CO2e avoided in FY 2024-25
Equivalent to 1,097 gas powered vehicles driven for one year Program Design Improvements Implemented in FY 2024-25

TRANSPORTATION ELECTRIFICATION

EQUIPMENT INCENTIVIZED
10 CENTRAL COAST COMMUNITY ENERGY
Approximately 200% increase in participation over three years

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Santa Cruz County
San Benito County
Monterey County
SLO County
Santa Barbara
County
22 5 11
0-0.5%
1-1.5%
2%
Participation
Monterey County
San Luis Obispo County
Santa Barbara County
San Benito County
Santa Cruz County
Incentivize 650 EVs and 475 EV Chargers
Distribute 40% of incentives to income-qualified
customers
in incentives distributed

PERFORMANCE
GOALS
$4.2M
“I must say, we are truly enjoying having an electric car!... thanks to the rebate from you, I now feel above water can stop stressing and just enjoy going electric!”
Figure 1.2: % participation of total active
residential meters, per zip
Monterey County
San Luis Obispo County
Santa Barbara County
San Benito County
Santa Cruz County
IMPACT
in all-electric purchases enabled
Figure 1.3: All-electric purchases enabled by equipment type MT CO2e avoided in FY 2024-25
incentives distributed to income qualified applicants
Figure 1.4: % of income-qualified rebates by county
Nonresidential customers engaged
in technical assistance
4,200
22 Residential & commercial incentives for electric vehicles, chargers, and infrastructure upgrades

1. ELECTRIFY YOUR RIDE
- Mrs. Ferell, 3CE Residential Customer
2024-2025 ENERGY PROGRAMS PORTFOLIO EVALUATION 11

KEY TAKEAWAYS
Success in FY 2024-25: For the first time in agency history, 3CE program incentive budget fully distributed to customers
Opportunity in FY 2025-26: Increase equitable access and offering to income-qualified customers through enhanced outreach and updated rebate structure.

PARTICIPATION
2,768 Total equipment & assistance approved across
1,588 customers in 3CE service area
Figure 1.1: Unique applications by County
Application
Received
Final Docs
Received
Submitted for
Payment
Paid

INTERNAL
38 Average days to fund project

CRITERIA
$47M
32%

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85 7 2
2024-2025 ENERGY PROGRAMS PORTFOLIO EVALUATION 11
Santa Barbara
SLO
Monterey
San
Benito
Santa Cruz
57%
53%
100%
100%
0%

PERFORMANCE
GOALS
“The E-Bus application process was straightforward, and the support we received throughout was excellent. For those concerned about the initial investment of electrification, this program provides a practical pathway to sustainable fleet management." IMPACT
Incentives distributed to
disadvantaged communities
- Aromas-San Juan Unified School District

KEY TAKEAWAYS
Success in FY 2024-25: Nearly 50% of incentivized buses were from transit agencies due to design changes which expanded eligibility to fleets
Opportunity in FY 2025-26: Increase equitable access through enhanced outreach to schools/ transit agencies in low-income areas.

PARTICIPATION
Application
Received
Final Docs
Received
Submitted for
Payment
Paid

INTERNAL
94 Average days to fund project

CRITERIA
Incentives for all-electric buses in public schools, school districts, farmworker transit orgs, and public transit agencies

2.E-BUS PROGRAM
Incentivize 16 Electric Buses
Incentivize at least five electric buses serving a Title 1 school or low-income community.
$1.6M in incentives distributed
Figure 2.1: Applications by County
6 school districts & 2 transit agencies across 5 counties Monterey County
San Luis Obispo County
Santa Barbara County
San Benito County
Santa Cruz County
0%
100%
Funding to low income/Title 1
School
Figure 2.2:% of funding to low income/Title 1 School per county 47%
$14M in all-electric purchases enabled
FIgure 2.3: Quantity of e-buses rebated, by type
MT CO2e avoided in FY 2024-25,
equal to taking 17 Type A diesel
buses off the road for one year
Average purchase cost incentivized
410
35%
12 CENTRAL COAST COMMUNITY ENERGY

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CRITERIA

INTERNAL
43% PYF participants also participated in EYF and/or CYF IMPACT
Paid Fleet
Replacement
Plan
Charging
Infrastructure
Plan
EV Charging
Site Design
14 85 60 20
Application
Received /
Start PYF

PARTICIPATION
City of Santa Cruz
City of Capitola
1 3
Sand City
City of Soledad
City of Monterey
City of Salinas
City of SLO
SLO County
City of Guadalupe City of Santa Maria
City of Goleta
Santa Barbara County
12 cities and counties engaged across 3CE service area
Program Engagements
Figure 3.1: Cities and counties engaged in fleet electrification

PERFORMANCE
GOALS
Deliver technical assistance service to a
minimum of 10 Member Agencies
Incentivize 25 electric vehicles
Fund at least one project within a low income
or disadvantaged community
Incentivize 100 L2 chargers
Incentivize 5 DC fast chargers
Fund at least 1 publicly available project
$160k To support fleet planning
$300k To support EV charger purchases
$321k To support electric vehicle purchases
All-electric purchases enabled
EV charging capacity installed

2.4M
900kW
Figure 3.2: Equipment rebated
2024-2025 ENERGY PROGRAMS PORTFOLIO EVALUATION 13
PLAN (PYF):

Technical assistance for zero
emission fleet planning
CHARGE (CYF):

Incentives for purchase and
installation of EV chargers
ELECTRIFY (EYF):

Incentives for purchase of light,
medium, and heavy duty vehicles

KEY TAKEAWAYS
Success in FY 2024-25: Over 45% of all 3CE member agencies participated in programs since launch; most unique engagements in FY 24-25.

Opportunity in FY 2025-26: Increase participation in Electrify and Charge Your Fleet programs through funding cap flexibility and understanding of agency budgeting timelines.

3. PLAN CHARGE AND ELECTRIFY YOUR FLEET
“3CE staff and programs have been key contributors to the City of Santa Cruz’s efforts to electrify our fleet... 3CE funding was instrumental in the procurement of an all-electric garbage truck, DC Fast Charging for our fleet, and EV Chargers at our parking garages and public libraries. I am extremely grateful because, without 3CE's support, several of our projects would have never happened." -Andy Shatney, Energy Project Coordinator, City of Santa Cruz

Page 102 of 132 ends

Grant
Recipient/
Project
Partner
Grant
Purpose
Approval
Date
Grant
Status
Center for
Sustainable
Energy
California Vehicle
Infrastructure
Project - Central
Coast Incentive
5/10/2019
Completed
9/30/2025
Center for
Sustainable
Energy
California Vehicle
Infrastructure
Project - South
Central Coast
Incentive
6/30/2021
Completed
9/30/2025
City of
Watsonville
Development of
an EV
masterplan with
building
electrification
analysis
9/28/2022
Active until
6/30/2026
County of
Monterey
Development of a
holistic, County-wide deep
decarbonization
framework to
electrify Monterey
County facilities
10/6/2022
Active until
12/31/2025

PERFORMANCE
in grants distributed to support EV charging
infrastructure across central coast $626k
IMPACT
ports across
18 DC Fast
Chargers
funded
ports across 23
L2 Chargers
funded
31 36
Allocation to public agencies and nonprofits to plan, innovate, and implement new electrification

KEY TAKEAWAYS
Success in FY 2024-25: Grant partnerships with external agencies helped to expand DCFC EV charger deployment in 3CE service area.

Opportunity in FY 2025-26: Timelines to complete grants frequently extended. With grant program ending 2026, opportunity to evaluate comprehensive impact of previously funded grant plans.

PARTICIPATION

INTERNAL

5.4 years to complete average grant project

CRITERIA

4.ELECTRIFICATION GRANTS
Table 3: Active and Completed Grants in FY 2024-25
Grant
Approval
Grant
Completion
Grant
Approval
FY end
3 years of ongoing support for grants still active
14 CENTRAL COAST COMMUNITY ENERGY

Page 103 of 132 ends

PERFORMANCE
GOALS
“Having access to Level 2 charging at work saves me time and money, and it shows 3CE’s real commitment to reducing emissions and supporting EV-driving employees.”
IMPACT
- Jeff Railsback, Customer Accounts Manager, 3CE

KEY TAKEAWAYS
Success in FY 2024-25: Deployed workplace EV charging at 3CE offices, optimizing for off-peak renewable energy use and establishing internal end-to-end project management capability.

Opportunity in FY 2025-26: Establish access and pricing policies, standardize designs from lessons learned, and scale to future public deployments.

PARTICIPATION

INTERNAL

CRITERIA
98% Average charger uptime
2024-2025 ENERGY PROGRAMS PORTFOLIO EVALUATION 15
Construction of 3CE-owned workplace and public EV chargers

5. EV CHARGER ASSET PILOT
Launch 3CE-owned EVSEs at one-two pilot sites
in 3CE service area
Figure 5.1: 3CE EV Charging Station Location Map
Figure 5.3: Monthly Average
Uptime

0.2 54 Charging sessions
Figure 5.4: Charging
Sessions/Month
EV Adoption Rate by Staff:
71% SLO Office
57% Soquel Office
MT of CO2e avoided
in first two months - comparable to
planting 60 trees grown for 10 years
Figure 5.5: Energy Dispensed/Month
Grants Awarded from local
Air Pollution Control Districts:
$68,400 for workplace charging in San Luis Obispo
$200,000 for public charging in Santa Maria Figure 5.2: 3CE EV charging Asset Pilot Project Timeline

Page 104 of 132 ends

ELECTRIFY

YOUR HOME
Incentives for
replacement of
gas appliances
with electric heat
pump appliances
for residential and
multifamily
projects
Budget: $800k
NEW

CONSTRUCTION
ELECT.

Incentives for
development of
all-electric
residential, multi-family, and
agricultural
housing
Budget: $1M

REACH CODES
Technical
assistance for
cities and
counties
to adopt and
codify reach
codes that
promote
electrification
Budget: $150k

PROGRAM DESIGN IMPROVEMENT

ELECTRIFY YOUR HOME
Transitioned rebate checks to be sent from 3CE directly to contractor; reduced customer wait time by 2 weeks
Hosted community workshops to gather feedback on opportunities to support building electrification
REACH CODES Expanded technical support to assist with code updates & education Water Heaters HVAC

FISCAL YEAR
T
O
TA
L
R
E
B
AT
E
S
2021-20222022-2023
2023-2024
2024-2025
0 200
400
600
800
1000

NEW CONSTRUCTION UNITS

FISCAL YEAR
T
O
TA
L
R
E
B
AT
E
S
2022-2023 2023-2024 2024-2025
0 100
200
300
400
500
16 CENTRAL COAST COMMUNITY ENERGY
Over 1,156 MT CO2e avoided in FY 2024-25
Equivalent to powering 155 homes for a year

BUILDING ELECTRIFICATION
Program Design Improvements Implemented in FY 2024-25

HEAT PUMP REBATES DISTRIBUTED ALL-ELECTRIC HOUSING FUNDED

Page 105 of 132 ends

Santa Barbara County
Monterey County
San Luis Obispo County
Santa Cruz County
San Benito County
Figure 6.2: Count of heat pumps incentivized, by zip code 93434
93458
93454
93455
Santa Cruz County
San Benito County
Monterey County
SLO County
Santa Barbara County
63 81% total applications were eligible and received a rebate

PERFORMANCE
GOALS
“...We are happily creating electricity through our solar panels, charging and driving our new EV, and enjoying a warm house for the first time. This was all made possible thanks to 3CE, 3C-REN, and the state of California...it feels good doing our part to reduce pollution and reduce our carbon footprint in the fight against climate change.” IMPACT
of installed units for income-qualified applicants
-Carter and Wendy Morgan, 3CE residential customers

KEY TAKEAWAYS
Success in FY 2024-25: Program saw over 200% increase in the number of applications paid.

Opportunity in FY 2025-26: Due to budget limitations, the program was paused in July.

PARTICIPATION

INTERNAL
Average days to fund project

CRITERIA
60%
$3.9M in incentives distributed
2024-2025 ENERGY PROGRAMS PORTFOLIO EVALUATION 17
Incentives for replacement of gas appliances with electric heat pump appliances

6. ELECTRIFY YOUR HOME
944 applications approved across 3CE service area
Figure 6.1: # Applications by County
Heat pump count
5 150+
Fund 250 cumulative heat pump water heaters and
heat pump HVAC electrification projects
Support 10 projects at income-qualified project sites
Support at least three multifamily projects
in all-electric purchases enabled
1,100 MT CO2e avoided in FY 2024-25
$12M
Figure 6.3: Heat Pump Purchases Incentivized
Figure 6.4: Income Qualified Units by County
45 local contractors engaged
Figure 6.5: Unsuccessful Applications

Page 106 of 132 ends

Application
Received
18 9 4
Final Docs
Received
Submitted for
Payment
Paid
152
1 Number of units
incentivized
San Luis Obispo County
Santa Cruz County
Monterey County
Santa Barbara County
302 All-electric units incentivized including
261 Affordable housing units
Average days 31 to fund project

PERFORMANCE
GOALS
“With HASLO’s overarching mission to provide housing for all, the objective to create housing that reduces greenhouse gas emissions, improves the health of residents, and furthers clean energy technologies. Partnering with 3CE on Sunset Terrace in Pismo Beach gave us the flexibility to explore options to achieve these objectives and create a more resilient community.” - Michael B Burke, Director of Construction and Development, Housing Authority of San Luis Obispo

KEY TAKEAWAYS
Success in FY 2024-25: 72% of funds distributed to affordable housing projects in FY 2024-25.

Opportunity in FY 2025-26: Reach out to developers to discuss support opportunities through long timelines.

PARTICIPATION

INTERNAL

CRITERIA
$912k in incentives distributed
Incentives for new, all-electric residential construction

7. NEW CONSTRUCTION ELECTRIFICATION
18 CENTRAL COAST COMMUNITY ENERGY
Figure 7.1: # Applications by County
44 applications approved across 3CE service area
Figure 7.2: Total number of units incentivized, by zip code Support 200 new, all-electric affordable housing units
Support one or more farmworker housing projects
Support projects in all 5 counties
IMPACT
Figure 7.3: Units Incentivized by County
Figure 7.4: $ Incentivized by Type
21 Local contractors engaged
Applications were
eligible and received a
rebate
85%
Figure 7.5: Rejection Reason
San Benito County

Page 107 of 132 ends

Interest in
code
170 241
*

PERFORMANCE
GOALS
IMPACT
2024-2025 ENERGY PROGRAMS PORTFOLIO EVALUATION

KEY TAKEAWAYS
Success in FY 2024-25: Achieved consistent code updating and adoption among participants.

Opportunity in FY 2025-26: Find new code options and support agencies in the face of legislative changes.

PARTICIPATION
Code passes second
reading & is implemented
Code readopted or state
code meets requirements

INTERNAL

CRITERIA
Program funds distributed for adopting, updating,
and implementing codes $160k
Technical assistance for Member Agencies to adopt and codify building codes that go beyond state requirements to promote building electrification and EV infrastructure

8. REACH CODES
19 Provide support for at least 1 new reach code type
Support reach code adoption for 6 member agencies
5 Reach Codes updated or adopted by 3 member agencies
Figure 8.1: Number of code efforts across agencies
Nonresidential:

Property owners follow
energy efficiency
measures or install heat
pump technology at time
of replacement
New Construction:

Flexible menu of energy
efficiency, electrification,
and electric readiness
requirements for new
buildings
Existing Buildings:

Flexible menu of energy
efficiency, electrification,
and electric readiness
requirements for major
renovations
Single-FamilyMulti-Family
Figure 8.2: Description of each reach code type
New Construction
Existing Buildings-Single Family
*2-Way AC and Existing Buildings- Multi Family in
development for FY 25-26
Figure 8.3: Number of code efforts by code type
310 Permits impacted per year
2 New reach code types in development

Page 108 of 132 ends

AGRICULTURAL
ELECT. PROGRAM
Rebates for all-electric, agricultural
equipment for
business in or
directly
supporting the
agriculture industry
Budget: $800k

HOURLY FLEX
PRICING PILOT 1*
Real time pricing and
pumping automation
rebates for
agricultural meters
Budget: $100k

PROGRAM DESIGN IMPROVEMENT

AG ELECTRIFICATION

PROGRAM
Redefined equipment funding tiers with consideration of GHG avoidance potential and barriers to entry
Clarified definition of eligible businesses to include food systems and businesses on an ag rate
Ag Equipment

FISCAL YEAR
T
O
TA
L
R
E
B
AT
E
S
2020-2021
2021-20222022-2023
2023-2024
2024-2025
0 5
10 15
20 25
30 35
40 Over 182 MT CO2e avoided in FY 2024-25

AGRICULTURAL ELECTRIFICATION
Program Design Improvements Implemented in FY 2024-25
*See Energy Optimization section for metrics relating to Hourly Flex Pricing Pilot

AG REBATES DISTRIBUTED
20 CENTRAL COAST COMMUNITY ENERGY

Page 109 of 132 ends

Paid
91%
31 6 9
San Benito County
Monterey County
SLO County
Santa Barbara County
Santa Cruz County
1 Forklift
4 Harvest
Pieces
2 Irrigation
Pumps
13 Tractors
(Standard/
Compact)
2 Other
Electric
Items

PERFORMANCE
GOALS
“The support we received from 3CE allowed us to purchase a fully electric excavator to help trench new irrigation lines to support our expansion efforts. This is a critical part of our growth. Without the Ag program, we would have struggled to maintain our farm, let alone expand it."
IMPACT
- Our Parent Company, Watsonville
2024-2025 ENERGY PROGRAMS PORTFOLIO EVALUATION

KEY TAKEAWAYS
Success in FY 2024-25: Over 90% small business participation supported both large & small equipment purchases.

Opportunity in FY 2025-26: Low overall program participation indicates a need to redesign the program to maximize GHG reduction potential.

PARTICIPATION
Application
Received
Final Docs
Received
Submitted for
Payment

INTERNAL

CRITERIA
$646k in incentives distributed
Incentives for the purchase of all-electric agricultural equipment

9. AG ELECTRIFICATION PROGRAM
21 Incentivize at least 13 projects
Provide at least 50% of funding to small businesses
Support at least one DC Fast Charger project
20 customers supported across 22 equipment purchases
Monterey County
San Luis Obispo County
Santa Barbara County
San Benito County
Santa Cruz County
Figure 9.1: % applications by County
601
3500
Ag meter
count:

Figure 9.2. Top zip codes receiving 3CE funding
across ag meter density count
All-electric purchases enabled
MT CO2e avoided in FY 2024-25, equal to taking
12 diesel tractors off the fields for one year
incentives distributed to small businesses
182
$1.7M
Figure 9.4. Equipment types funded
Not a small business
Figure 9.5. Small business total, by county
Monterey County
San Luis Obispo County
Santa Barbara County
San Benito County
Santa Cruz County
Average days 46 to fund projectApplications were eligible 45% and received a rebate Project Complete
Awaiting Purchase
Incomplete
Denied: Opt-Out
Denied: Ineligible
Purchase Date
Figure 9.3. Applications per status

Page 110 of 132 ends

RESIDENTIAL

BATTERY REBATE
Rebates to install
residential, behind-the-meter battery
storage systems and
discharge during
peak hours
Budget: $2M

HOURLY FLEX
PRICING PILOT 2
Real time pricing and
automated load
shifting for
residential and
commercial meters
Budget: $100k

PROGRAM DESIGN IMPROVEMENT

RESIDENTIAL BATTERY
REBATE
Expanded program to allow leased battery systems, developed automated load shifting via scheduling

HOURLY FLEX PRICING
PILOT 2 Created enrolled customer guides to enable smoother load shifting set up MONTH
k
W
h
o
f lo
a
d
s
hift
e
d
d
aily
(
4 -
9 P
M
P
T
)
FY 23-24 Total
Oct
'24
Nov
'24
Dec
'24
Jan
'25
Feb
'25
Mar
'25
Apr
'25
May
'25
Jun
'25
Jul
'25
Aug
'25
Sep
'25
0 500
1000
1500
2000
2500
Over 2.3 MWh of load shifted daily during 4-9 PM peak hours

ENERGY OPTIMIZATION
Program Design Improvements Implemented in FY 2024-25

LOAD SHIFTED DAILY DURING PEAK PERIOD
2,354 kWh (2.3 MWh)
90 22 CENTRAL COAST COMMUNITY ENERGY

Page 111 of 132 ends

93446
93401
93420
93 11 9

CARE/FERA
NBT Switch
Standard
Medical Baseline
Monterey County
San Luis Obispo County
Santa Barbara County
San Benito County
Santa Cruz County

PERFORMANCE
GOALS
“I’m excited to be able to support myself and others with cleaner energy, and I am so very happy about getting my batteries! Thanks 3CE, for all the help."
IMPACT
incentives distributed to income qualified applicants
- Jessica Hanson, 3CE Residential Customer, Santa Cruz
2024-2025 ENERGY PROGRAMS PORTFOLIO EVALUATION

KEY TAKEAWAYS
Success in FY 2024-25: 200% increase in applications received; over 2.3 MWh of load shifted daily during peak hours.

Opportunity in FY 2025-26: Improve customer understanding of program requirements and benefits through increased communication and contractor outreach.

PARTICIPATION

INTERNAL

CRITERIA
32%
$1.6M in incentives distributed
Incentives to install residential, behind-the-meter battery storage systems

10. RESIDENTIAL BATTERY REBATE
Incentivize 400 battery systems
Distribute 15% of incentives to CARE/FERA or
medical baseline customers
Figure 10.1: % Applications by county
243 applications approved across 3CE service area
Figure 10.2: Total battery capacity installed, per zip code Battery capacity (kWh)
Indicates a zip
code with over
300kWh of
added capacity
5 613
23 Application
Received
Final Docs
Received
Submitted for
Payment
Paid
113 Average days to fund project
97% Manufacturer types supported on load shift tracking platform Figure 10.4: Applicants connected to load tracking
10 Unique battery manufacturer types rebated
23% Total project cost supported, on average
52 local contractors engaged

2.3MWh Load shifted daily during peak hours
Figure 10.3: Applications rebated by applicant type

Page 112 of 132 ends

Agricultural
Commercial
Residential

INTERNAL
average days
to complete
application
43 Figure 11.3: All received applications, by status
Top reasons for ineligible /waitlist:
23% already enrolled in a demand-response program
10% Net Energy Metering customers

PERFORMANCE
GOALS

KEY TAKEAWAYS
Success in FY 2024-25: Over 16 GWh of enrolled annual load across all three customer classes within first year of the three year pilot, with majority participation from commercial meters.

Opportunity in FY 2025-26: Low to no savings for residential and agricultural meters to date; Encourage enrollment with automated service providers to better optimize load flex & energy savings

PARTICIPATION

CRITERIA

11. HOURLY FLEX PRICING PILOT 1 & 2
Dynamic pricing for eligible agricultural, residential, and commercial customers to enable load flex 3-year pilot in partnership with PG&E
24 CENTRAL COAST COMMUNITY ENERGY
Enroll at least three customers in first three months
with potential show of irrigation pump load flex
Achieve load shifting capacity of approximately 3-
5MW at the end of the 3-year pilot
Enrolled Load (GWh) Target Enrolled Load (GWh)
Figure 11.4: % ratio of total enrolled annual load
compared to target load (GWh)
Agricultural $88
Commercial $138,066
Residential $(254)
Total $137,900
IMPACT
Table 11.1: Total customer credits, by
customer segment (Feb-Sept 2025)*
*Subject to change
*combination of 3CE (generation) & PG&E (T&D) bill credits 69 enrolled meters across 27 unique customers
Figure 11.1: % Applications by County
Enrolled with an ASP
Not enrolled with an ASP
Figure 11.2: % of enrolled customers enrolled with an
Automated Service Provider (ASP)
Ineligible
Enrolled
Unerolled
Waitlist
Cancelled

Page 113 of 132 ends

2024-2025 ENERGY PROGRAMS PORTFOLIO EVALUATION 25

FINDINGS & RECOMMENDATIONS
In FY 2024-25, 3CE distributed approximately $15 million in incentives and support across its service area, a $4 million increase from the previous fiscal year. For the first time in agency history, 3CE’s energy programs portfolio maximized budget and participation, leading to over 6,042 MT CO2e avoided, and 2.3 MWh load shifted daily. Preliminary findings and recommendations from the data collected for this portfolio evaluation show a continued need to expand access to the portfolio’s offerings for all customer types, to increase information and education to customers considering electrification projects, and to develop pathways for customers to optimize their individual energy usage to lower cost and maximize use of renewable energy resources.

PARTICIPATION
Equal Accessibility: While programs served over 2,869 unique applicants across five counties, participation remains concentrated in urbanized areas of Monterey, Santa Cruz, and San Luis Obispo counties. Overall participation is growing, but there is a continued need for education and outreach across 3CE’s rural and unincorporated service area to improve accessibility for customers.

Member Agency Engagement: Over 45% of Member Agencies have now engaged with 3CE's energy programs. Ten Member Agencies participated in Plan Your Fleet in FY 2024-25, though only 43% of past participants report partial completion, which may be due to long procurement timelines, budgetary restrictions and lack of technical support.

Future initiatives should focus on developing comprehensive support in fleet transition and charging infrastructure development, including RFP and procurement support.

PERFORMANCE
Budget Utilization: 3CE distributed the total Energy Programs incentive budget for fiscal year 2024-25, a 40% increase from the prior fiscal year. Several programs exceeded budget expectations:

Electrify Your Ride
E-bus Program
Electrify Your Home
Reach Codes Program
3CE continues to refine programmatic design to maximize support for customers pursuing electrification projects.

Portfolio Goals Achievements:

Transportation: Incentivized over 1,025 EVs and 1,062 chargers; launched six 3CE-owned EV charging stations Building: Funded over 1,146 heat pump water heater and HVAC units; supported 302 all-electric housing units (86% affordable housing)
Agriculture: Incentivized 22 ag projects (90% to small businesses); engaged Ag customers with real-time pricing Energy Optimization: Achieved 2.3 MWh of daily load shifting through residential battery discharge.

Active development of new programs to support customers at various stages of electrifying.

IMPACT
Equity Distribution: 42% of incentive budget went to equity-qualified projects, a 17% increase from the prior year. This included:
73% of New Construction funding for affordable housing
96% of Ag Electrification funds to small businesses
60% of Electrify Your Home participants were income-qualified (up from 6% prior year) The Residential Battery Rebate Program requires additional communication and technical support for participants.

Environmental Impact: The portfolio avoided over 6,042 MT CO2e in FY 2024-25—equivalent to:

Taking 1,409 gas-powered passenger vehicles off the road Avoiding nearly 15.4 million gas-powered miles driven
1,259 homes' electricity use for one year
Economic Impact: Over 118 local contractors and developers engaged with 3CE customers to complete over $77 million in electrification projects and purchases.

INTERNAL RESOURCES
Processing Efficiency: On average, customers received rebates within 16 days after submitting final documents for active programs. However, customers take an average of 42 days to submit documents, suggesting opportunities to streamline the application process through website updates, automated reminders, and enhanced customer service.

Page 114 of 132 ends

Enhance program design and
increase outreach to maximize
accessibility for 3CE’s
underserved communities
Develop comprehensive EV and
EV charger technical assistance to
provide continuous support for
customers from electrification
planning to project completion
Improve EV charger access
through EV Charger Asset Pilot
that includes 3CE-owned and
operated workplace and publicly
accessible charging
3CE's transportation electrification programs reduced over 4,704 MT CO2e through incentivizing 1,025 EVs and 1,062 EV chargers. Electrify Your Ride supported over $47 million in purchases across the central coast, with about a third of funds distributed to income-qualified customers. In FY 2024-25, the program received its highest participation since launch, supporting 1,588 unique customers across all five counties, consistent with EVs representing up to 29% of new car sales in California. 3CE's bilingual marketing encouraged customers to capitalize on federal tax credits before they sun-setted in September 2025. Continued growth is expected in FY 2025-26, with targeted outreach to San Benito, Monterey, and Santa Barbara counties, which had lowest participation.
1 The E-bus Program supported 17 E-bus purchases across six school districts and two transit agencies, allowing customers to assign rebates directly to manufacturers to reduce upfront costs.

Electrify Your Ride concierge service supported over 22 commercial, multifamily, and agricultural customers in EV charger planning. Plan, Charge, and Electrify Your Fleet supported 12 cities and counties, with 43% completing electrification projects. Many agencies have multi-year implementation plans due to long procurement timelines, limitations in resources, and changing regulations, which we hope to shorten through launch of comprehensive technical assistance for all nonresidential customers.

Along with technical assistance, 3CE is addressing the existing gaps in publicly accessible and workplace charging availability across the central coast through 3CE’s EV Charger Asset Pilot. Launched in FY 2024-25, the pilot completed installation of six Level 2 chargers at 3CE’s San Luis Obispo and Soquel offices, with a public EV charging project planned in Santa Maria in FY 2025-26. EV charger availability has doubled EV adoption across the agency’s staff, reinforcing the value of accessible workplace charging. Data collected from the pilot should inform a potential EV charger masterplan supporting California's goal of installing two million charging stations by 2035. 2 TRANSPORTATION ELECTRIFICATION
LOOKING AHEAD...
26 CENTRAL COAST COMMUNITY ENERGY

1.https://www.epa.gov/energy/greenhouse-gas-equivalencies-calculator

2.Electric Vehicle Charging Infrastructure Assessment - AB 2127 Electrify Your Ride
Electric Bus
Plan, Charge, and Electrify Your Fleet
Transportation Grants
EV Charger Asset Pilot
Electrify Your Ride
EV Charger Asset Program
Publix Agency Fleet Elect.

Page 115 of 132 ends

Develop virtual home
assessments pilot

BUILDING ELECTRIFICATION
2024-2025 ENERGY PROGRAMS PORTFOLIO EVALUATION 27
Electrify Your Home saw over 200% participation growth, supporting 944 heat pump water heaters and 204 heat pump HVAC purchases. Income-qualified participation grew to 60% in FY 2024-25 from 6% the prior year. Due to overwhelming demand, the program paused new applications in July 2025, relaunching with expanded eligibility for purchases made in 2025.
3CE transitioned to delivering rebates in-house, enabling faster processing and funding stability. A year-long Community Advisory Council review began in October 2024, including four community workshops to gather feedback from contractors, builders, and customers. This informed Electrify Your Home V2.0, featuring expanded offerings such as contractor eligibility, new induction cooktop rebates and renter participation through portable space conditioners. A home assessment pilot is currently under development to provide comprehensive assistance to customers planning home electrification projects, including personalized information about home electrification options, costs, and resources.

The New Construction Electrification Program distributed over $1 million for 261 all-electric housing units, although participation decreased 31% compared to prior year, indicating need for improved outreach on all-electric housing benefits. 3CE is actively pursuing opportunities for feedback from housing developers, county planning departments, and key agricultural stakeholders, to gain visibility into the housing landscape, development timelines, and barriers to electrification to inform program design improvements that encourage all-electric housing adoption. 3CE’s Reach Codes Program achieved high participation this fiscal year; however, newly introduced statewide legislation led to restrictions in the adoption of state and county reach codes. 3CE continues to monitor court challenges to residential electrification building codes and will extend its support for code updates and education.

Launch Electrify Your Home V2.0
in house with expanded contractor
eligibility, additional rebates, and
customer support
Engage with housing developers,
county planning departments, and
key agricultural stakeholders to
support new all-electric housing
developments
LOOKING AHEAD...

Electrify Your Home
New Construction Elect.

Reach Codes
Electrify Your Home V2.0
New Construction Elect.

Reach Codes

Page 116 of 132 ends

Facilitate enrollment in Hourly Flex
Pricing Pilot to enable cost
savings and load away from peak
hours
Review Ag Electrification program
through customer feedback and
research on ag electrification
opportunities, informing an
improved Ag Electrification V2.0
Continue outreach and education
for ag customers around benefits
of electrification and the emerging
technologies
LOOKING AHEAD...

AGRICULTURAL ELECTRIFICATION
28 CENTRAL COAST COMMUNITY ENERGY
The Ag Electrification Program provided 22 rebates supporting $1.7 million in all-electric purchases, distributing 46% more funds than the prior year. The program was adjusted to support food system businesses and those on ag rates, with recategorized equipment incentives aligned to GHG avoidance and upfront costs. Despite growing momentum in electric ag machinery (anticipated to grow 12% between 2026-2033) we see untapped opportunities to engage agricultural customers in electrification, as they represent over 16% of 3CE’s total load demand. Barriers include grid access challenges, high costs, lack of regulatory enforcement, and reliability concerns. 1 In collaboration with the Community Advisory Council, Ag Electrification V2.0 outreach began in October 2025 with the aim of improving program design. Feedback will inform potential elements like rebates for emerging technologies, technical assistance, and demonstrative electric-farm case studies. The current small-business requirement for enhanced incentives will also be re-examined to reduce the burden of proof for growers and consider different crop type cost-yield ratios.

The Hourly Flex Pricing Expanded Pilot encouraged agricultural customers to shift operations away from hours with high grid demand through access to real time pricing and hourly forecasts. This three-year pilot is implemented in partnership with PG&E, and Polaris, the largest developer of agricultural demand response projects in California. In its first year, customers enrolled 4.1 GWh load across 7 meters, meeting 44% of 3CE's target. No customers utilized the automation rebate, possibly due to limited education and vendor opportunities. 3CE continues advocating for improved education and data access to evaluate pilot impact.

1.https://www.verifiedmarketreports.com/product/electrification-of-agricultural-machinery-market/ Ag. Electrification Program
Hourly Flex Pricing Pilot 1
Ag. Electrification V2.0
Ag. Automation Pilot
Hourly Flex Pricing Pilot 1

Page 117 of 132 ends

Facilitate enrollment in Hourly Flex
Pricing Pilot to enable cost
savings and load shifting of
operations during peak times
Scale customer load shifting
through active control of EV
chargers, battery systems, and
thermostats
Enhance energy resiliency through
a grid-connected microgrid at
critical public facilities across
3CE’s service area
LOOKING AHEAD...
3CE’s Residential Battery Rebate Program completed its first full year of operation and supported over 243 customers in the adoption of residential battery storage systems. 3CE introduced multiple program enhancements to improve program accessibility and the application process. These improvements included expanding the program to allow leased battery systems, providing an installer toolkit, and launching an opt-in scheduling service for customers’ daily battery discharge. As a result, the program contributes to over 2.3MWh of load shift daily during the peak hours of 4pm-9pm.

As customers’ adoption of electrification technologies accelerates, 3CE sees opportunities to scale the program’s impact through a distributed energy resource management system (DERMS) pilot that will optimize grid operations and customer benefits through active control. Along with residential batteries, the DERMS would include active control of additional electrification assets such as thermostats and EV chargers to form a virtual power plant (VPP) that would provide real-time visibility into grid conditions and centralized coordination through demand response capabilities. 3CE’s residential and commercial customers have also engaged in the Hourly Flex Pricing Pilot (HFP) Expanded Pilot, administered in partnership with PG&E. Similarly to HFP for agricultural customers, this pilot provides dynamic pricing signals for eligible customers to enable load optimization and potential bill savings. While the first year of the hourly Flex Pricing pilot resulted in over $137k in total customer bill savings, savings can be enhanced through greater participation in automation services, requiring additional customer education and outreach. 3CE continues to develop energy optimization resources for reducing cost and maximizing renewable energy. These include introducing a bi-directional charging rebate as part of the Electrify Your Ride program and a Microgrid pilot that can utilize battery storage and behind the meter distributed energy resources (DERs) to enhance energy resiliency, reduce utility costs, and support a transition to 100% renewable energy.

ENERGY OPTIMIZATION
2024-2025 ENERGY PROGRAMS PORTFOLIO EVALUATION 29
Residential Battery Rebate
Hourly Flex Pricing Pilot 2
Virtual Power Plant Pilot
Microgrid Pilot
Hourly Flex Pricing Pilot 2

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FOCUS IN 2025-26

LOOKING AHEAD & CONCLUSION
30 CENTRAL COAST COMMUNITY ENERGY

TRANSPORTATION
Improve programs’ design, education, & outreach to maximize accessibility for 3CE’s underserved communities Develop comprehensive EV and EV charger technical assistance from electrification planning to project completion Improve EV charger access through EV Charger Asset Pilot that includes 3CE-owned workplace and public charging

BUILDING
Bring Electrify Your Home administration in house with expanded contractor eligibility, and additional rebates Develop virtual home assessments pilot
Engage with housing developers and county planning departments to support new, all-electric housing developments

AGRICLUTURAL
Review Ag Electrification program with community advisory council and gather customer feedback to improve program design Facilitate enrollment in Hourly Flex Pricing Pilot to enable cost savings and operational load shifting Continue outreach and education to ag customers around benefits of electrification and emerging technologies

ENERGY OPTIMIZATION
Scale customer load shifting via Distributed Energy Resource Management System and Virtual Power Plant pilot Facilitate enrollment in Hourly Flex Pricing Pilot to enable cost savings and operational load shifting during peak times Enhance energy resiliency through microgrids with battery storage at critical public facilities In FY 2024-25, Central Coast Community’s Energy Programs invested $15 million to support customers in avoiding over 6,042 MT CO2e emissions through rebates, technical assistance, and electrification pilots. 3CE is scaling impact across the Central Coast with energy programs that reduce greenhouse gas emissions and support local economic development. 3CE will continue to enhance its Energy Programs portfolio to increase participation, maximize performance, and expand impact. The path below illustrates 3CE’s short term portfolio enhancement strategies to support the agency’s core mission of reducing reliance of fossil fuels on our energy grid. With input from customers, board members, and stakeholders, 3CE will develop a long-term programs strategic plan supporting the agency’s goal of 100% clean, renewable, and affordable energy.

The ongoing success of 3CE’s Energy Programs relies on community feedback from customers, community members, Member Agencies, and board and council members, to inform future program design, implementation, outreach, budgeting, and evaluation as part of 3CE’s commitment to continual improvement.

Please direct comments and feedback to: [email protected] CURRENT 3CE ENERGY PROGRAMS PORTFOLIO
Electrify Your Ride
Electric Bus
Plan, Charge, and Electrify
Your Fleet
Transportation Grants
EV Charger Asset Pilot

TRANSPORTATION

ELECTRIFICATION

BUILDING

ELECTRIFICATION

AGRICULTURAL

ELECTRIFICATION
ENERGY

OPTIMIZATION
Electrify Your Home
New Construction Elect.

Reach Codes
Ag. Electrification Program
Hourly Flex Pricing Pilot 1
Residential Battery Rebate
Hourly Flex Pricing Pilot 2

TRANSPORTATION

ELECTRIFICATION
RECOMMENDED 3CE ENERGY PROGRAMS PORTFOLIO

BUILDING

ELECTRIFICATION

AGRICULTURAL

ELECTRIFICATION
ENERGY

OPTIMIZATION
Electrify Your Ride
EV Charger Asset Program
Public Agency Fleet Elect.

Electrify Your Home V2.0
New Construction Elect.

Reach Codes
Ag. Electrification V2.0
Ag. Automation Pilot
Hourly Flex Pricing Pilot 1
Virtual Power Plant Pilot
Microgrid Pilot
Hourly Flex Pricing Pilot 2

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CALCULATION INPUT VALUE UNIT SOURCE
Gasoline 8.78 kgCO2e/gal 1
Diesel 10.21 kgCO2e/gal 1
Average Emissions Intensity 1 0.247 mtCO2e/MWH 2
Average Emissions Intensity 2 0.189 mtCO2e/MWH 3
E-Bus - Type A/B
Average Fuel Economy 6.2 miles per gallon 5(2), 7
Miles/year 14302 miles/year 5(1)
Gallons gasoline/year 2306.77 gasoline gallon equivalent 5(3), 5(4) EV efficiency 2.84 kWh/mile 8
E-Bus - Type C/D
Average Fuel Economy 6 miles per gallon 5(2), 7
Miles/year 6993 miles/year 5(1)
Gallons gasoline/year 1165 gasoline gallon equivalent 5(3), 5(4) EV efficiency 4.2 kWh/mile 8
E-Bus - Transit Bus
Average Fuel Economy 3.4 miles per gallon 5(2)
Miles/year 42940 miles/year 5(1)
Gallons gasoline/year 9605 gasoline gallon equivalent 5(3), 5(4) EV efficiency 3.6 kWh/mile 8
Passenger Vehicle
Average fuel economy 25 miles per gallon 4, 5(2)
Miles driven per year 10000 miles/year 5(1), 6
Metric tons CO2e/year 4.6 mtCO2e/year 6
Gallons gasoline/year 400 gallons/year 5(1), 6
EV kWh per year 3460 kWh/year conversion
Ag equipment (50 HP equipment)
Annual hours used 1000 hours/year 9
CO2e equivalent 1 32.9 lbs CO2e/hour 9
1 HP equivalency 0.736 kW conversion
Energy economy ratio 3.8 - 10
Diesel energy content 11.6 kWh/kg 11
Residential Heat Pump
Annual natural gas space heating 207 therms/home/year 12 Annual Natural gas water heating 259 therms/home/year 12 Natural Gas CO2 emissions 52.9 kgCO2/mmBTU 13
Coefficient of performance HP HVAC 3.5 COP 14
Efficiency of natural gas furnace 88% - 15
Coefficient of performance HPWH 2.8 COP 16
Efficiency of natural gas water heater 62% - 17
APPENDIX A1: GREENHOUSE GAS EMISSIONS

INPUTS & CONVERSION FACTORS
For transportation and agricultural electrification projects, the annual energy consumption was calculated for both conventional and electric systems in terms of kilowatt-hours (kWh). The emissions associated with gasoline (passenger vehicles) and diesel (all Type A, C buses, transit buses, and off-road mobile agricultural equipment) were then converted to their CO2 equivalencies based on emissions factors and the carbon intensity of the local grid. Greenhouse gas emission avoidances in the building sector were calculated for projects replacing natural gas furnaces and water heaters with electric alternatives. Average gas consumption for homes in PG&E territory was used to calculate the emissions attributed to retired natural gas appliances, compared to heating load produced from installed heat pumps. Staff used emissions factors specific to the 3CE service area and employed modified State protocols for emissions calculations to ensure conservative and transparent reporting.
2024-2025 ENERGY PROGRAMS PORTFOLIO EVALUATION 31

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APPENDIX A2: SOURCES
32 CENTRAL COAST COMMUNITY ENERGY
SOURCE # NAME LINK
1 EPA https://www.epa.gov/system/files/documents/2022-04/ghg_emission_factors_hub.pdf 2 3CE PCL (2021) https://www.energy.ca.gov/filebrowser/download/4606 3 3CE PCL (2024) https://3cenergy.org/wp-content/uploads/2025/01/3CE-2024-PCL-R7-FINAL.pdf 4 United States Department
of Transportation
https://www.bts.gov/content/average-fuel-efficiency-us-light-duty-vehicles 5 EVCAP GHG Emissions https://na.chargepoint.com/admin/dashboard 5(1) AFDC https://afdc.energy.gov/data/widgets/10309
5(2) Pfleet https://www.pfleet.com/
5(3) Fuel consumption https://www.sciencedirect.com/science/article/pii/S0016236125016631 5(4) Argonne National Lab https://afleet.esia.anl.gov/hdv-emissions-calculator/ 6 EPA https://www.epa.gov/greenvehicles/greenhouse-gas-emissions-typical-passenger-vehicle 7 CARB ZEB Pilot
Deployment Project
https://ww2.arb.ca.gov/sites/default/files/2021-
10/sac%20ze%20school%20bus%20deployment%20project%20final%20report.pdf 8 CARB SDMTS ZEB
Transition
https://ww2.arb.ca.gov/sites/default/files/2020-
12/SDMTS_ZEB_Fleet%20Transition%20StudyADA12072020.pdf
9 CARB Ag Equipment
Emissions Inventory
https://ww2.arb.ca.gov/sites/default/files/2021-
07/AG2021_Technical_Documentation_Final_DRAFT_ADA_PDFA.pdf 10 CARB GHG Quantification
Methodology – Off Road
https://ww2.arb.ca.gov/sites/default/files/auction-proceeds/carb_offatd_finalqm_16-17.pdf 11 US DOE Fuel Properties
comparison
https://afdc.energy.gov/fuels/properties
12 2019 RASS study https://www.energy.ca.gov/sites/default/files/2021-08/CEC-200-2021-005-PO.pdf 13 EIA https://www.eia.gov/environment/emissions/co2_vol_mass.php 14 Rocky Mountain Institute https://rmi.org/now-is-the-time-to-go-all-in-on-heat-pumps/ 15 2019 CA Building Efficiency
Standard
https://www.energy.ca.gov/sites/default/files/2021-
07/2019_Residential_Compliance_Manual-Complete_without_forms_ada.pdf 16 CPUC
https://sonomacleanpower.org/uploads/documents/Task-4.1-Efficiency-Optimizing-Control-Strategies-for-Grid-Integrated-Heat-Pump-Water-Heater-Report.pdf 17 Energy Star
https://www.energystar.gov/sites/default/files/specs//private/WaterHeaterDraftCriteriaAnal ysis.pdf

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CONTACT
1026 Palm Street
3CE NORTHERN OFFICE
70 Garden Court Suite 300
Monterey, CA 93940
For all PG&E customers
Email: [email protected]
3CESOUTHERN OFFICE
San Luis Obispo, CA 93401
For all SCE customers
Email: [email protected]

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Staff Report Item 11
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
SUBJECT: Receive presentation and direct staff to establish a Department of Energy Solutions as part of the FY 2026-27 Budget
DATE: June 17, 2026
RECOMMENDATION:

This memorandum recommends the Policy Board receive a presentation and direct staff to establish a Department of Energy Solutions as part of the FY 2026-27 Budget.

BACKGROUND:
3CE is successfully meeting its responsibilities as a community energy provider, including its effort to invest in clean and renewable resources. 3CE is reducing emissions, bringing new clean resources onto the grid, driving innovative programming, and investing in our local communities, while at the same time providing long-term rate stability. 3CE has a total of 25 contracted power purchase agreements (PPAs) and energy storage agreements (ESAs) that include solar, geothermal, wind, stand-alone storage, advanced compressed-air energy storage, and landfill gas. Thirteen of these projects are currently operational, and the remainder are expected to be online by 2030. 3CE has made substantial progress toward its mission through clean energy procurement, innovative programs, and community investment. Our local development efforts, however, have seen mixed results that illustrate a structural limitation in how we deliver projects. For example, the Front of the Meter Energy Storage (FoTM) effort, and the Uninterruptible Power Supply (UPS) Fund each identified real needs and opportunities but also called attention to the absence of a dedicated internal function to take projects from concept, through site control and procurement, into construction, operations, performance monitoring, and continuous improvement.

These same structural constraints have limited the development of local and strategic projects that create and deepen collaboration with member agencies and drive meaningful benefits for residents. Of 3CE’s 25 PPAs and ESAs, only two exist in our service area: the strategic partnership with an existing landfill gas operation at ReGen Monterey, and a pending stand-alone storage project. 3CE’s recent Local Only Request for Offers has also yielded mixed results with the local stand-alone storage projects that resulted from that effort, each facing uncertain development timelines tied to uncertain market conditions and complex financing for local projects.

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3CE has learned from these experiences that our ability to tackle local challenges and provide direct community benefit and economic development requires the organizational capacity and capability to take a concept to operation, as well as to support member agencies and customers as a business-to-business service provider. 3CE's experience has shown that local energy solutions are valuable. The DES recommendation asks the Board to consider whether 3CE should build the internal capacity to deliver such projects reliably, cost-effectively, and at a scale that advances the agency's mission and business interests.

DISCUSSION/ANALYSIS:

Direction that staff evaluate and propose a Department of Energy Solutions (DES) as part of the FY 2026- 27 budget adds functional capability to deliver and operate innovative local generation projects in alignment with 3CE’s core mission to serve our communities through clean, affordable, reliable electricity, and innovative programs that reduce greenhouse gas emissions while stimulating the local economies in our service area.
3CE’s competitive differentiation depends on our ability to deliver cost-effective local projects, owning and executing every stage of the project lifecycle, and maintaining the asset value of local projects, rather than foregoing those investment and value benefits through an offtake contract structure. Other entities have also been working toward project ownership as a next phase of CCA development.

California Community Power, a joint power authority comprised of 9 CCAs (including 3CE) has evaluated the cost effectiveness of project ownership and pursued several Build-Transfer Agreement (BTA) structures that would have a project privately financed and constructed prior to transfer to CCPower for commercial operation. Under the BTA, CCPower and its members would retain the long-term asset value. 3CE’s proposed DES adapts the CCPower model to focus on local projects that help deliver value to our community.

The proposed DES would be built incrementally starting with the highest-leverage early-stage functions and expanding toward operational capability over several years. This proposed approach will enable 3CE to phase its departmental buildout to meet current capital project delivery obligations; overcome the asset development limitations that forestalled the FoTM effort, and; maximize 3CE’s energy expertise through business-to-business service offerings.

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Capital Project Delivery Energy Asset Development &
Operations
Enterprise Services
(B2B)
Scope: Manage end-to-end
delivery of capital projects and
serve as owner representative for
3CE when third parties deliver
projects.

Scope: Identify, site, finance,
construct, own, and manage
selected generation, storage, and
resilience assets on behalf of 3CE
and its member agencies when
3CE ownership or participation
creates value.

Scope: Package 3CE's energy
expertise as contracted services
for member agencies, public
power partners, developers, and
eligible commercial or industrial
customers.

Early focus: EV charging assets,
office projects, local infrastructure
obligations already moving toward
delivery.

Early focus: grid-scale storage,
microgrids, front-of-meter
resources, and member agency
host-site opportunities.

Early focus: load forecasting, rate
design support, data
management, portfolio analysis,
market asset management, and
capital delivery support.

Value: improved cost control,
schedule discipline, procurement
consistency, owner oversight, and
lessons learned across the capital
project portfolio.

Value: local jobs, local reliability
benefits, retained asset value,
potential long-term revenue
streams, and stronger strategic
control over projects.

Value: cost recovery, new
business-line revenue, deeper
member agency service, and a
platform to turn internal capability
into customer value.

The phased approach will be scaled over several years, allowing time to build internal expertise, test business models, and reduce risk.

Capital Project Delivery
The Department of Energy Solutions will serve as 3CE's internal center of excellence for capital project management, providing the structures, processes, and technical expertise necessary to deliver complex capital projects and energy infrastructure on time and within budget.

The first and highest-leverage DES function would establish 3CE's internal center of excellence for capital project management. This function is needed now because 3CE already has capital and local infrastructure work underway, including capital improvements at its Soquel office, development of a Monterey area headquarters, EV charger asset efforts, and microgrid opportunities. As these efforts move from pilots to durable lines of work, 3CE needs dedicated project delivery capacity rather than an ad hoc staffing model.

To date, these functions have been treated as special initiatives assigned to capable leaders within the agency and through cross-departmental efforts. As 3CE scales pilot projects to operational lines of business, this ad hoc and informal staffing arrangement is insufficient to ensure a robust operation that meets 3CE’s standards and customer needs. Building a capital project delivery capability directly

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addresses the gap that limited the FoTM efforts and UPS Fund — the absence of a dedicated owner's representative capability within 3CE.

With respect to local energy infrastructure project delivery, the anticipated projects are significant capital investments – in the tens of millions of dollars. Under today’s model, the projects would be managed primarily through the Energy Programs Project Manager’s oversight of an engineering, procurement, construction (EPC) contractor/installer. This model relies heavily on vendors, developers, and staff capacity borrowed from other departments. That leaves 3CE exposed to vendor performance risk, limits project cost-control leverage, and makes it difficult to retain institutional knowledge after a project is commissioned.

A DES would create a clear internal home for project standards, procurement strategy, owner oversight, asset performance, and customer-facing energy services.

The Capital Project Delivery function would provide:
 A maintained capital project pipeline across the five-county service area, including project identification, scoping, prioritization, and readiness screening;  Project management standards, templates, dashboards, and reporting frameworks consistent with public-sector infrastructure delivery best practices;  Procurement support for design-build, engineering-procurement-construction, and operations and maintenance contracts;
 Owner-representative services for projects delivered by third-party vendors or developers on behalf of 3CE or its member agencies; and
 Post-construction performance monitoring and lessons-learned documentation to improve each successive project.

For anticipated local energy infrastructure projects that may involve multimillion-dollar capital commitments, this capability would protect 3CE's business interests by improving cost control, schedule discipline, vendor accountability, and project-to-project learning.

Energy Asset Development and Operations
A second phase of the Department of Energy Solutions is the essential cornerstone of developing the in-house capability to advance energy generation and storage projects from pre-development through long-term operations. This phase would build the capability to advance selected energy generation and storage projects from pre-development through long-term operations. This does not mean 3CE should own every local project. It means 3CE should have the ability to evaluate ownership, partnership, lease, public-private partnership, or offtake structures and choose the approach that best advances mission value, rate stability, and risk management.

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This function would add disciplined capability across the project lifecycle, including:
 Origination and pipeline development with member agencies, local parcels, host sites, grant opportunities, and financing opportunities;
 Site control and host-site coordination with member agencies, landowners, and facility operators;
 Interconnection management with PG&E, SCE, and CAISO processes, as applicable;  Environmental review, permitting, CEQA compliance, agency coordination, and public engagement;
 Project development management across land, environmental, interconnection, engineering, legal, regulatory, and finance workstreams;
 Asset ownership and financing analysis, including direct ownership, joint venture, lease, public-private partnership, debt, offtake, and tax credit considerations; and  Asset operations and management, including operations and maintenance vendor oversight and performance reporting for owned or managed assets.

Priority project types would include grid-scale battery storage, microgrids, and front-of-meter generation resources. When structured appropriately, these projects can produce local construction jobs, long-term operational work, community resilience benefits, retained asset value, and revenue streams that support 3CE's long-term financial position.

Energy Services Enterprise (Business-to-Business)
The third DES function would turn selected internal 3CE capabilities into a structured energy services enterprise. Many member agencies and customers face increasingly complex energy decisions but do not have specialized energy market, data, asset management, or project delivery staff. 3CE already has expertise in these areas because it must use them to serve its own load and manage its own portfolio.

A business-to-business function would structure those capabilities through a formal service catalog, client management, negotiated service agreements, and a cost-recovery model. Potential services include load forecasting, rate design support, regulatory support, capital project delivery, market asset management, data management, portfolio analysis, and operational technology support.

This business line would advance the mission by helping customers and member agencies implement energy solutions, while advancing the business by creating a pathway for cost recovery and future income for local reinvestment. Once mature, the service enterprise could help support innovation and rate stability for 3CE customers.

The Energy Services Enterprise model has been deployed throughout the public energy sector. Agencies that develop operational expertise to serve their own needs frequently find that this expertise has market value beyond their own boundaries. The Sacramento Municipal Utility District (SMUD) provides scheduling and energy management services to smaller public agencies throughout Northern California.

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The Los Angeles Department of Water and Power (LADWP) provides wholesale power and technical services to neighboring utilities. Importantly, these additional “income statement” business lines (once matured) would directly contribute to 3CE’s ability to stabilize rates and drive innovation in our local service areas.

FISCAL IMPACT:

There is no fiscal impact related to the staff report. Here, the Board’s direction would require that staff develop an organizational structure, staffing plan, and budget framework for the Department of Energy Solutions for subsequent Board review and approval as part of the FY 2026-27 Budget.

Future fiscal impacts would depend on the pace and scale of implementation. The phased approach is intended to align staffing and operating costs with capital project needs, asset development opportunities, and fee-for-service revenue potential.

CONCLUSION:

Establishing a Department of Energy Solutions is a mission-driven business recommendation. It would give 3CE the capacity to convert clean energy procurement success into local energy infrastructure, member agency support, customer value, and long-term business resilience.

Without this capability, 3CE will continue to depend primarily on third-party vendors and ad hoc internal capacity for complex local projects, limiting cost control, institutional learning, asset value retention, and the ability to scale local benefits. With this capability, 3CE can build a disciplined platform for local project delivery, strategic asset participation, and energy services that strengthen both the mission and the financial foundation of the agency.

Staff therefore recommends that the Board receive the presentation and provide direction to staff to establish the Department of Energy Solutions for consideration as part of the FY 2026-27 Budget process.

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Staff Report 12
TO: 3CE Policy Board of Directors
FROM: Robert M. Shaw, Chief Executive Officer
PREPARED BY: Juan Lopez, Director of Finance
SUBJECT: Presentation on the FY 2025-26 Mid-Year Budget Forecast DATE: June 17, 2026
RECOMMENDATION:

Receive a presentation on the FY 2025-26 Mid-Year Budget Forecast.

BACKGROUND:

The Mid-Year Budget Forecast (Forecast) provides an updated assessment of 3CE’s financial position by comparing adopted budget assumptions with year-to-date performance, current market conditions, and projected operating needs. The Forecast supports informed decision-making by identifying revenue and expenditure trends that may affect 3CE’s financial health, rate stability, procurement planning, and strategic priorities. It also serves as a planning tool for the upcoming fiscal year’s budget and extends the analysis over multiple years to evaluate long-term risks, reserve needs, future funding requirements, and opportunities to strengthen organizational resilience.

On September 18, 2025, the Policy Board adopted Resolution No. PB-2025-06 approving the FY 2025-26 Recommended Budget. The adopted budget totaled $588.4 million in expenditures, financed by $587.2 million in estimated revenues and $1.2 million from the Capital Infrastructure Reserve (CIR), supporting continued operations, capital investments, and 59 full-time equivalent positions. The budget reflected a significant decrease from the prior year's adopted budget due to the cost of energy, primarily energy attributes; however, the cost of energy remained 3CE’s largest and most volatile expenditure at $534.8 million, or approximately 91% of total expenditures.

The adopted budget was developed within a conservative financial framework in response to ongoing regulatory and energy market uncertainty, particularly changes related to the Power Charge Indifference Adjustment (PCIA), IOU generation rates, and market price benchmarks. To preserve flexibility, the

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budget did not include a planned contribution to reserves. Overall, the Board’s action adopted a balanced budget intended to sustain core operations, maintain rate stability, support clean and renewable energy, and position 3CE to respond to evolving market and regulatory conditions.

DISCUSSION/ANALYSIS:

When adopting the FY 2025-26 budget, the Policy Board extended the CY 2025 electric generation rates into CY 2026, pending additional clarity on regulatory and IOU rate impacts, and directed staff to return in early 2026 with updated rates that align revenues with the adopted budget and remain consistent with 3CE’s financial policies. In response, on January 28, 2026, the Policy Board adopted Resolution No.

PB-2026-01 approving generation rates through April 2027. The action reduced 3CE’s systemwide average generation rate by approximately 25%, reflecting the lower cost structure included in the FY 2025-26 budget and year-to-date favorable actuals.

The rate adjustment shaped the FY 2025-26 financial outlook by reducing projected net electricity sales revenue for the remainder of the fiscal year and in future years. While this reduced expected revenues, revenues remain sufficient to fund anticipated operating expenditures, support continued balance-sheet strength, and preserve flexibility to respond to market and regulatory volatility. Based on current forecasts and approved rates, 3CE estimates a favorable financial outcome relative to the adopted budget, primarily due to lower projected expenditures, particularly the cost of energy.

The Forecast estimates FY 2025-26 total expenditures of $507.6 million, a favorable variance of 14%, compared to the adopted budget. Operating expenditures are classified into two categories: energy and non-energy costs. Non-energy operating expenditures, consisting of personnel and operating costs, are projected at $48.8 million compared to a budget of $52.4 million, a favorable variance of $3.6 million, or 7%. The lower non-energy operating costs are primarily attributable to lower-than-anticipated Mid-Year Forecast FY 2024-25
Actual
FY 2025-26
Adopted Budget
FY 2025-26
Mid-Year
Forecast
FY 2026-27
Forecast
FY 2027-28
Forecast
FY 2028-29
Forecast
Net Electricity Sales 658,974,802 578,022,716 549,527,132 481,980,634 481,931,177 517,509,875 Deferred Revenue - - (39,527,962) - - -
Liquidated Damages 8,101,745 - - - - -
Other Income 159,518 75,000 136,849 50,500 50,000 50,000 Interest and Investment Returns 11,037,533 9,100,000 9,942,617 9,500,000 9,850,000 10,300,000 Sub-Total Revenues 678,273,598 587,197,716 520,078,636 491,531,134 491,831,177 527,859,875 Capital Infrastructure Reserve - 1,200,000 6,741,324 - - - Total Financing Sources $ 678,273,598 $588,397,716 $ 526,819,960 $491,531,134 $491,831,177 $ 527,859,875 Cost of Energy 591,911,994 534,776,256 452,043,477 428,189,003 425,815,688 463,720,606 Salaries and Benefits 10,765,707 14,260,774 12,601,420 17,824,929 19,894,394 22,141,915 Services and Supplies 31,067,935 38,160,686 36,220,044 35,917,201 36,521,095 37,197,354 Capital Assets - 1,200,000 6,741,324 9,600,000 9,600,000 4,800,000 Total Financing Uses $ 633,745,636 $588,397,716 $ 507,606,265 $491,531,134 $491,831,177 $ 527,859,875 Total Change to Net Position $ 44,527,962 $ 0 $ 19,213,695 $ 0 $ 0 $ 0

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professional services that are moderately offset by higher-than-anticipated participation in energy programs and staffing vacancies, partially offset by higher healthcare premium costs. Forecasted years assume increased personnel costs based on full funding for all positions, higher salary and benefit costs reflecting competitive market trends, and growth trajectory across business units. Services and supplies assume sustained customer participation in energy programs and use of professional services.

The Forecast estimates the cost of energy for FY 2025-26 at $452.0 million, a favorable variance of or 16%, compared to the adopted budget. This favorable variance reflects a combination of lower-than-anticipated energy costs and improved internal forecasting. Staff refined current-year projections by incorporating year-to-date actuals, updated contract and market assumptions, and additional validation of energy attribute costs. These improvements provide a more accurate view of expected costs for the remainder of the fiscal year and better align the Forecast with 3CE’s portfolio obligations and market exposure.

Broader energy market conditions and ongoing strong portfolio management contributed to the lower projected cost of energy. Energy prices have softened relative to prior expectations, supported by lower market prices, stronger output from renewables and storage, and reduced reliance on higher-cost market purchases as projects come online. In addition, 3CE’s portfolio hedging and long-term procurement strategy have helped limit exposure to market volatility while allowing the agency to benefit from more favorable cost conditions.

While the Forecast reflects a strong improvement over the estimate used to develop the recommended budget, the cost of energy remains subject to uncertainty stemming from summer market conditions, Resource Adequacy (RA) costs under the Slice-of-Day framework, PPA timing and risks of delays, and retail load performance. In the forecasted years, the cost of energy is projected at $428.2 million in FY 2026-27, $425.8 million in FY 2027-28, and $463.7 million in FY 2028-29, reflecting lower near-term energy attribute costs and the expected benefits of new projects coming online, partially offset by market price exposure, the roll-off of existing hedges in the outer years, and future resource needs. 3CE is continually refining its modeling to capture the significant uncertainty of market and regulatory developments in financial forecasts. At this time, the forecasted financial performance remains highly volatile.

Capital asset expenditures are projected at $6.7 million, funded through the Capital Infrastructure Reserve, compared to the adopted budget of $1.2 million, primarily for office improvements, the EV Charger Asset Pilot, and planned land acquisition for 3CE’s future headquarters.

The Forecast estimates total revenues of $520.1 million, reflecting an unfavorable budget-to-forecast variance of 11%. Due to a favorable operating result in FY 2024-25 and the timing of the rate adjustment

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in 2026, staff estimates a $39.5 million deferral of electric revenue at year-end, to be applied to offset operating costs in future periods which will result in lower rates. Combined, net electricity sales and deferred revenue are projected at $510.0 million, approximately 12% below budget. Because forecasted out-year expenditures are lower than the currently adopted budget, the Forecast projects sufficient operating revenues to cover costs.

Interest and investment returns are projected at $9.9 million, approximately $842,600 above budget, supported by active treasury management and higher-than-budgeted investment earnings. Other income is projected at $136,849, approximately $61,800 above budget, due to external program funding and rental income. Forecasted years assume continued interest and investment earnings from the agency’s active treasury management and no adjustments to the current generation rate.

Reserve Targets
3CE is projected to improve its reserve position at year-end and move closer to meeting the reserve targets established in the Financial Policies. The forecast estimates reserves at year-end of $239.2 million, or 85% of the reserve target, compared to $219.9 million, or 78% of the adopted budget target.

While the current forecast reflects a stronger-than-expected financial position, reserve planning remains essential for managing future rate, regulatory, and market risks. As out-year expenditures are projected below the adopted budget, the Forecast anticipates the organization reaching its reserve targets within the forecast horizon.

FISCAL IMPACT:

The Forecast estimates total revenue of $520.1 million, a 11% lower revenue variance from the budget, and $507.6 million in total expenditures, equating to a 14% lower-than-budget variance, while maintaining growth in the estimated net position of $19.2 million, and using $6.7 million from the Capital Infrastructure Reserve for capital expenditures related to capital acquisition, asset development, and improvements. Because the Forecast is a mid-year estimate, unforeseen variables could increase or decrease net operating results in the coming months. These variables could include energy market volatility, especially in the summer months, higher-than-estimated energy attribute expenditures such as RA, retail load, and unforeseen regulatory impacts.

CONCLUSION:

The Forecast reflects 3CE's continued focus on prudent financial stewardship and long-term planning.

The Audit and Finance Committee and Operations Board received presentations on the Forecast on May 27, 2026. Both bodies provided feedback and affirmed 3CE's commitment to building reserves, recognizing that a strong reserve position supports stability over time and helps buffer against future market and regulatory uncertainty.

ATTACHMENT(S):

None.

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Central Coast Community Energy (3CE) Policy BoardJune 17, 2026

Central Coast Community Energy (3CE) Policy Board
June 17, 2026